GE HealthCare Q4 2025 GE HealthCare Technologies Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 GE HealthCare Technologies Inc Earnings Call
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Thanks operator. Good morning, and welcome to GE healthcare's, fourth quarter, and full year 2025 earnings call. I'm joined by our president and CEO Peter, arduini and vice president, and CFO J. Sakara 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.
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 with that, I'll hand the call over to Peter.
Thanks Caroline. Good morning, and thank you for joining us.
As I look back on our performance in 2025, our third year, as a public company, I'm incredibly proud of the meaningful progress that we're making on our Innovation, Renaissance to deliver for our customers and improve patient lives.
In the fourth quarter, we delivered strong financial performance above our expectations, this included double-digit, organic Revenue, growth, and pharmaceutical, Diagnostics and mid single digit growth in imaging and advanced digitalization Solutions.
we delivered strong, bottom line and cache performance in the fourth quarter, excluding tariffs,
The overall Capital Equipment environment, remained healthy demand in the US and emea remained strong.
In our recent Us customer survey, we saw an increase in the number of large customers. That plan to invest in Capital Equipment in 2026,
We secured multiple large agreements in the quarter and extended several others. A great example is our 7-year agreement with the University of Rochester Medical Center, to advance their inostics and precision medicine.
This collaboration crosses every aspect of our Enterprise from AI enabled Imaging equipment and radio pharmaceutical production to systemwide Patient Monitoring Solutions and services.
in November, we announced the planned acquisition of intelliride
We expect this will accelerate our fully connected Cloud first Imaging ecosystem by adding digital tools and SAS offerings that enhance, clinical operations, Drive, recurring, revenue and enable more personalized patient care.
Q4 2025 GE HealthCare Technologies Inc Earnings Call
as a reminder, in the First full year of ownership, we expect intelerad revenues to be approximately 270 million, which is grown in the low, double digits with an adjusted ibaa in excess of 30%,
Finally we Advanced heartbeat our proprietary business system, which we implemented mid year as the next step in our lean Journey. We started a few years back and I'll talk more about this shortly.
Moving to 2025 highlights on slide 4. We made meaningful progress across the 3 pillars of our strategic framework. Let's start with Precision Care with diseases becoming more prevalent complexed. And chronic the need for Integrated Solutions. Has never been greater as the only Diagnostic Imaging company with a full portfolio of contrast media and radio Pharmaceuticals. We differentiate ourselves with our D3 strategy.
We bring together smart devices and drugs across disease States enabled by digital Ai and Cloud to help support earlier more accurate diagnosis and ultimately therapy delivery.
Our 3year Vitality rate for new products is strong at 55% up approximately 5% from our prior year recall. This means 55% of our revenue is coming from new products.
This reinforces that we're delivering the right offerings for our customers. We're making solid progress on our launches. For example, our Omni total body pet and next-gen spec our available in Europe, strengthening our position in theonics, our regulatory timelines for products. We announced that rsna are all on track, including photo, Nova Spectra, Photon counting, CT, and sigma, Mr. With freelance.
To strong growth in, as, and forcado for myocardial profusion both, which are currently in the market.
Peter Arduini: Total body PET and next-gen SPECT are commercially available in Europe, strengthening our position in theranostics. Our regulatory timelines for products we announced at RSNA are all on track, including Photonova Spectra Photon Counting CT, and SIGNA MR with Freelium. Additionally, customers have great things to say about Vivid Pioneer, our most advanced cardiovascular ultrasound system, which has been contributing to strong growth in AVS, and Flyrcado for myocardial perfusion, both which are currently in the market. We're pleased to report that our Flyrcado ramp has been progressing well. You may recall at our last earnings call that we said we're going slow to go fast, to help ensure customers have a high-quality experience, and that starts with being able to deliver doses consistently.
Peter Arduini: Total body PET and next-gen SPECT are commercially available in Europe, strengthening our position in theranostics. Our regulatory timelines for products we announced at RSNA are all on track, including Photonova Spectra Photon Counting CT, and SIGNA MR with Freelium. Additionally, customers have great things to say about Vivid Pioneer, our most advanced cardiovascular ultrasound system, which has been contributing to strong growth in AVS, and Flyrcado for myocardial perfusion, both which are currently in the market. We're pleased to report that our Flyrcado ramp has been progressing well. You may recall at our last earnings call that we said we're going slow to go fast, to help ensure customers have a high-quality experience, and that starts with being able to deliver doses consistently.
Speaker #1: Any total body PET, and next-gen SPEC are commercially available in Europe. Strengthening our position in theranostics. Our regulatory timelines for products we announced at RSNA are all on track, including Photonova spectrophoton counting CT, and Cigna MR with freelance.
We're pleased to report that our focado ramp has been progressing. Well, you may recall at our last earnings call that we said we're going slow to go fast to help ensure customers have a high quality experience and that starts with being able to deliver doses. Consistently
Speaker #1: Additionally, customers have great things to say about Vivid Pioneer, our most advanced cardiovascular ultrasound system, which has been contributing to strong growth in AVS.
In the week, ended January 23rd, we delivered 220 doses of focado, and we expect the weekly dose rate to continue to increase throughout the year.
Speaker #1: And for CADO, for myocardial perfusion, both of which are currently in the market. We're pleased to report that our for CADO ramp has been progressing well, you may recall at our last earnings call that we said we're going slow to go fast to help ensure customers have a high-quality experience.
These improvements allow us to onboard more customers and we've been making solid progress and reducing the cycle time to activate a new customer.
Speaker #1: And that starts with being able to deliver doses consistently. I'm happy to say we're starting the year with our CMO partners more consistently operating at approximately 95% on-time to delivery to meet customer demand which patients.
Speaker #1: And that starts with being able to deliver doses consistently. I'm happy to say we're starting the year with our CMO partners more consistently operating at approximately 95% on-time to delivery to meet customer demand which allows us to begin bringing on more In the week ended January 23rd, we delivered 220 doses of for CADO, and we expect the weekly dose rate to continue to increase throughout the year.
Peter Arduini: I'm happy to say we're starting the year with our CMO partners more consistently operating at approximately 95% on time to delivery to meet customer demand, which allows us to begin bringing on more patients. In the week ended 23 January, we delivered 220 doses of Flyrcado, and we expect the weekly dose rate to continue to increase throughout the year. These improvements allow us to onboard more customers, and we've been making solid progress in reducing the cycle time to activate a new customer. Overall, the customer experience with Flyrcado has been quite positive based on its many advantages. Also, recently, the American Society of Nuclear Cardiology recommended PET as the preferred imaging modality over SPECT, the current standard of care, reinforcing a meaningful shift towards PET and nuclear cardiology.
Peter Arduini: I'm happy to say we're starting the year with our CMO partners more consistently operating at approximately 95% on time to delivery to meet customer demand, which allows us to begin bringing on more patients. In the week ended 23 January, we delivered 220 doses of Flyrcado, and we expect the weekly dose rate to continue to increase throughout the year. These improvements allow us to onboard more customers, and we've been making solid progress in reducing the cycle time to activate a new customer. Overall, the customer experience with Flyrcado has been quite positive based on its many advantages. Also, recently, the American Society of Nuclear Cardiology recommended PET as the preferred imaging modality over SPECT, the current standard of care, reinforcing a meaningful shift towards PET and nuclear cardiology.
Overall, the customer experience with focado has been quite positive based on its many advantages. Also recently, the American Society of nuclear Cardiology recommended pet as the preferred Imaging, modality over spec, the current standard of care reinforcing a meaningful shift towards pet and nuclear Cardiology
As I stated before our confidence in our ability to deliver 500 million or more in forcado Revenue.
By year end 2028 remains intact. And in the long run, we see a billion-dollar opportunity for this novel molecule.
Speaker #1: These improvements allow us to onboard more customers and we've been making solid progress in reducing the cycle time to activate a new positive based on its many advantages.
Turning to our second pillar, we accelerated growth with more than 7 billion dollars in Enterprise deals globally since our spin.
Speaker #1: Also, recently the customer. American Society of Nuclear Overall, the customer experience with for CADO has been quite Cardiology recommended PET as the preferred imaging modality over SPEC, the current standard of care.
For example, we entered 2025 with 1 of the largest collaboration Sutter Health. In addition, we signed a multi-year agreement with the Ministry of Health in Indonesia, where we installed more than 300. Advanced, CT scanners in urban and remote hospitals.
Speaker #1: Reinforcing a meaningful shift towards PET and nuclear cardiology. As I stated before, our confidence in our ability to deliver 500 million or more in for CADO revenue by year-end 2028 remains intact, and opportunity for this novel in the long run, we see a billion-dollar pillar, we accelerated growth with more molecule.
Peter Arduini: As I stated before, our confidence in our ability to deliver $500 million or more in Flyrcado revenue by year-end in 2028 remains intact, and in the long run, we see a billion-dollar opportunity for this novel molecule. Turning to our second pillar, we accelerated growth with more than $7 billion in enterprise deals globally since our spin. For example, we entered 2025 with one of the largest collaborations, Sutter Health. In addition, we signed a multi-year agreement with the Ministry of Health in Indonesia, where we installed more than 300 advanced CT scanners in urban and remote hospitals. Many of these deals have a service component that delivers strong recurring revenue with attractive margins. In 2025, our service business grew mid-single digits.
Peter Arduini: As I stated before, our confidence in our ability to deliver $500 million or more in Flyrcado revenue by year-end in 2028 remains intact, and in the long run, we see a billion-dollar opportunity for this novel molecule. Turning to our second pillar, we accelerated growth with more than $7 billion in enterprise deals globally since our spin. For example, we entered 2025 with one of the largest collaborations, Sutter Health. In addition, we signed a multi-year agreement with the Ministry of Health in Indonesia, where we installed more than 300 advanced CT scanners in urban and remote hospitals. Many of these deals have a service component that delivers strong recurring revenue with attractive margins. In 2025, our service business grew mid-single digits.
Many of these deals have a service component that delivers strong recurring Revenue with attractive margins in 2025 our service business grew mid single digits. And with the launch of many new Advanced products, we would expect our capture rate of service agreements to increase in the future with all the new wave of innovation entering the marketplace.
Speaker #1: than 7 billion dollars in spin. For example, we entered enterprise deals globally since our 2025 with one of the largest Turning to our second collaborations Sutter Health, in addition we signed a multi-year agreement with the Ministry of Health in Indonesia where we installed more than 300 advanced CT scanners in urban and remote hospitals.
We're also executing on our disciplined Capital allocation strategy with tuck in Acquisitions, like Nihon metaphysics and eic's and our planned acquisition of intellect.
These transactions Elevate, our portfolio and our expected to drive recurring revenue, and supplement Topline growth and profitability.
Speaker #1: Many of these deals have a service component that delivers strong recurring revenue with attractive margins. In 2025, our service business grew mid-single digits, and with the launch of many new advanced products, we would expect our capture rate of service agreements to increase in the future with all the new wave of innovation entering the marketplace.
Turning to business optimization, our third strategic pillar, we continue to advance our business system heartbeat to improve the customer experience and drive productivity to deliver margin expansion.
Peter Arduini: With the launch of many new advanced products, we would expect our capture rate of service agreements to increase in the future with all the new wave of innovation entering the market. We're also executing on our disciplined capital allocation strategy with tuck-in acquisitions like Nihon Medi-Physics and icometrix, and our planned acquisition of Intelerad. These transactions elevate our portfolio and are expected to drive recurring revenue and supplement top-line growth, and profitability. Turning to business optimization, our third strategic pillar. We continue to advance our business system, Heartbeat, to improve the customer experience and drive productivity to deliver margin expansion. Our teams accomplished this by remaining focused on helping clinicians provide care for patients, and delivering greater value for customers and shareholders.
Peter Arduini: With the launch of many new advanced products, we would expect our capture rate of service agreements to increase in the future with all the new wave of innovation entering the market. We're also executing on our disciplined capital allocation strategy with tuck-in acquisitions like Nihon Medi-Physics and icometrix, and our planned acquisition of Intelerad. These transactions elevate our portfolio and are expected to drive recurring revenue and supplement top-line growth, and profitability. Turning to business optimization, our third strategic pillar. We continue to advance our business system, Heartbeat, to improve the customer experience and drive productivity to deliver margin expansion. Our teams accomplished this by remaining focused on helping clinicians provide care for patients, and delivering greater value for customers and shareholders.
Our team's accomplished this by remaining focused on helping clinicians, provide care for patients and delivering greater value for customers and shareholders.
Speaker #1: We're also executing on our disciplined capital allocation strategy with tuck-in acquisitions, Echo Metrics, and our planned acquisition of Intelliret, like Nihon Metaphysics and portfolio, and are expected to drive. These transactions elevate our recurring revenue and supplement top-line growth and profitability.
regaining momentum, with our clinical and solutions selling strategy and EMA with several multimodality deals, including a 20-year collaboration with nutfield health, the UK's largest Healthcare charity,
The combination of our differentiated portfolio, our teams deep expertise across disease, States and best-in-class services such as support with our customers globally.
Speaker #1: Turning to business strategic pillar. We continue to advance optimization, our third our business system heartbeat to improve the customer experience and drive productivity to deliver margin expansion.
Turning to slide 5.
Speaker #1: Our team's accomplished this by remaining focused on helping clinicians provide care for patients and delivering greater value for customers and shareholders. We're gaining momentum with our clinical and solution selling strategy and EMEA with several multimodality deals including a 20-year collaboration with Nuffield Health.
Underpinning. Our execution is a step change in how we run a company anchored and key metrics around safety, quality delivery cost and Innovation or sqdc.
Peter Arduini: We're gaining momentum with our clinical and solution selling strategy in EMEA, with several multimodality deals, including a 20-year collaboration with Nuffield Health, the UK's largest healthcare charity. The combination of our differentiated portfolio, our team's deep expertise across disease states, and best-in-class services set us apart with our customers globally. Turning to slide 5. Underpinning our execution is a step change in how we run the company, anchored in key metrics around safety, quality, delivery, cost, and innovation, or SQDCI. Heartbeat is about driving the right leadership behaviors, culture, and KPIs, supported by disciplined processes and tools for problem-solving and continuous improvement. Think of Heartbeat as the steady pulse that ultimately runs through our organization to deliver results.
Peter Arduini: We're gaining momentum with our clinical and solution selling strategy in EMEA, with several multimodality deals, including a 20-year collaboration with Nuffield Health, the UK's largest healthcare charity. The combination of our differentiated portfolio, our team's deep expertise across disease states, and best-in-class services set us apart with our customers globally. Turning to slide 5. Underpinning our execution is a step change in how we run the company, anchored in key metrics around safety, quality, delivery, cost, and innovation, or SQDCI. Heartbeat is about driving the right leadership behaviors, culture, and KPIs, supported by disciplined processes and tools for problem-solving and continuous improvement. Think of Heartbeat as the steady pulse that ultimately runs through our organization to deliver results.
Heartbeat is about driving the right leadership, behaviors culture and kpis supported by discipline processes and tools for problem solving and continuous Improvement. Think of heartbeat as the steady pulse that ultimately runs through our organization to deliver results.
Speaker #1: The UK's largest healthcare charity. The combination of our differentiated portfolio, our team's deep expertise across disease states, and best-in-class services such as support with our customers globally.
Speaker #1: Turning to slide execution is a step change in how five, underpinning how we run the company anchored in key metrics around safety, quality, delivery, cost, and innovation, or SQDCI.
Example of where we've deployed heartbeat in the back, half of 2025, was related to a key priority to improve past due backlog, which relates to site Readiness or our ability to deliver products. Heartbeat provides a structured approach to problem solving by eliminating steps, improving information flow across the value stream from our plants, all the way to the customer.
Speaker #1: Heartbeat is about driving the right leadership behaviors, culture, and KPIs, supported by disciplined processes and tools for problem-solving and continuous improvement. Think of Heartbeat as the steady pulse that ultimately runs through our organization to deliver results.
We increase visibility to orders to help ensure timely delivery strength and alignment with our factories and improve how we manage customer site readiness.
Because of this, we are able to drive an average monthly Improvement of 25% and pass. You backlog versus the prior year ultimately translating into improved sales and cash conversion in 2025.
Speaker #1: An example of where we've deployed Heartbeat in the back half of 2025 was related to a key priority to improve past-due backlog. Which relates to site readiness or our ability to deliver product.
Peter Arduini: An example of where we've deployed Heartbeat in the back half of 2025 was related to a key priority to improve past due backlog, which relates to site readiness or our ability to deliver product. Heartbeat provides a structured approach to problem-solving by eliminating steps, improving information flow across the value stream from our plants all the way to the customer. We increase visibility to orders to help ensure timely delivery, strengthen alignment with our factories, and improve how we manage customer site readiness. Because of this, we were able to drive an average monthly improvement of 25% in past due backlog versus the prior year, ultimately translating into improved sales and cash conversion in 2025. It's early days, but we're building our Heartbeat muscle and already seeing the impact. I'm excited about the progress our teams have made to date.
Peter Arduini: An example of where we've deployed Heartbeat in the back half of 2025 was related to a key priority to improve past due backlog, which relates to site readiness or our ability to deliver product. Heartbeat provides a structured approach to problem-solving by eliminating steps, improving information flow across the value stream from our plants all the way to the customer. We increase visibility to orders to help ensure timely delivery, strengthen alignment with our factories, and improve how we manage customer site readiness. Because of this, we were able to drive an average monthly improvement of 25% in past due backlog versus the prior year, ultimately translating into improved sales and cash conversion in 2025. It's early days, but we're building our Heartbeat muscle and already seeing the impact. I'm excited about the progress our teams have made to date.
Today with that, I'll turn it over to Jay to discuss our financial results. J.
Speaker #1: Heartbeat provides a structured approach to problem-solving by eliminating steps and improving information flow across the plants all the way to the customer. We increase visibility to orders to help value stream from our strengthen alignment with our factories, and improve ensure timely delivery, how we manage customer site readiness.
Thanks Pete. Let's start with our financial performance for the fourth quarter on slide 6.
Speaker #1: Because of this, we were able to drive an average monthly improvement of 25% in past-due backlog versus the prior year, ultimately translating into improved sales and cash conversion in 2025.
We delivered revenue of 5.7 billion dollars, which grew 4.8% organically year-over-year. Exceeding, our expectations on a reported basis, product Revenue, grew, 7.9% and service Revenue grew 5.5%
Speaker #1: It's early days, but we're building our Heartbeat muscle and already seeing the impact. I'm excited about the progress our teams have made to date with that.
Peter Arduini: With that, I'll turn it over to Jay to discuss our financial results. Jay?
Peter Arduini: With that, I'll turn it over to Jay to discuss our financial results. Jay?
Speaker #1: I'll turn it over to Jay to discuss our financial results.
In the quarter orders growth was 2%, following 5.6% growth in the year ago period we exited the quarter with a record backlog of 21.8 billion dollars which grew 2 billion dollars year-over-year and 600 million dollars sequentially. And we delivered a book to Bill ratio of 1.06 times.
Speaker #2: Thanks, Pete. Let's start with our financial performance for the fourth quarter on slide six. We delivered revenue of $5.7 billion which grew 4.8% organically year over year exceeding our expectations.
Jay Saccaro: Thanks, Pete. Let's start with our financial performance for the fourth quarter on slide six. We delivered revenue of $5.7 billion, which grew 4.8% organically year-over-year, exceeding our expectations. On a reported basis, product revenue grew 7.9% and service revenue grew 5.5%. In the quarter, orders growth was 2%, following 5.6% growth in the year-ago period. We exited the quarter with a record backlog of $21.8 billion, which grew $2 billion year-over-year and $600 million sequentially. We delivered a book-to-bill ratio of 1.06 times. Adjusted EBIT margin was 16.7%, down 200 basis points. Margin was negatively impacted by approximately $100 million in tariff expense as well as unfavorable mix.
Jay Saccaro: Thanks, Pete. Let's start with our financial performance for the fourth quarter on slide six. We delivered revenue of $5.7 billion, which grew 4.8% organically year-over-year, exceeding our expectations. On a reported basis, product revenue grew 7.9% and service revenue grew 5.5%. In the quarter, orders growth was 2%, following 5.6% growth in the year-ago period. We exited the quarter with a record backlog of $21.8 billion, which grew $2 billion year-over-year and $600 million sequentially. We delivered a book-to-bill ratio of 1.06 times. Adjusted EBIT margin was 16.7%, down 200 basis points. Margin was negatively impacted by approximately $100 million in tariff expense as well as unfavorable mix.
Adjusted ebit margin was 16.7% down. 200 basis points margin was negatively impacted by approximately 100 million dollars in tariff expense, as well as unfavorable mix.
Speaker #2: On a reported basis, product revenue grew 7.9% and service revenue grew 5.5%. In the quarter, orders growth was 2%, following 5.6% growth in the year-ago period.
This was partially offset by volume and price.
Adjusted EPS was 1.44 cents per share down 7% including approximately 17 cents of tariff impact. Excluding this impact
Speaker #2: We exited the quarter with a record backlog of $21.8 billion, which grew $2 billion year over year and $600 million sequentially. We delivered a book-to-bill ratio of 1.06 times. Adjusted EBIT margin was 16.7%, down 200 basis points.
Adjusted EPS, grew 11%.
lastly, free cash flow was 916 million in the quarter up 105 million, which included an approximate 90 million tariff impact,
Speaker #2: Margin was negatively impacted by approximately $100 million in tariff expense as well as unfavorable mix this was partially offset by volume and price. Adjusted EPS was $1.44 per share down 0.7% including approximately 17 cents of tariff impact.
Jay Saccaro: This was partially offset by volume and price. Adjusted EPS was $1.44 per share, down 0.7%, including approximately $0.17 of tariff impact. Excluding this impact, adjusted EPS grew 11%. Lastly, free cash flow was $916 million in the quarter, up $105 million, which included an approximate $90 million tariff impact. Turning to our full year results on slide seven. We made excellent progress in 2025, supported by strong end markets, particularly in the US and EMEA. This enabled us to deliver revenue of $20.6 billion with organic growth of 3.5%, ahead of guidance. On a reported basis, product revenue increased 4.5%, and service revenue grew 5.6%. For the year, organic orders grew in the mid-single digits.
Jay Saccaro: This was partially offset by volume and price. Adjusted EPS was $1.44 per share, down 0.7%, including approximately $0.17 of tariff impact. Excluding this impact, adjusted EPS grew 11%. Lastly, free cash flow was $916 million in the quarter, up $105 million, which included an approximate $90 million tariff impact. Turning to our full year results on slide seven. We made excellent progress in 2025, supported by strong end markets, particularly in the US and EMEA. This enabled us to deliver revenue of $20.6 billion with organic growth of 3.5%, ahead of guidance. On a reported basis, product revenue increased 4.5%, and service revenue grew 5.6%. For the year, organic orders grew in the mid-single digits.
Turning to our full year results on slide, 7, we met actually in progress in 2025, supported by strong and markets, particularly in the US. And EMA, this enabled us to deliver revenue of 20.6 billion with Organic growth of 3.5% ahead of guidance. On a reported basis, product Revenue, increase 4.5%, service Revenue, grew 5.6%
Speaker #2: Excluding this impact, adjusted EPS grew 11%. Lastly, free cash flow was $916 million in the quarter up 105 million which included an approximate $90 million tariff impact.
For the year organic orders grew in the mid single digits. We recorded record, backlog and booked a bill with solid at 1.07 times.
2025. Adjusted ebit margin of 15.3% declined. 100 basis points versus the prior year and adjusted EPS of $4.59 grew 2.2%.
Speaker #2: full year results on slide seven, we Turning to our made excellent progress in 2025. Supported by strong end markets, particularly in the US and EMEA, this enabled us to deliver revenue of $20.6 billion with organic growth of 3.5% ahead of guidance.
Speaker #2: On a reported basis, product revenue increased 4.5% and service revenue grew 5.6%. For the year organic orders grew in the mid-single digits we recorded record backlog and book-to-bill was solid at 1.07 times.
All your results included a tariff impact of approximately 245 million to ebit and 43 cents to adjusted EPS excluding these impacts adjusted ebit. Margin would be up 20 basis points for the year and adjusted EPS would grow 12%.
The Improvement was driven by volume and price.
Jay Saccaro: We recorded record backlog, and book-to-bill was solid at 1.07 times. 2025 adjusted EBIT margin of 15.3%, declined 100 basis points versus the prior year, and adjusted EPS of $4.59 grew 2.2%. Full year results included a tariff impact of approximately $245 million to EBIT and $0.43 to adjusted EPS. Excluding these impacts, adjusted EBIT margin would be up 20 basis points for the year, and adjusted EPS would grow 12%. The improvement was driven by volume and price. Turning to margin performance on slide 8. Mitigating tariff impact is another example of Heartbeat in action. For example, we enhanced manufacturing flexibility by shifting a PET CT line from the Middle East to the US and a surgery line from Asia to the US, leveraging existing infrastructure.
Jay Saccaro: We recorded record backlog, and book-to-bill was solid at 1.07 times. 2025 adjusted EBIT margin of 15.3%, declined 100 basis points versus the prior year, and adjusted EPS of $4.59 grew 2.2%. Full year results included a tariff impact of approximately $245 million to EBIT and $0.43 to adjusted EPS. Excluding these impacts, adjusted EBIT margin would be up 20 basis points for the year, and adjusted EPS would grow 12%. The improvement was driven by volume and price. Turning to margin performance on slide 8. Mitigating tariff impact is another example of Heartbeat in action. For example, we enhanced manufacturing flexibility by shifting a PET CT line from the Middle East to the US and a surgery line from Asia to the US, leveraging existing infrastructure.
Speaker #2: 2025 adjusted EBIT margin of 15.3% declined 100 basis points versus the prior year and adjusted EPS of $4.59 grew 2.2%. Full year results included a tariff impact of approximately $245 million to EBIT and 43 cents to adjusted EPS.
Turning to margin performance on slide 8, mitigating tariff impact is another example of heartbeat in action. For example, we enhance manufacturing, flexibility by shifting a PET. CT line from the Middle East to the US and a surgery line from Asia to the US leveraging, existing infrastructure.
we also partner with large vertically, integrated contract manufacturers to reposition production within their Global networks to more favorable geographies
Speaker #2: Excluding these impacts, adjusted EBIT margin would be up 20 basis points for the year and adjusted EPS would grow 12%. The improvement was driven by volume and price.
This is a Clear Proof point of how heartbeat enables execution accelerates change and delivers measurable results.
We're pleased with the work. Our teams are doing to drive operational, efficiency, productivity, and sgna optimization.
Speaker #2: Turning to margin performance on slide eight, mitigating tariff impact is another example of Heartbeat in action. For example, we enhanced manufacturing flexibility by shifting a PET-CT line from the Middle East to the US and a surgery line from Asia to the US.
at the same time we deployed more than 1.7 billion dollars of innovation investments in 2025,
We're doing this in a targeted way, prioritizing programs that strengthen our competitiveness and supports durable profitable growth.
Speaker #2: Leveraging existing infrastructure, we also partnered with large vertically integrated contract manufacturers to reposition production within their global networks to more favorable geographies. This is a clear proof point of how Heartbeat enables execution accelerates change and delivers measurable results.
Jay Saccaro: We also partnered with large, vertically integrated contract manufacturers to reposition production within their global networks to more favorable geographies. This is a clear proof point of how Heartbeat enables execution, accelerates change, and delivers measurable results. We're pleased with the work our teams are doing to drive operational efficiency, productivity, and SG&A optimization. At the same time, we deployed more than $1.7 billion of innovation investment in 2025. We're doing this in a targeted way, prioritizing programs that strengthen our competitiveness and support durable, profitable growth. Let's move on to segment performance, starting with imaging on slide 9. Organic revenue in the quarter was 5.3% versus the prior year, driven by strong execution in EMEA and the US, particularly in nuclear medicine. Segment EBIT margin benefited from volume and price, but declined year-over-year due to tariff pressure.
Jay Saccaro: We also partnered with large, vertically integrated contract manufacturers to reposition production within their global networks to more favorable geographies. This is a clear proof point of how Heartbeat enables execution, accelerates change, and delivers measurable results. We're pleased with the work our teams are doing to drive operational efficiency, productivity, and SG&A optimization. At the same time, we deployed more than $1.7 billion of innovation investment in 2025. We're doing this in a targeted way, prioritizing programs that strengthen our competitiveness and support durable, profitable growth. Let's move on to segment performance, starting with imaging on slide 9. Organic revenue in the quarter was 5.3% versus the prior year, driven by strong execution in EMEA and the US, particularly in nuclear medicine. Segment EBIT margin benefited from volume and price, but declined year-over-year due to tariff pressure.
Let's move on to segment performance starting with Imaging on slide 9 organic Revenue in the quarter was 5.3% versus the prior year driven by strong execution in Amia and the US
Particularly in nuclear medicine.
Speaker #2: We're pleased with the work our teams are doing to drive operational efficiency, productivity, and SG&A optimization. At the same time, we deployed more than 1.7 billion dollars of innovation investment in 2025.
Segment Eva Marge and benefited from volume and price but declined year-over-year due to tariff pressure.
Imaging margin was accretive, excluding tariffs even margin, improved sequentially as a result of continued, operational rigor.
Overall, we expect to continue to grow this business through. Large Enterprise deals and new product launches.
Speaker #2: We're doing this in a targeted way, prioritizing programs that strengthen our competitiveness and support durable, profitable growth. Let's move on to segment performance, starting with Imaging on slide nine.
Turning to Advanced visualization Solutions on slide 10. Organic revenue for the quarter was up, 4.2% with continued, strong performance in the US and the media.
New product adoption across the portfolio. Also contributed to revenue growth.
Speaker #2: Organic revenue in the quarter was 5.3% versus the prior year. Driven by strong execution in EMEA and the US, particularly in nuclear medicine. Segment EBIT margin benefited from volume and price but declined year over year due to tariff pressure.
Increased excluding the impact of tariffs.
We've seen progress driven by MPI with growth in surgery, cardiovascular and Women's Health.
Speaker #2: Imaging margin was accretive excluding tariffs EBIT margin improved sequentially as a result of continued operational rigor. Overall, we expect to continue to grow this business through large enterprise deals and new product launches.
Jay Saccaro: Imaging margin was accretive, excluding tariffs. EBIT margin improved sequentially as a result of continued operational rigor. Overall, we expect to continue to grow this business through large enterprise deals and new product launches. Turning to advanced visualization solutions on slide 10. Organic revenue for the quarter was up 4.2%, with continued strong performance in the US and EMEA. New product adoption across the portfolio also contributed to revenue growth. EBIT performance was driven by volume growth and productivity gains, offset by tariffs and inflation. EBIT margin increased, excluding the impact of tariffs. We've seen progress driven by NPIs with growth in surgery, cardiovascular, and women's health. Key introductions like Vivid Pioneer are strengthening our leadership in cardiovascular ultrasound. Looking ahead, our roadmap is focused on differentiated, data-driven technologies to accelerate recurring revenue.
Jay Saccaro: Imaging margin was accretive, excluding tariffs. EBIT margin improved sequentially as a result of continued operational rigor. Overall, we expect to continue to grow this business through large enterprise deals and new product launches. Turning to advanced visualization solutions on slide 10. Organic revenue for the quarter was up 4.2%, with continued strong performance in the US and EMEA. New product adoption across the portfolio also contributed to revenue growth. EBIT performance was driven by volume growth and productivity gains, offset by tariffs and inflation. EBIT margin increased, excluding the impact of tariffs. We've seen progress driven by NPIs with growth in surgery, cardiovascular, and women's health. Key introductions like Vivid Pioneer are strengthening our leadership in cardiovascular ultrasound. Looking ahead, our roadmap is focused on differentiated, data-driven technologies to accelerate recurring revenue.
Key. Introductions like Vivid Pioneer are strengthening our leadership in cardiovascular ultrasound.
Looking ahead, our road map is focused on differentiated data-driven Technologies to accelerate recurring Revenue.
Speaker #2: Turning to advanced visualization solutions on slide 10, organic revenue for the quarter was up 4.2%, with continued strong performance in the US and EMEA.
Speaker #2: New product adoption across the portfolio also contributed to revenue growth. EBIT performance was driven by volume growth and productivity gains offset by tariffs and inflation.
Turning to Patient Care Solutions on slide 11 organic Revenue. Improved sequentially with restoration of shipments from the third quarter product. Hold organic Revenue declined, 1.1% versus prior year due to a decline in life support Solutions.
Speaker #2: EBIT margin increased excluding the impact of tariffs. We've seen progress driven by MPIs with growth in surgery, cardiovascular, and women's health. Key introductions like Vivid Pioneer are strengthening our leadership in cardiovascular ultrasound.
Ebit margin improved, 530 basis points. Sequentially driven by volume recovery from the product. Hold
but declined, 380 basis points year-over-year largely due to unfavorable mix and tariffs.
Speaker #2: Looking ahead, our roadmap is focused on differentiated data-driven technologies to accelerate recurring revenue. Turning to patient care solutions on slide 11, organic revenue improved sequentially with restoration of shipments from the third quarter product hold.
Jay Saccaro: Turning to patient care solutions on slide 11, organic revenue improved sequentially, with restoration of shipments from the Q3 product hold. Organic revenue declined 1.1% versus prior year due to a decline in life support solutions. EBIT margin improved 530 basis points sequentially, driven by volume recovery from the product hold, but declined 380 basis points year-over-year, largely due to unfavorable mix and tariffs. Our monitoring transformation remains on track, driven by digitally integrated NPIs that enable improved clinical decision support and workflow management, as well as large commercial agreements. Looking ahead, we are also confident that our cost productivity funnel and structural optimization actions position PTS for profitability improvement in the future. Moving to pharmaceutical diagnostics on slide 12, we delivered another strong quarter with organic sales growth of 12.7%.
Jay Saccaro: Turning to patient care solutions on slide 11, organic revenue improved sequentially, with restoration of shipments from the Q3 product hold. Organic revenue declined 1.1% versus prior year due to a decline in life support solutions. EBIT margin improved 530 basis points sequentially, driven by volume recovery from the product hold, but declined 380 basis points year-over-year, largely due to unfavorable mix and tariffs. Our monitoring transformation remains on track, driven by digitally integrated NPIs that enable improved clinical decision support and workflow management, as well as large commercial agreements. Looking ahead, we are also confident that our cost productivity funnel and structural optimization actions position PTS for profitability improvement in the future. Moving to pharmaceutical diagnostics on slide 12, we delivered another strong quarter with organic sales growth of 12.7%.
Our monitoring transformation remains on track driven by digitally integrated NPI that enable improved clinical decision support and workflow management as well as large commercial agreements. Looking ahead. We're also confident that our cost productivity funnel and structural optimization actions position PCS for profitability, improvement in the future.
Speaker #2: declined 1.1% versus prior year due to a decline in Organic revenue life support solutions. EBIT margin improved $530 basis points sequentially driven by volume recovery from the product hold.
Moving to pharmaceutical Diagnostics on slide 12, we delivered another strong quarter with Organic sales, growth of 12.7%.
Speaker #2: But declined 380 basis points year over year, largely due to unfavorable mix and tariffs. Our monitoring transformation remains on track, driven by digitally integrated MPIs that enable improved clinical decision support and workflow management, as well as large commercial agreements.
This was driven by global growth in contrast media pricing execution and Adoption of our us radio pharmaceutical MPI portfolio.
Ebi grew 10% and sequential margin expanded 20 basis points while margin declined 330 basis points year-over-year due to ongoing planned investments in npi's along with the Nihon metaphysics acquisition
Speaker #2: Looking ahead, we are also confident that our cost productivity funnel and structural optimization actions position PCS for profitability improvement in the future. Moving to pharmaceutical diagnostics on slide 12, we delivered another strong quarter with organic sales growth of 12.7%.
We're executing our strategy and expect continued. Robust growth driven by global demand for contrast media and radio Pharmaceuticals for Pet Imaging.
Now, let's look at Cash performance.
And capital deployment on slide 13.
Speaker #2: This was driven by global growth in contrast media, pricing execution, and adoption of our U.S. radiopharmaceutical MPI portfolio. EBIT grew 10%, and sequential margin expanded 20 basis points, while margin declined 330 basis points year over year due to ongoing planned investments in NPIs along with the Nihon Medi-Physics acquisition.
Jay Saccaro: This was driven by global growth in contrast media, pricing execution, and adoption of our US radiopharmaceutical NPI portfolio. EBIT grew 10%, and sequential margin expanded 20 basis points, while margin declined 330 basis points year-over-year due to ongoing planned investments in NPIs, along with the Nihon Medi-Physics acquisition. We're executing our strategy and expect continued robust growth, driven by global demand for contrast media and radiopharmaceuticals for PET imaging. Now, let's look at cash performance and capital deployment on slide 13. For the year, we delivered free cash flow of $1.5 billion. This included approximately $285 million tariff impact. Free cash flow conversion was 72%. Reinvesting in innovation and organic growth is a top priority. This is translating into a differentiated product portfolio that we expect to improve our competitive position globally.
Jay Saccaro: This was driven by global growth in contrast media, pricing execution, and adoption of our US radiopharmaceutical NPI portfolio. EBIT grew 10%, and sequential margin expanded 20 basis points, while margin declined 330 basis points year-over-year due to ongoing planned investments in NPIs, along with the Nihon Medi-Physics acquisition. We're executing our strategy and expect continued robust growth, driven by global demand for contrast media and radiopharmaceuticals for PET imaging. Now, let's look at cash performance and capital deployment on slide 13. For the year, we delivered free cash flow of $1.5 billion. This included approximately $285 million tariff impact. Free cash flow conversion was 72%. Reinvesting in innovation and organic growth is a top priority. This is translating into a differentiated product portfolio that we expect to improve our competitive position globally.
For the year, we deliver free cash flow of 1.5 billion. Dollars this included approximately 285 million tariff impact. Free cash flow conversion was 72%.
Reinvesting in Innovation, and organic growth is a top priority. This is translating into a differentiated product portfolio that we expect to improve our competitive position globally.
We also looked at deploy Capital inorganically as evidenced by the 7s. We've closed since spin.
Speaker #2: We're executing our strategy and expect continued robust growth, driven by global demand for contrast media and radiopharmaceuticals for PET imaging. Now, let's look at cash performance and capital deployment on slide 13.
We're pleased that we've also been able to de-lever the balance sheet and solidify our investment grade credit ratings.
Speaker #2: For the year we delivered free cash flow of $1.5 billion. This included approximately $285 million tariff impact free cash flow conversion was 72%. Reinvesting in innovation and organic growth is a top priority.
during the year, we return Capital through our dividend and new share repurchase program, which we authorized was, which was authorized by our board in April since that time we've repurchased 200 million in shares at an average price of 71,
We continue to demonstrate conviction that our business strategy will drive meaningful shareholder return over time.
Speaker #2: Translating into a differentiated product, this is a portfolio that we expect to improve our competitive position globally. We also look to deploy capital inorganically, as evidenced by the seven acquisitions we've closed since spend.
Let's turn to our outlooks on slide 14 for 2026. We expect organic Revenue growth of 3 to 4%.
Jay Saccaro: We also look to deploy capital inorganically, as evidenced by the 7 acquisitions we've closed since then. We're pleased that we've also been able to deleverage the balance sheet and solidify our investment-grade credit ratings. During the year, we returned capital through our dividend and new share repurchase program, which was authorized by our board in April. Since that time, we've repurchased $200 million in shares at an average price of $71. We continue to demonstrate conviction that our business strategy will drive meaningful shareholder return over time. Let's turn to our outlook on slide 14. For 2026, we expect organic revenue growth of 3% to 4%. We've taken a prudent approach to this guidance, which reflects a healthy capital equipment environment and continued commercial execution, while factoring in a cautious outlook on China.
Jay Saccaro: We also look to deploy capital inorganically, as evidenced by the 7 acquisitions we've closed since then. We're pleased that we've also been able to deleverage the balance sheet and solidify our investment-grade credit ratings. During the year, we returned capital through our dividend and new share repurchase program, which was authorized by our board in April. Since that time, we've repurchased $200 million in shares at an average price of $71. We continue to demonstrate conviction that our business strategy will drive meaningful shareholder return over time. Let's turn to our outlook on slide 14. For 2026, we expect organic revenue growth of 3% to 4%. We've taken a prudent approach to this guidance, which reflects a healthy capital equipment environment and continued commercial execution, while factoring in a cautious outlook on China.
Speaker #2: We're pleased that we've also been able to deleverage the balance sheet and solidify our investment-grade credit ratings. During the year, we returned capital through our dividend and new share repurchase program, which was authorized by our board in April.
We've taken a prudent approach to this guidance, which reflects a healthy Capital Equipment, environment and continued commercial execution. While factoring in a cautious outlook on China,
Relative to Foreign Exchange. We expect the benefit to revenue of approximately 150 basis points for the year.
Speaker #2: Since that time we've repurchased $200 million in shares at an average price of $71. We continue to demonstrate conviction that our business strategy will drive meaningful shareholder return over time.
Adjusted ebit is expected to be in the range of 15.8, to 16.1% reflecting 50 to 80 basis points of expansion.
We continue to expect the impact from tariffs in 2026 to be less than 2025.
Speaker #2: Let's turn to our outlook on slide 14. For 2026 we expect organic revenue growth of 3 to 4%. We've taken a prudent approach to this guidance which reflects a healthy capital equipment environment and continued commercial execution while factoring in a cautious outlook on China.
We plan to continue our tariff, mitigation actions in 2026, including supply chain, shifts product transfers to more tariff, efficient geographies, and expansion of duty-free, usmca efforts.
Speaker #2: Relative to foreign exchange we expect to benefit to revenue of approximately $150 basis points for the year. Adjusted EBIT is expected to be in the range of 15.8 to 16.1% reflecting 50 to 80 basis points of expansion.
Jay Saccaro: Relative to foreign exchange, we expect a benefit to revenue of approximately 150 basis points for the year. Adjusted EBIT is expected to be in the range of 15.8% to 16.1%, reflecting 50 to 80 basis points of expansion. We continue to expect the impact from tariffs in 2026 to be less than 2025. We plan to continue our tariff mitigation actions in 2026, including supply chain shifts, product transfers to more tariff-efficient geographies, and expansion of duty-free USMCA efforts. Our adjusted effective tax rate is expected to be in the range of 20% to 21% for the full year. On adjusted EPS, we expect to deliver a range of $4.95 to $5.15, representing 8% to 12% growth.
Jay Saccaro: Relative to foreign exchange, we expect a benefit to revenue of approximately 150 basis points for the year. Adjusted EBIT is expected to be in the range of 15.8% to 16.1%, reflecting 50 to 80 basis points of expansion. We continue to expect the impact from tariffs in 2026 to be less than 2025. We plan to continue our tariff mitigation actions in 2026, including supply chain shifts, product transfers to more tariff-efficient geographies, and expansion of duty-free USMCA efforts. Our adjusted effective tax rate is expected to be in the range of 20% to 21% for the full year. On adjusted EPS, we expect to deliver a range of $4.95 to $5.15, representing 8% to 12% growth.
our adjusted effective tax rate is expected to be in the range of 20 to 21% for the full year on adjusted EPS, we expect to deliver a range of 495, to 515 representing 8 to 12% growth,
Lastly, we anticipate free cash flow of approximately 1.7 billion dollars for the full year. Representing growth of 13.0%
Speaker #2: We continue to expect the impact from tariffs in 2026 to be less than 2025. We plan to continue our tariff mitigation actions in 2026 including supply chain shifts product transfers to more tariff efficient geographies and expansion of duty-free USMCA efforts.
For the first quarter, we expect year-over-year organic Revenue growth to be in the range of 2 to 3%. While we expect to see the largest share of impact in the first quarter of the Year. Given the timing of the 2025 policy changes, we still expect mid single digit, adjusted EPS growth driven by an increase in volume.
Speaker #2: Our adjusted effective tax rate is expected to be in the range of 20 to 21% for the full year unadjusted EPS we expect to deliver a range of $4.95 to $5.15 representing 8 to 12% growth.
Last year supported by a strong US market along with the initial booking of a large Enterprise deal.
Speaker #2: Lastly we anticipate free cash flow of approximately $1.7 billion for the full year representing growth of 13.0%. For the first quarter we expect year over year organic revenue growth to be in the range of 2 to 3% while we expect to see the largest tariff impact in the first quarter of the year given the timing of the 2025 policy changes we still expect mid-single digit adjusted EPS growth driven by an increase in volume.
As Pete mentioned, we've got a robust pipeline of NPI upon clearance. We expect these to drive future orders. Growth beginning in 2026
Jay Saccaro: Lastly, we anticipate free cash flow of approximately $1.7 billion for the full year, representing growth of 13.0%. For Q1, we expect year-over-year organic revenue growth to be in the range of 2% to 3%. While we expect to see the largest tariff impact in Q1 of the year, given the timing of the 2025 policy changes, we still expect mid-single-digit adjusted EPS growth, driven by an increase in volume. For Q1, recall that we had particularly strong orders growth last year, supported by a strong US market, along with the initial booking of a large enterprise deal. As Pete mentioned, we've got a robust pipeline of MPIs. Upon clearance, we expect these to drive future orders growth beginning in 2026. With that, I'll turn the call back over to Pete. Pete?
Jay Saccaro: Lastly, we anticipate free cash flow of approximately $1.7 billion for the full year, representing growth of 13.0%. For Q1, we expect year-over-year organic revenue growth to be in the range of 2% to 3%. While we expect to see the largest tariff impact in Q1 of the year, given the timing of the 2025 policy changes, we still expect mid-single-digit adjusted EPS growth, driven by an increase in volume. For Q1, recall that we had particularly strong orders growth last year, supported by a strong US market, along with the initial booking of a large enterprise deal. As Pete mentioned, we've got a robust pipeline of MPIs. Upon clearance, we expect these to drive future orders growth beginning in 2026. With that, I'll turn the call back over to Pete. Pete?
With that, I'll turn the call back over to Pete.
Pete.
Thanks. Jay in conclusion, we enter 2026 with strong momentum as part of our ongoing commitment to Innovation, where proud of the demonstrated progress in our pipeline of new products.
We are deploying our business system heartbeat across the Enterprise to drive top, and bottom line growth.
Speaker #2: For the first quarter recall that we had particularly strong orders growth last year supported by a strong US market along with the initial booking of a large enterprise deal.
We have significant opportunities in large, resilient and markets or record backlog and are accelerating Innovation, both organically and inorganically.
Speaker #2: As Pete mentioned we've got a robust pipeline of MPIs upon clearance we expect these to drive future orders growth beginning in 2026. With that I'll turn the call back over to Pete.
We also see solid, runway for additional margin expansion over time.
Speaker #2: Pete. Thanks Jay. In conclusion we enter 2026 with strong momentum. As part of our ongoing commitment to innovation we're proud of the demonstrated progress in our pipeline of new products.
Peter Arduini: Thanks, Jay. In conclusion, we enter 2026 with strong momentum. As part of our ongoing commitment to innovation, we're proud of the demonstrated progress in our pipeline of new products. We are deploying our business system, Heartbeat, across the enterprise to drive top and bottom line growth. We have significant opportunities in large, resilient end markets, a record backlog, and are accelerating innovation both organically and inorganically. We also see solid runway for additional margin expansion over time. Lastly, I'd like to recognize our colleagues worldwide, who have navigated a dynamic environment while remaining focused on delivering for our customers and patients every day. With that, we'll open up the call for Q&A.
Peter Arduini: Thanks, Jay. In conclusion, we enter 2026 with strong momentum. As part of our ongoing commitment to innovation, we're proud of the demonstrated progress in our pipeline of new products. We are deploying our business system, Heartbeat, across the enterprise to drive top and bottom line growth. We have significant opportunities in large, resilient end markets, a record backlog, and are accelerating innovation both organically and inorganically. We also see solid runway for additional margin expansion over time. Lastly, I'd like to recognize our colleagues worldwide, who have navigated a dynamic environment while remaining focused on delivering for our customers and patients every day. With that, we'll open up the call for Q&A.
Lastly, I'd like to recognize our colleagues worldwide who have navigated a dynamic environment while remaining focused on delivering for our customers and patients every day with that, we'll open up the call for Q&A.
Thank you, Peter. I'd like to ask participants to please limit. Yourself to 1 question and 1, follow-up. Operator, can you please open the line?
Speaker #2: We are deploying our business system heartbeat across the enterprise to drive top and bottom line growth. We have significant opportunities in large resilient end markets a record backlog and are accelerating innovation both organically and inorganically.
Thank you and also minor Lisa and gentlemen, to ask a question, you will need to press star 1, 1 on your telephone and wait for your name to be announced.
To withdraw your question. Simply press star 1 1, again please, stand by while we compile the Q&A roster.
Speaker #2: We also see solid runway for additional margin expansion over time. Lastly, I'd like to recognize our colleagues worldwide. We have navigated a dynamic environment while remaining focused on delivering for our customers and patients every day.
now, first question, coming from the line of Matthew Taylor with Jeffrey Alan is now open
Hi, thanks for taking the question. Uh I did want to ask uh first for a little bit more color about the 2% order growth. If you could talk about the
Speaker #2: With that we'll open up the call for Q&A.
Speaker #3: Thank you, Peter. I'd like to ask participants to please limit yourselves to one question and one follow-up. Operator, can you please open the...
Carolynne Borders: 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?
Carolynne Borders: 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 #3: line? Thank you.
Position of that and just the outlook for orders and book the bill as you look into 2026, uh, given now trailing 12 month orders in, in the kind of the midst of all digit range. I mean, what are some of the puts and takes
Operator: Thank you. As a reminder, ladies and gentlemen, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, simply press star one one again. Please stand by while we compile the Q&A roster. Now, first question coming from the line of Matt Taylor with Jefferies. Your line is now open.
Operator: Thank you. As a reminder, ladies and gentlemen, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, simply press star one one again. Please stand by while we compile the Q&A roster. Now, first question coming from the line of Matthew Taylor with Jefferies. Your line is now open.
Speaker #4: And also Mona Lisa and gentlemen to ask a question you will need to press star 11 on your telephone and wait for your name to be announced.
What are some of the headwinds and Tailwinds for orders next year?
Speaker #4: So we draw your question simply press star 11 again. Please stand by while we compile the Q&A roster. Now first question coming from the line of Matthew Taylor with Jeffrey Seal and it's now open.
Speaker #5: Hi, thanks for taking the question. I did want to ask first for a little bit more color about the 2% order growth — if you could talk about the composition of that and just the outlook for orders and book-to-bill as you look into 2026, given now trailing 12-month orders in kind of the mid-single digit range.
Matt Taylor: Hi, thanks for taking the question. I did want to ask, first for a little bit more color about the 2% order growth, if you could talk about the composition of that and just the outlook for orders and book-to-bill as you look into 2026, given now trailing twelve-month orders in, in kind of the mid-single digit range. What are some of the puts and takes? I guess, what are some of the headwinds and tailwinds for orders next year?
Matthew Taylor: Hi, thanks for taking the question. I did want to ask, first for a little bit more color about the 2% order growth, if you could talk about the composition of that and just the outlook for orders and book-to-bill as you look into 2026, given now trailing twelve-month orders in, in kind of the mid-single digit range. What are some of the puts and takes? I guess, what are some of the headwinds and tailwinds for orders next year?
Um, Matt thanks for the question. So we were actually pleased with the order book performance in the fourth quarter. Um, and as I've said in the past when we when we think about the health of the business, we really look at 3 different areas. Um, we look at book to bill um, which we was 1.06 times, um, in the fourth quarter 1.07 times on a trailing 12-month basis. So robust book to Bill
We look at the backlog.
The backlog sits at a record level. It was up 2 billion dollars year-over-year.
Speaker #5: What are some of the puts and takes—I guess, what are some of the headwinds and tailwinds for orders next year?
Speaker #6: Sure. Matt, thanks for the question. So, we were actually pleased with the order book performance in the fourth quarter. And as I've said in the past, when we think about the health of the business, we really look at three different areas.
Jay Saccaro: Sure. Matt, thanks for the question. So we were actually pleased with the order book performance in Q4. And as I've said in the past, when we think about the health of the business, we really look at three different areas. We look at book-to-bill, which we was 1.06 times in Q4, 1.07 times on a trailing twelve-month basis. So robust book-to-bill. We look at the backlog. The backlog sits at a record level. It was up $2 billion year-over-year. And then finally, we look at the order growth rate. Now, when we look at orders, we do look at it in a couple of different ways. We look at the trailing twelve-month, as you pointed out, solidly in the mid-single digits.
Jay Saccaro: Sure. Matt, thanks for the question. So we were actually pleased with the order book performance in Q4. And as I've said in the past, when we think about the health of the business, we really look at three different areas. We look at book-to-bill, which we was 1.06 times in Q4, 1.07 times on a trailing twelve-month basis. So robust book-to-bill. We look at the backlog. The backlog sits at a record level. It was up $2 billion year-over-year. And then finally, we look at the order growth rate. Now, when we look at orders, we do look at it in a couple of different ways. We look at the trailing twelve-month, as you pointed out, solidly in the mid-single digits.
Speaker #6: We look at book to bill which we was 1.06 times in the fourth quarter 1.07 times on a trailing 12-month basis. So robust book to bill.
Speaker #6: We look at the backlog. The backlog sits at a record level it was up $2 billion year over year. And then finally we look at the order growth rate now when we look at orders we do look at it in a couple of different ways.
Speaker #6: We look at the trailing 12-month, as you pointed out, solidly in the mid-single digits, and we also look at a kind of two-year comparison—two-year compounded growth or stacked growth—to eliminate some anomalies there.
And then finally, we look at the order growth rate. Now, when we look at orders, uh we do look at it in a couple of different ways. Um, we look at the trailing 12 months, as you pointed out solidly in the mid single digits. Um, and we also look at a kind of 2 year. Comparison 2 year, compounded growth or stacked growth, um, to eliminate some anomalies there. Um, and again, this it gets us to about 4% in the quarter. So, um, we feel pleased with the order backdrop and then, as we look to next year, a few things are going to happen. Now, first, we'll have a difficult comp in the first quarter of the year related, to the the Sutter deal, um, and and some of those bookings. But then, as we move through the rest of the year, we'll start to see the benefit of many of the new products that we highlighted at rsna. Um, start to come into the order book. So we're really going to see a bit of an acceleration as we approach the second half of the year, um, versus
Jay Saccaro: And we also look at a kind of two-year comparison, two-year compounded growth or stacked growth to eliminate some anomalies there. And again, this, it gets us to about 4% in the quarter. So, we feel pleased with the order backdrop. And then as we look to next year, a few things are gonna happen. Now, first, we'll have a difficult comp in the Q1 of the year related to the Sutter deal, and some of those bookings. But then as we move through the rest of the year, we'll start to see the benefit of many of the new products that we highlighted at RSNA start to come into the order book. So we're really gonna see a bit of an acceleration as we approach the second half of the year, versus early in the year.
Jay Saccaro: And we also look at a kind of two-year comparison, two-year compounded growth or stacked growth to eliminate some anomalies there. And again, this, it gets us to about 4% in the quarter. So, we feel pleased with the order backdrop. And then as we look to next year, a few things are gonna happen. Now, first, we'll have a difficult comp in the Q1 of the year related to the Sutter deal, and some of those bookings. But then as we move through the rest of the year, we'll start to see the benefit of many of the new products that we highlighted at RSNA start to come into the order book. So we're really gonna see a bit of an acceleration as we approach the second half of the year, versus early in the year.
Speaker #6: And again, this gets us to about 4% in the quarter. So we feel pleased with the order backdrop, and then as we look to next year, a few things are going to happen.
Speaker #6: Now first, we'll have a difficult comp in the first quarter of the year related to the Sutter deal and some of those bookings.
Early in the year and we think this is a really good setup for 26. But, you know, as we think about sales impact, we start to see a great sales impact in 2027 Pete, anything to add, no just to the point that you mentioned J for for 26 this year. Um with all the new products we launched in Q4 it's not untypical, you know, we we
We're on track to all of those regulatory approvals, but until we have those approvals, we can't take an order on this.
Speaker #6: But then, as we move through the rest of the year, we'll start to see the benefit of many of the new products that we highlighted at RSNA start to come into the order book.
And once we, uh, get that approval, the orders will come in and ramp up rather quickly. Um, and if you recall, you know, there's 9 products that
Probably are the 9 biggest ones that we've had in the last.
Speaker #6: So, we're really going to see a bit of an acceleration as we approach the second half of the year versus early in the year, and we think this is a really good setup for '26.
Jay Saccaro: We think this is a really good setup for 2026, but, you know, as we think about sales impact, we start to see a great sales impact in 2027. Pete, anything to add?
Jay Saccaro: We think this is a really good setup for 2026, but, you know, as we think about sales impact, we start to see a great sales impact in 2027. Pete, anything to add?
Speaker #6: But you know as we think about sales impact we start to see a great sales impact in 2027. Pete anything to add?
Okay. So all of those have, you know, 100 million plus type capabilities and growth. So once we get the right Global regulatory approvals, we'll be able to start bringing those into the order books. So um, from that standpoint, the size of our backlog. I mean, we feel very good where we're positioned here as we start.
Speaker #2: No, just to the point that you mentioned, Jay, for '26, this year, with all the new products we launched in Q4, it's not untypical.
Peter Arduini: No, just to the point that you mentioned, Jay, for 2026 this year, with all the new products we launched in Q4, it's not untypical. You know, we have. We're on track to all of those regulatory approvals, but until we have those approvals, we can't take an order on this. And once we get that approval, the orders will come in and ramp up rather quickly. And if you recall, you know, there's nine products that probably are the nine biggest ones we've had in the last decade. So all of those have, you know, 100 million-plus type capabilities in growth. So once we get the right global regulatory approvals, we'll be able to start bringing those into the order book.
Peter Arduini: No, just to the point that you mentioned, Jay, for 2026 this year, with all the new products we launched in Q4, it's not untypical. You know, we have. We're on track to all of those regulatory approvals, but until we have those approvals, we can't take an order on this. And once we get that approval, the orders will come in and ramp up rather quickly. And if you recall, you know, there's nine products that probably are the nine biggest ones we've had in the last decade. So all of those have, you know, 100 million-plus type capabilities in growth. So once we get the right global regulatory approvals, we'll be able to start bringing those into the order book.
Speaker #2: You know we we have we're on track to all of those regulatory approvals but until we have those approvals we can't take an order on this.
Speaker #2: And once we get that approval the orders will come in and ramp up rather quickly. And if you recall you know there's nine products that probably aren't the nine biggest ones we've had in the last decade.
Current state of Supply, how things are going with the big partners that you signed? And the kind of reception that you're getting from facilities? Adopting forcado into existing revenue or spec workflows.
Speaker #2: So all of those have you know $100 million plus type capabilities in growth. So once we get the right global regulatory approvals we'll be able to start bringing those into the order book.
Yeah, no look. I I think, you know, broadly, as I mentioned, in the prepared remarks. Um, we feel really good about where we are with sarado. Uh, the feedback, you know, what's always. So important here is how do clinicians feel about this product and making a difference in the diagnosis of a patient?
Speaker #2: So from that standpoint, the size of our backlog—I mean, we feel very good where we're positioned here as we start the
Peter Arduini: From that standpoint, the size of our backlog, I mean, we feel very good where we're positioned here as we start the year.
Peter Arduini: From that standpoint, the size of our backlog, I mean, we feel very good where we're positioned here as we start the year.
Speaker #2: year. Great.
Speaker #5: And as a follow-up can I ask a question on for Qantas it's my favorite topic so I just wanted to get more color on current state of supply how things are going with the big partners that you signed and the kind of reception that you're getting from facilities adopting for Qantas into existing Robinium or Spec workflows.
Matt Taylor: Great. And as a follow-up, can I ask a question on Flyrcado? It's my favorite topic. So just wanted to get more color on current state of supply, how things are going with the big partners that you signed, and the kind of reception that you're getting from facilities adopting Flyrcado into existing Rubidium or SPECT workflows.
Matthew Taylor: Great. And as a follow-up, can I ask a question on Flyrcado? It's my favorite topic. So just wanted to get more color on current state of supply, how things are going with the big partners that you signed, and the kind of reception that you're getting from facilities adopting Flyrcado into existing Rubidium or SPECT workflows.
Speaker #6: Yeah no look I I think you know broadly as I mentioned in the prepared remarks we feel really good about where we are with for Qantas.
Peter Arduini: Yeah. No, look, I, I think, you know, broadly, as I mentioned in the prepared remarks, we feel really good about where we are with Flyrcado. The feedback. You know, what's always so important here is, how do clinicians feel about this product in making a difference in the diagnosis of a patient? And it is unanimous on the feedback relative to what we're hearing, relative to the image quality, the specificity, the sensitivity that it brings, and then also, ultimately, the convenience that it will bring to people that just can't ultimately have a generator on site. So it has all of those capabilities. That being said, the process to implement it is different.
Peter Arduini: Yeah. No, look, I, I think, you know, broadly, as I mentioned in the prepared remarks, we feel really good about where we are with Flyrcado. The feedback. You know, what's always so important here is, how do clinicians feel about this product in making a difference in the diagnosis of a patient? And it is unanimous on the feedback relative to what we're hearing, relative to the image quality, the specificity, the sensitivity that it brings, and then also, ultimately, the convenience that it will bring to people that just can't ultimately have a generator on site. So it has all of those capabilities. That being said, the process to implement it is different.
Speaker #6: The feedback you know what's always so important here is how do clinicians feel about this product and making a difference in the diagnosis of a patient.
Speaker #6: And it is unanimous on the feedback relative to what we're hearing relative to the image quality, the specificity, sensitivity that it brings, and then also ultimately the convenience that it will bring to people that just can't ultimately have a generator on site.
And it is, you know, unanimous on the feedback relative to what we're what we're hearing relative to the image quality, the specificity the sensitivity, that it brings. And then also ultimately the convenience that will bring to people that just can't ultimately have a generator on site. So it has all of those capabilities that being said the process to implement it's different. And so you know, the the thing that we talked about in our last call, I mentioned it here in the comments were consistently, delivering the doses is a critical item for us to focus on to provide the best experience because again if that doesn't show up that morning that's a missed patient. So we really you know, throttle back how many patients and customers we would bring on until the what we call otd on time delivery is at a 95% rate and we're roughly in that rate. So you know, you heard the numbers that I talked about
Speaker #6: So, it has all of those capabilities. That being said, the process to implement it's different, and so, you know, the thing that we talked about in our last call—I mentioned it here in the comments—where consistently delivering the doses is a critical item for us to focus on to provide the best experience.
Peter Arduini: And so, you know, the thing that we talked about in our last call, I mentioned it here in the comments, we're consistently delivering the doses is a critical item for us to focus on, to provide the best experience. Because, again, if that doesn't show up that morning, that's a missed patient. So we really, you know, throttle back how many patients and customers we would bring on until the, what we call OTD, On Time Delivery, is at a 95% rate, and we're roughly in that rate. So, you know, you heard the numbers that I talked about. You know, January, you know, roughly 220 was kind of what the weekly number was, I think we said on 23 January.
Peter Arduini: And so, you know, the thing that we talked about in our last call, I mentioned it here in the comments, we're consistently delivering the doses is a critical item for us to focus on, to provide the best experience. Because, again, if that doesn't show up that morning, that's a missed patient. So we really, you know, throttle back how many patients and customers we would bring on until the, what we call OTD, On Time Delivery, is at a 95% rate, and we're roughly in that rate. So, you know, you heard the numbers that I talked about. You know, January, you know, roughly 220 was kind of what the weekly number was, I think we said on 23 January.
Speaker #6: Because again if that doesn't show up that morning that's a missed patient. So we really you know throttle back how many patients and customers we would bring on until the what we call OTD on-time time delivery is at a 95% rate.
Speaker #6: And we're roughly in that rate so you know you heard the numbers that I talked about you know January you know roughly 220 was kind of what the weekly number was I think we said on January 23rd.
You have January, you know, uh, roughly 220 was kind of what the weekly number was. I think we said on January 23rd and the important part then is, is now that we have that CMO level we can continue now to, uh, be able to increase that level. And so we would expect that the doses will go up, uh, each of the following weeks. So, I think that's the really important part here and that, that consistency is key. We'll be bringing on more CMOS to go into more geographies and specifically to your point. You know, with the CVA CDL 2 of the biggest players really in North America here. Um, we're on the go slow to go fast, but I think both of those, we have great relationships. They see the potential, they see the opportunity to continue to, to expand. And so, we feel very good about where we are at at this point in time.
Great. Thanks for all the color.
Thank you.
Speaker #6: And the important part then is, now that we have that CMO level, we can continue now to be able to increase that level.
Peter Arduini: The important part then is now that we have that CMO level, we can continue now to be able to increase that level. So we would expect that the doses will go up each of the following weeks. So I think that's the really important part here, and that consistency is key. We'll be bringing on more CMOs to go into more geographies. And specifically to your point, you know, with the CVA, CDL, two of the biggest players really in North America here, we're on the go slow to go fast. But I think both of those, we have great relationships. They see the potential, they see the opportunity to continue to expand, and so we feel very good about where we are at this point in time.
Peter Arduini: The important part then is now that we have that CMO level, we can continue now to be able to increase that level. So we would expect that the doses will go up each of the following weeks. So I think that's the really important part here, and that consistency is key. We'll be bringing on more CMOs to go into more geographies. And specifically to your point, you know, with the CVA, CDL, two of the biggest players really in North America here, we're on the go slow to go fast. But I think both of those, we have great relationships. They see the potential, they see the opportunity to continue to expand, and so we feel very good about where we are at this point in time.
Our next question, coming from the line of Robbie Marcus with JP Morgan. Your line is Melvin.
Speaker #6: And so, we would expect that the doses will go up each of the following weeks. So I think that's the really important part here, and that that consistency is key.
Speaker #6: We'll be bringing on more CMOs to go into more geographies and specifically to your point you know with the CVA CDL two of the biggest players really in North America here we're on the go slow to go fast.
Hi, thanks. This is Alan on for Robbie. Um just to start off. Can you talk through some of your assumptions for China, and how we should think about, you know, potential upside when it comes to EPS versus Street expectations as well?
Speaker #6: But I think both of those we have great relationships they see the potential they see the opportunity to continue to to expand. And so we feel very good about where we are at at this point in
um okay so I think we got 2 questions here, 1 on China and then EPS um and I think that's related to 2026
um,
Speaker #6: time. Great.
Speaker #5: Thanks for all the color.
Matt Taylor: Great. Thanks for all the color.
Matthew Taylor: Great. Thanks for all the color.
Speaker #2: Thank Thank you.
Speaker #2: you. Our next
Jay Saccaro: Thank you.
Jay Saccaro: Thank you.
Speaker #1: question coming from the line of Robby Marcus with JP Morgan. Yellowness
Peter Arduini: Thank you.
Operator: Thank you.
Jay Saccaro: Our next question coming from the line of Robbie Marcus with J.P. Morgan, your line is now open.
Operator: Our next question coming from the line of Robbie Marcus with J.P. Morgan, your line is now open.
Speaker #1: Mountain. Hi.
Speaker #4: Thanks. This is Alan on for Robby. Just to start off, can you talk through some of your assumptions for China and how we should think about, you know, potential upside when it comes to EPS versus street expectations as
[Analyst] (JPMorgan Chase & Co.): Hi, thanks. This is Alan on for Robbie. Just to start off, can you talk through some of your assumptions for China and how we should think about, you know, potential upside when it comes to EPS versus street expectations as well?
[Analyst] (JPMorgan): Hi, thanks. This is Alan on for Robbie. Just to start off, can you talk through some of your assumptions for China and how we should think about, you know, potential upside when it comes to EPS versus street expectations as well?
Speaker #2: Okay. well? So I think we get two questions here one on China and then EPS and I think that's related to 2026. The you know from a from a China standpoint really this is evolved broadly in line with our expectations.
Jay Saccaro: Okay, so I think we got two questions there, one on China and then EPS, and I think that's related to 2026. You know, from a, from a China standpoint, really, this has evolved broadly in line with our expectations. We previously commented that the second half would be worse than the first half, and we also anticipated that the fourth quarter would be the most challenging quarter of the year, largely driven by prior year growth. So I would say all of that kind of came in line with our expectations. While we feel very good about the progress that our team is making in China, and we are seeing some improvements in things like VBP win rates, we're also seeing a more robust imaging funnel and some tender wins there.
Jay Saccaro: Okay, so I think we got two questions there, one on China and then EPS, and I think that's related to 2026. You know, from a, from a China standpoint, really, this has evolved broadly in line with our expectations. We previously commented that the second half would be worse than the first half, and we also anticipated that the fourth quarter would be the most challenging quarter of the year, largely driven by prior year growth. So I would say all of that kind of came in line with our expectations. While we feel very good about the progress that our team is making in China, and we are seeing some improvements in things like VBP win rates, we're also seeing a more robust imaging funnel and some tender wins there.
Speaker #2: We previously commented that the second half would be worse than the first half. And we also anticipated that the fourth quarter would be the most challenging quarter of the year largely driven by prior year growth.
the, you know, from a, from a China standpoint, really. This is evolved broadly in line with our expectations. Um, we previously commented that the second half would be worse than the first half, um, and we also anticipated that the fourth quarter would be the most challenging quarter of the Year largely driven by prior year growth. So, I would say all of that kind of came in line with our expectations. Um, while we feel very good about the progress that our team is making in China. And we are seeing some improvements in things, like vbp win rates, we're ALS seeing a more robust, um, Imaging funnel and some tender wins there. Um, you know, we, we really wanted to take a cautious approach to China when we put together this guidance. Um, and so in our 3 to 4%, uh, total company guidance, we're we're anticipating, uh, decline in China in 2026, you know, we'll watch this as we move throughout the year, but again, we wanted.
Speaker #2: So I would say all of that kind of came in line with our expectations. While we feel very good about the progress that our team is making in China and we are seeing some improvements and things like VBP win rates we're also seeing a more robust imaging funnel and some tender wins there.
Speaker #2: You know, we really wanted to take a cautious approach to China when we put together this guidance. And so in our 3% to 4% total company guidance, we're anticipating a decline in China in 2026.
Jay Saccaro: You know, we really wanted to take a cautious approach to China when we put together this guidance. And so in our 3% to 4% total company guidance, we're anticipating a decline in China in 2026. You know, we'll watch this as we move throughout the year, but again, we wanted to take a prudent approach at this point, and then let's see how things evolve. Pete, anything to add to this?
Jay Saccaro: You know, we really wanted to take a cautious approach to China when we put together this guidance. And so in our 3% to 4% total company guidance, we're anticipating a decline in China in 2026. You know, we'll watch this as we move throughout the year, but again, we wanted to take a prudent approach at this point, and then let's see how things evolve. Pete, anything to add to this?
Speaker #2: You know we'll watch this as we move throughout the year but again we wanted to take a prudent approach at this point and then let's see how things evolve.
Speaker #2: Pete anything to add to this?
Speaker #6: I would just say look I think it's a good perspective on how we're thinking about China early in the year as this prudent approach.
Peter Arduini: I would just say, look, I think it's a good perspective on how we're thinking about China early in the year as this prudent approach. You know, we're seeing improved commercial execution.
Peter Arduini: I would just say, look, I think it's a good perspective on how we're thinking about China early in the year as this prudent approach. You know, we're seeing improved commercial execution.
Speaker #6: You know we're seeing improved commercial execution I think Will and his team have pivoted to focus more on how we think about provincial interactions as well as the clinical selling.
Jay Saccaro: ... I think Will and his team have pivoted to focus more on how we think about provincial interactions, as well as the clinical selling. And so just to kind of give you a little bit of proof point why we feel good about the progress is, Jay mentioned the VBP tender win rates. I, I know, you know, you've heard from us, you've heard from others that some of the tenders and are being disputed, which lengthens them out before orders are issued. But we have good insights into those ones which we've won, which aren't converted to orders yet. And so we know that our rate in the last 6 months versus the prior 12, we're doing better. And then we would expect as those orders become issued through those tenders, that later, you know, Q2 and beyond, we'll start seeing some of that coming through.
Peter Arduini: ... I think Will and his team have pivoted to focus more on how we think about provincial interactions, as well as the clinical selling. And so just to kind of give you a little bit of proof point why we feel good about the progress is, Jay mentioned the VBP tender win rates. I, I know, you know, you've heard from us, you've heard from others that some of the tenders and are being disputed, which lengthens them out before orders are issued. But we have good insights into those ones which we've won, which aren't converted to orders yet. And so we know that our rate in the last 6 months versus the prior 12, we're doing better. And then we would expect as those orders become issued through those tenders, that later, you know, Q2 and beyond, we'll start seeing some of that coming through.
Speaker #6: And so just to kind of give you a little bit of proof point why we feel good about the progress is Jay mentioned the VBP tender win rates I I know you know you've heard from us you've heard from others that some of the tenders and and are being disputed which lengthens them out before orders are issued.
We're doing better. And then we would expect as those orders become issued through those tenders that later, you know, Q2 and Beyond will start seeing some of that coming through. All that being said, I think with Jay talked about is, we're taking a prudent approach when it comes to China. And obviously, if, uh, things come through at a stronger level, that will be an upside to us, but as we enter the year, I think we're coming in at the right, right spot.
Speaker #6: those ones which we've won. Which But we have good insights into aren't converted to orders yet. And so we know that our rate in the last six months versus the prior twelve we're doing better.
And then, I think you said, can you confirm you're asking about 2026 guidance? Is that? Is that the question DPS? Yeah, just, you know, how you got to the range? Why? This is the right range to start off the year and you know how you see upside to the initial targets.
Speaker #6: And then we would expect as those orders become issued through those tenders that later you know Q2 and beyond we'll start seeing some of that coming through.
Speaker #6: All that being said I think what Jay talked about is we're taking a prudent approach when it comes to China and obviously if things come through at a stronger level that will be an upside to us.
Jay Saccaro: All that being said, I think what Jay talked about is we're taking a prudent approach when it comes to China. And obviously, if things come through at a stronger level, that will be an upside to us. But as we enter the year, I think we're coming in at the right, right spot. And then I think you said. Well, can you confirm you're asking about 2026 guidance? Is that the question? EPS?
Peter Arduini: All that being said, I think what Jay talked about is we're taking a prudent approach when it comes to China. And obviously, if things come through at a stronger level, that will be an upside to us. But as we enter the year, I think we're coming in at the right, right spot. And then I think you said. Well, can you confirm you're asking about 2026 guidance? Is that the question? EPS?
Speaker #6: But as we enter the year, I think we're coming in at the right, right.
Speaker #6: spot. And then I think you said can
Speaker #2: you confirm you're asking about 2026 guidance? Is that is that the
Speaker #6: On EPS? question?
Speaker #4: Yeah. Just
Speaker #4: you know how you got to the range why this is the right range to start off the year and you know how you see upside to the initial
[Analyst] (JPMorgan Chase & Co.): Yeah, just, you know, how you got to the range, why this is the right range to start off the year, and, you know, how you see upside to the initial targets.
[Analyst] (JPMorgan): Yeah, just, you know, how you got to the range, why this is the right range to start off the year, and, you know, how you see upside to the initial targets.
No, listen. Thank you. I just wanted to make sure. So um as we think about the EPS guidance for 2026, uh, maybe we pause for a second on 2025, um, 1 of the things, I think our team was really proud of was the ability to deliver 2% EPS growth, um despite a 43 Cent tariff headwind. Um and so the result of that is we saw about 50 cents of eps growth. Um in 2025, you know, we were able when tariffs hit we took action, not only to reduce tariff exposure which is something. You know we spent a lot of energy and effort on but we also did some self-help cost management across the business and we saw some performance.
Speaker #4: targets. Yeah.
Speaker #2: Okay. No, listen. Thank you. I just wanted to make sure. So, as we think about the EPS guidance for 2026, maybe we pause for a second on 2025.
Jay Saccaro: Okay. No, listen, thank you. I just wanted to make sure. So, as we think about the EPS guidance for 2026, maybe we pause for a second on 2025. One of the things, I think our team was really proud of was the ability to deliver 2% EPS growth, despite a $0.43 tariff headwind. And so the result of that is we saw about $0.50 of EPS growth, in 2025.
Jay Saccaro: Okay. No, listen, thank you. I just wanted to make sure. So, as we think about the EPS guidance for 2026, maybe we pause for a second on 2025. One of the things, I think our team was really proud of was the ability to deliver 2% EPS growth, despite a $0.43 tariff headwind. And so the result of that is we saw about $0.50 of EPS growth, in 2025.
Speaker #2: One of the things I think our team was really proud of was the ability to deliver two percent EPS growth despite a forty-three cent tariff headwind.
Speaker #2: And so the result of that is we saw about fifty cents of EPS growth in 2025. You know we were able when tariffs hit we took action not only to reduce tariff exposure which is something you know we spent a lot of energy and effort on but we also did some self-help cost management across the business and we saw some performance from our heartbeat business system help improve our operating margins and reduce waste cost productivity et cetera.
Jay Saccaro: You know, we were able. When tariffs hit, we took action not only to reduce tariff exposure, which is something, you know, we spent a lot of energy and effort on, but we also did some self-help cost management across the business, and we saw some performance from our Heartbeat business system help improve our operating margins and reduce waste, cost productivity, et cetera. So all of that was, all of those things contributed to a solid performance in 2025. Now, moving to 2026, we're going to see many of those things resulting in positive impacts in our numbers again, without the drag of incremental tariffs, because now tariffs are neutral to positive to our financial performance.
Jay Saccaro: You know, we were able. When tariffs hit, we took action not only to reduce tariff exposure, which is something, you know, we spent a lot of energy and effort on, but we also did some self-help cost management across the business, and we saw some performance from our Heartbeat business system help improve our operating margins and reduce waste, cost productivity, et cetera. So all of that was, all of those things contributed to a solid performance in 2025. Now, moving to 2026, we're going to see many of those things resulting in positive impacts in our numbers again, without the drag of incremental tariffs, because now tariffs are neutral to positive to our financial performance.
Speaker #2: So all of that was contribute all of those things contributed to a solid performance in 2025. Now moving to twenty-six we're going to see many of those things resulting in positive impacts in our numbers again without the hopeful without the drag of incremental tariffs because now tariffs are neutral to positive to our financial performance.
From our heartbeat business system help um, improve our operating margins and reduce waste cost, productivity, Etc. So all of that was um contribute. All of those things contributed to a solid performance in 2025. Now, moving to 26. We're going to see many of those things. Um, resulting in positive impacts in our numbers again without the hopeful, without the drag of incremental terrorists, because now tariffs are neutral to positive to our financial performance. The other thing that happens in 2026 is we start to see some benefits from new products. Although that will be more predominant, um, in 2027. But things, like forcado things, like some of our AVS launches will impact performance on sales, um, in the second half of the year, um, and hopefully we'll see that impact. So, as we think about the growth in EPS, um, in 2026 at the
Midpoint of the range. It's about 45 cents. Um and as we think about the drivers of it about 30 cents will come from volume growth.
Speaker #2: The other thing that happens in 2026 is we start to see some benefit from new products although that will be more predominant in 2027.
Jay Saccaro: The other thing that happens in 2026 is we start to see some benefit from new products, although that will be more predominant in 2027. But things like Flyrcado, things like some of our AVS launches, will impact performance on sales in the second half of the year, and hopefully we'll see that impact. So as we think about the growth in EPS in 2026, at the midpoint of the range, it's about $0.45. And as we think about the drivers of it, about $0.30 will come from volume growth, about $0.30 will come from cost and productivity initiatives that we have, and then we'll offset that with continued investments in growth. For us, we're very focused on SG&A investments to drive acceleration in sales performance.
Jay Saccaro: The other thing that happens in 2026 is we start to see some benefit from new products, although that will be more predominant in 2027. But things like Flyrcado, things like some of our AVS launches, will impact performance on sales in the second half of the year, and hopefully we'll see that impact. So as we think about the growth in EPS in 2026, at the midpoint of the range, it's about $0.45. And as we think about the drivers of it, about $0.30 will come from volume growth, about $0.30 will come from cost and productivity initiatives that we have, and then we'll offset that with continued investments in growth. For us, we're very focused on SG&A investments to drive acceleration in sales performance.
About 30 cents will come from cost and productivity initiatives that we have and then we'll offset that with continued investments in growth for us. We're very focused on sgna investments to drive acceleration. In sales performance. We did spend in the fourth quarter, to start, to set that up, we'll spend
Speaker #2: But things like Forkado, things like some of our AVS launches will impact performance on sales in the second half of the year, and hopefully we'll see that impact.
Speaker #2: So, as we think about the growth in EPS in 2026, at the midpoint of the range, it's about $0.45. And as we think about the drivers of it, about $0.30 will come from volume growth, about $0.30 will come from cost and productivity initiatives that we have, and then we'll offset that with continued investments in growth.
Last year as well, along with R&D, we think these Investments are really crucial to the mid and long-term growth of the company, so we'll continue that that's really the complexion of how we deliver um on the EPS expansion next year.
Thanks James. If I could just slip it.
Thank you.
Our next question coming from the lineup.
Fargo, your line is Melvin.
Speaker #2: For us we're very focused on SG&A investments to drive acceleration in sales performance. We did spend in the fourth quarter to start to set that up.
Jay Saccaro: We did spend in the Q4 to start to set that up. We'll spend next year as well, along with R&D. We think these investments are really crucial to the mid- and long-term growth of the company, so we'll continue that. That's really the complexion of how we deliver on the EPS expansion next year.
Jay Saccaro: We did spend in the Q4 to start to set that up. We'll spend next year as well, along with R&D. We think these investments are really crucial to the mid- and long-term growth of the company, so we'll continue that. That's really the complexion of how we deliver on the EPS expansion next year.
Speaker #2: We'll spend next year as well along with R&D. We think these investments are really crucial to the mid and long-term growth of the company.
Hey, good morning. This is Vicken for Larry. Thanks for taking the question. Uh to me. Um I guess your organic growth. Guide is a 3 to 4%, implied, 3 and a half percent at the midpoint which is what you did in 2025, J. I think you said before that, you expect to grow faster in 2026. So maybe just talk about why? The midpoint of the 26 guidance is in line with 2025
Speaker #2: So we'll continue that. That's really the complexion of how we deliver on the EPS expansion next
Speaker #2: year. Next question Thanks Jay. if I could just slip it.
[Analyst] (JPMorgan Chase & Co.): Thanks, Jay.
[Analyst] (JPMorgan): Thanks, Jay.
Jay Saccaro: Next question?
Jay Saccaro: Next question?
[Analyst] (JPMorgan Chase & Co.): And if I could just flip it.
[Analyst] (JPMorgan): And if I could just flip it.
Speaker #7: Thank you. Our next question coming from the lineup. Larry Bickelson with Wells Fargo. You'll let us
And then I had to follow up. Yeah, big, thanks. Okay, thanks for the question. Um, so on the last earnings call and at JP Morgan conference, we kind of highlighted, we expect to grow sales in 2026 faster than 3%.
Operator: Thank you. Our next question coming from the line of Larry Biegelsen with Wells Fargo. Yolanda Melvin.
Operator: Thank you. Our next question coming from the line of Larry Biegelsen with Wells Fargo. Your line is now open.
Speaker #7: know. Hey.
Speaker #8: Good morning. This is Vic in for Larry. Thanks for taking the questions. Two for me. I guess your organic growth guidance of three to four percent implies three and a half percent at the midpoint which is what you did in 2025.
[Analyst] (Wells Fargo Securities): Hey, good morning. This is Vik for Larry. Thanks for taking the questions, two for me. I guess your organic growth guidance of 3 to 4% implies 3.5% at the midpoint, which is what you did in 2025. Jay, I think you said before that you expect to grow faster in 2026. So maybe just talk about why the midpoint of the 2026 guidance is in line with 2025? And then I had a follow-up.
[Analyst] (Wells Fargo): Hey, good morning. This is Vik for Larry. Thanks for taking the questions, two for me. I guess your organic growth guidance of 3 to 4% implies 3.5% at the midpoint, which is what you did in 2025. Jay, I think you said before that you expect to grow faster in 2026. So maybe just talk about why the midpoint of the 2026 guidance is in line with 2025? And then I had a follow-up.
Now, we expected to grow sales in 2025, at 3% and we did better than that. So we were pleased with that performance. But you know, this is very consistent with what we shared. Um, and and we feel good about the guidance to start the year. Um, remember at the start of last year we guided 2 to 3% and we ultimately did a little bit
Speaker #8: Jay I think you've said before that you expect a growth faster in 2026. So we just talk about why the midpoint of the twenty-six guidance is in line with twenty twenty-five?
Speaker #8: And then I had a
Speaker #8: follow-up. Yeah.
Speaker #2: Vic. Thanks. Yeah. Okay. Thanks for the question. So on the last. Earnings call and and at JP Morgan Conference we kind of highlighted we expect to grow sales in 2026 faster than three percent.
Jay Saccaro: Yeah, Vik, thanks. Yeah, okay, thanks for the question. So on the last earnings call and at J.P. Morgan conference, we kind of highlighted we expect to grow sales in 2026 faster than 3%. Now, we expected to grow sales in 2025 at 3%, and we did better than that, so we were pleased with that performance. But you know, this is very consistent with what we shared. And we feel good about the guidance to start the year. Remember, at the start of last year, we guided 2% to 3%, and we ultimately did a little bit better than that based on commercial execution and some of the early success in our innovation cycles.
Jay Saccaro: Yeah, Vik, thanks. Yeah, okay, thanks for the question. So on the last earnings call and at JPMorgan conference, we kind of highlighted we expect to grow sales in 2026 faster than 3%. Now, we expected to grow sales in 2025 at 3%, and we did better than that, so we were pleased with that performance. But you know, this is very consistent with what we shared. And we feel good about the guidance to start the year. Remember, at the start of last year, we guided 2% to 3%, and we ultimately did a little bit better than that based on commercial execution and some of the early success in our innovation cycles.
Speaker #2: Now we expect these to grow sales in 2025 at three percent and we did better than that. So we were pleased with that performance.
Speaker #2: But you know this is very consistent with what we shared. And and we feel good about the guidance to start the year. Remember at the start of last year we guided two to three percent and we ultimately did a little bit better than that based on commercial execution and some of the early success in our innovation cycles.
Speaker #2: As we start this year you know I'll I'll point you back to you know the two billion dollar increase in total backlog. I think that's a great setup to support our sales growth.
Jay Saccaro: As we start this year, you know, I'll point you back to, you know, the $2 billion increase in total backlog. I think that's a great setup to support our sales growth. And a lot of this revenue outlook is built on a strong, secured backlog that we have in place. We feel very good about the backlog that we've been able to develop over the last several quarters. We feel very good about the orders funnel that we have in place. So all of that sets us up well, as we approach 2026. And then also, as I just commented, you know, we're taking a pragmatic view on China. We want... You know, we're, we're watching this market very carefully. We've taken a, you know, conservative approach here. Let's, let's see how this plays out.
Jay Saccaro: As we start this year, you know, I'll point you back to, you know, the $2 billion increase in total backlog. I think that's a great setup to support our sales growth. And a lot of this revenue outlook is built on a strong, secured backlog that we have in place. We feel very good about the backlog that we've been able to develop over the last several quarters. We feel very good about the orders funnel that we have in place. So all of that sets us up well, as we approach 2026. And then also, as I just commented, you know, we're taking a pragmatic view on China. We want... You know, we're, we're watching this market very carefully. We've taken a, you know, conservative approach here. Let's, let's see how this plays out.
Speaker #2: And a lot of this revenue outlook is built on a strong secured backlog that we have in place. We feel very good about the backlog that we've been able to develop over the last several quarters, about the orders funnel that we have.
Speaker #2: We feel very good have in place so all of that sets us up well as we approach 2026. And then also as I just commented you know we're taking a pragmatic view on China.
We feel very good about the backlog that we've been able to develop over the last several quarters, we feel very good about the orders funnel that we have in place. So all of that sets us up well um, as we approach 2026 and then also, as I just commented, you know, we're taking a pragmatic view on China. We want, you know, we're we're watching this Market very carefully. Um, we've taken a, you know, conservative approach here, let's, let's see how this plays out, so it's early in the year, I think, you know, there's a lot of good momentum that our business is building, um, and we and we'll watch things very carefully, Pete. I don't know. If you want to add anything, I think you covered it Jay. But I mean, uh, the way we're set up here is obviously pending on when approvals come for some of the new products, our, our ability to convert the backlogs, um, the the ability ultimately to be able to convert some of the Acquisitions that we've had now that will start to roll into, um, organic growth, all of those position as well, uh, here for the year. So, I think
Speaker #2: We want you know we're we're watching this market very carefully. We've taken a you know conservative approach here. Let's let's see how this plays out.
Again as J laid out, I think it's the right place to start for the year. And, you know, we're going to be leaning in to be able to deliver.
Speaker #2: So it's early in the year. I think you know there's a lot of good momentum that our business is building. And we'll and we'll watch things very carefully.
Jay Saccaro: So it's early in the year. I think, you know, there's a lot of good momentum that our business is building, and we'll watch things very carefully. Pete, I don't know if you want to add anything. I think you covered it, Jay, but I mean, the way we're set up here is obviously pending on when approvals come for some of the new products.
Jay Saccaro: So it's early in the year. I think, you know, there's a lot of good momentum that our business is building, and we'll watch things very carefully. Pete, I don't know if you want to add anything.
Uh, thanks for that answer. A quick follow-up with me. Can you maybe talk about the timing of both orders and sales for uh Photon counting and some of the other NPI that you highlighted? Thank you.
Speaker #2: Pete I don't know if you want to add anything.
Speaker #6: I think you covered it Jay but I mean the way we're set up here is obviously pending on when approvals come for some of the new products are our ability to convert backlogs the the ability ultimately to be able to convert some of the start to roll into acquisitions that we've had now that will organic growth.
Peter Arduini: I think you covered it, Jay, but I mean, the way we're set up here is obviously pending on when approvals come for some of the new products.
Peter Arduini: ... our ability to convert backlogs, the ability ultimately to be able to convert some of the acquisitions that we've had now that will start to roll into organic growth, all of those position us well here for the year. So I think, again, as Jay laid out, I think it's the right place to start for the year, and, you know, we're gonna be leaning in to be able to deliver.
Peter Arduini: ... our ability to convert backlogs, the ability ultimately to be able to convert some of the acquisitions that we've had now that will start to roll into organic growth, all of those position us well here for the year. So I think, again, as Jay laid out, I think it's the right place to start for the year, and, you know, we're gonna be leaning in to be able to deliver.
Speaker #6: All of those position us well here for the year. So I think, again, as Jay laid out, I think it's the right place to start for the year. And, you know, we're going to be leaning in to be able to deliver.
Speaker #8: Thanks for that answer. A quick follow-up for me. Can you maybe talk about the timing of both orders and sales for Photon Counting and some of the other NPIs that you've highlighted?
[Analyst] (Wells Fargo Securities): Thanks for that answer. A quick follow-up for me: Can you maybe talk about the timing of both orders and sales for photon counting and some of the other NPIs that you've highlighted? Thank you.
[Analyst] (Wells Fargo): Thanks for that answer. A quick follow-up for me: Can you maybe talk about the timing of both orders and sales for photon counting and some of the other NPIs that you've highlighted? Thank you.
Speaker #8: Thank you.
Speaker #2: Yeah. No. Thanks. You know, as we—maybe my remarks here just a few minutes ago—our timelines for all of those significant launches are on track that we introduced at the RS&A.
Peter Arduini: Yeah, no, thanks. You know, as we-- maybe my remarks here just a few minutes ago, our timelines for all of those significant launches are on track, that we introduced at the RSNA. And we expect those to have, you know, the biggest meaningful contributions in 2027, mainly because the order cycle typically is six to nine months. When you get the order, you know, you have many of these have to be installed within a site. That being said, you know, much of these will have an impact at some point later this year, which we're very excited about. And, you know, as we're out with customers and stuff, there's just a lot of buzz about that pipeline that we have out there.
Peter Arduini: Yeah, no, thanks. You know, as we-- maybe my remarks here just a few minutes ago, our timelines for all of those significant launches are on track, that we introduced at the RSNA. And we expect those to have, you know, the biggest meaningful contributions in 2027, mainly because the order cycle typically is six to nine months. When you get the order, you know, you have many of these have to be installed within a site. That being said, you know, much of these will have an impact at some point later this year, which we're very excited about. And, you know, as we're out with customers and stuff, there's just a lot of buzz about that pipeline that we have out there.
Yeah. No thanks. You know, as we made in my remarks uh uh here just a few minutes ago, our timelines, for all of those significant launches are are on track that we introduced at the rsna, um, and we expect those to have, you know, the biggest meaningful contributions in 27. Mainly, because the order cycle typically is 6 to 9 months, when you get the order, you know, you have many of these have to be installed within a site that being said, um, you know, much of these will have an impact at some point later this year, which we're very excited about. And, you know, as we're out with customers and stuff, uh, there's just a lot of Buzz about that pipeline that we have out there. And so, uh, you know, things like the Ilia MOA, which is our vascular system that now is fully approved both by the FDA and see. It's really our first Interventional, vascular system of a modern design. And quite some time, we're excited about the growth that that's going to to bring forward. Um,
Speaker #2: And we expect those to have you know the biggest meaningful contributions in twenty-seven mainly because the order cycle typically is six to nine months when you get the order you know you have many of these have to be installed within a site.
Speaker #2: That being said you know much of these will have an impact at some point later this year. Which we're very excited about and you know as we're out with customers and stuff there's just a lot of buzz about that pipeline that we have out there.
The Omni total body pet, um, CE marked with 2 installs within Australia. And we also have a European installation. So great feedback that we're we're gaining our Star Guide GX which is the advanced system for doing Alpha as well as beta Imaging is is CE, Mark, and we're going to be doing our first installs here quite soon. And then things such as Mr. Which was the Sprint fream and the and the bolt. All of those are under review and
Speaker #2: And so you know things like the Alia Moveo which is our vascular system that now is fully approved both by the FDA and see it's really our first interventional vascular system of a modern design in quite some time.
Peter Arduini: You know, things like the Allia Moveo, which is our vascular system, that now is fully approved both by the FDA and CE. It's really our first interventional vascular system of a modern design in quite some time. We're excited about the growth that that's going to bring forward. The Omni Total Body PET, CE marked with 2 installs within Australia, and we also have a European installation. So great feedback that we're gaining. Our StarGuide GX, which is the advanced system for doing alpha as well as beta imaging, is CE marked, and we're gonna be doing our first installs here quite soon. And then things such as MR, which was the SIGNA Freelium and the Bolt, all of those are under review and making good progress.
Peter Arduini: You know, things like the Allia Moveo, which is our vascular system, that now is fully approved both by the FDA and CE. It's really our first interventional vascular system of a modern design in quite some time. We're excited about the growth that that's going to bring forward. The Omni Total Body PET, CE marked with 2 installs within Australia, and we also have a European installation. So great feedback that we're gaining. Our StarGuide GX, which is the advanced system for doing alpha as well as beta imaging, is CE marked, and we're gonna be doing our first installs here quite soon. And then things such as MR, which was the SIGNA Freelium and the Bolt, all of those are under review and making good progress.
Speaker #2: We're excited about the growth that that's going to to bring forward. The Omni Total Body Pet CE marked with two installs within Australia and and we also have a a European installation.
Speaker #2: So great feedback that we're we're gaining our star guide GX which is the advanced system for doing alpha as well as beta imaging is is CE marked and we're going to be doing our first installs here quite soon.
Speaker #2: And then things such as MR which was the sprint freelium and the and the bolt all of those are under review and and making good progress.
Speaker #2: We're seeing them making good progress. As well as care station on PhotoNova all systems go. I mean we're we're lined up you know we'll see how the approval timelines ultimately play out for us.
Peter Arduini: Pristina, making good progress, as well as Carestation. On Photonova, all systems go. I mean, we're lined up. You know, we'll see how the approval timelines ultimately play out for us, but we're in very good shape. Manufacturing teams getting everything ready to be able to advance that product. But I'm very proud of our engineering and manufacturing teams that have really come together. When we talk about our business system, we talk about this SQDCI, and safety of our folks, safety for patients, quality of the products, getting the delivery commitments at the right cost, then gives you the right to bring innovations out to the marketplace. And that's really the philosophy that we've put in place here. So feeling quite good about it.
Peter Arduini: Pristina, making good progress, as well as Carestation. On Photonova, all systems go. I mean, we're lined up. You know, we'll see how the approval timelines ultimately play out for us, but we're in very good shape. Manufacturing teams getting everything ready to be able to advance that product. But I'm very proud of our engineering and manufacturing teams that have really come together. When we talk about our business system, we talk about this SQDCI, and safety of our folks, safety for patients, quality of the products, getting the delivery commitments at the right cost, then gives you the right to bring innovations out to the marketplace. And that's really the philosophy that we've put in place here. So feeling quite good about it.
And making good progress Pristina making good progress. Um, as well as Care Station on Photo Nova all systems go. I mean we're we're lined up, you know, we'll see how the approval timelines ultimately play out for us but we're in very good shape. Uh, manufacturing teams, getting everything ready to be able to advance that product, but I'm very proud of our engineering and Manufacturing teams that have really come together. When we talk about our business system, we talked about this sqdc eye, and safety of our folks, safety for patients, quality of the products, hitting the delivery commitments. The right costs, then gives you the right to bring Innovations out to the marketplace and that's really the philosophy that we put in place here. So feeling quite good about it. You know, this business is so much about Innovation and I think we've got the right seats in place here to set us up. Well, not only later this year, but ultimately into 2728.
Uh, for our midterm targets.
Speaker #2: But we're in very good shape. Manufacturing teams getting everything ready to be able to advance that product. But I'm very proud of our engineering and manufacturing teams.
Zimmerman with btig, your line is Melvin.
Speaker #2: That have really come together. When we talk about our business system we talk about this SQDCI and safety of our folks safety for patients quality of the products hitting the delivery commitments the right cost then gives you the right to bring innovations out to the marketplace.
Speaker #2: And that's really the philosophy that we've put in place here. So feeling quite good about it. You know this business is so much about innovation and I think we've got the right seeds in place here to set us up well not only later this year but ultimately into twenty-seven twenty-eight for our midterm
Peter Arduini: You know, this business is so much about innovation, and I think we've got the right seeds in place here to set us up well, not only later this year, but ultimately into 2027, 2028, for our midterm targets.
Peter Arduini: You know, this business is so much about innovation, and I think we've got the right seeds in place here to set us up well, not only later this year, but ultimately into 2027, 2028, for our midterm targets.
Thank you. And, uh, congrats on the year, um, you know, on that point Pete on midterm targets. I guess I'll ask the question now, which is, you know with the midterm targets being mid single digit, rev growth, you know, High Teens, the 20% drops, even the margin Etc. You know just maybe you can kind of bridge us I think in terms of you know, the 26 guy to those medium-term targets and and kind of how you see that progressing over the next few years.
Speaker #2: targets. Thank you.
Speaker #1: Our next question coming from the lineup. Ryan Zimmerman with PTIG.
Operator: Thank you. Our next question coming from the line of Ryan Zimmerman with BTIG. Your line is now open.
Operator: Thank you. Our next question coming from the line of Ryan Zimmerman with BTIG. Your line is now open.
Speaker #1: You'll let us know.
Speaker #5: Thank
Speaker #5: you. And congrats on the year. You know on that point Pete on midterm targets I guess I'll ask the question now which is you know with the midterm targets being mid-single digit rev growth you know high teens to twenty percent up to even a margin et cetera.
Ryan Zimmerman: Thank you, and congrats on the year. You know, on that point, Pete, on midterm targets, I guess I'll ask the question now, which is: You know, with the midterm targets being mid-single digit rev growth, you know, high teens to 20% up EBITDA margin, et cetera, you know, just maybe you can kind of bridge us, I think, in terms of, you know, the 2026 guide to those medium-term targets and, and kind of how you see that progressing over the next few years.
Ryan Zimmerman: Thank you, and congrats on the year. You know, on that point, Pete, on midterm targets, I guess I'll ask the question now, which is: You know, with the midterm targets being mid-single digit rev growth, you know, high teens to 20% up EBITDA margin, et cetera, you know, just maybe you can kind of bridge us, I think, in terms of, you know, the 2026 guide to those medium-term targets and, and kind of how you see that progressing over the next few years.
1 to 2 points of of additional sales growth over.
Speaker #5: You know just maybe you can kind of bridge us I think in terms of you know the twenty-six guide to those medium-term targets and and kind of how you see that progressing over the next few
Speaker #5: years.
Speaker #3: Yeah. We'll take a shot at it. Sure. Look we feel good about the midterm targets that we've put together. I think you know one of the things that this this year is a setup.
[Analyst] (Wells Fargo Securities): Want to take a shot at it, Jay?
Peter Arduini: Want to take a shot at it, Jay?
Peter Arduini: Yeah, sure. Look, we feel good about the midterm targets that we've put together. I think, you know, one of the things that this year is a setup, but as we move to next year, you start to see the real benefit from many of the new products we launched at RSNA. We expect those products, along with Flyrcado, to help drive 1 to 2 points of additional sales growth over the medium term. And then, you know, from a margin expansion standpoint, you know, we're pleased to get back to reasonable margin expansion. 50 to 80 basis points is more reflective of what a normal year should look like.
Jay Saccaro: Yeah, sure. Look, we feel good about the midterm targets that we've put together. I think, you know, one of the things that this year is a setup, but as we move to next year, you start to see the real benefit from many of the new products we launched at RSNA. We expect those products, along with Flyrcado, to help drive 1 to 2 points of additional sales growth over the medium term. And then, you know, from a margin expansion standpoint, you know, we're pleased to get back to reasonable margin expansion. 50 to 80 basis points is more reflective of what a normal year should look like.
Speaker #3: But as we move to next year you start to see the real benefit from many of the new products we launched at RS&A. We expect those products along with Workato to help drive one to two points of of additional sales growth over the medium term.
Speaker #3: And then you know from a margin expansion standpoint you know we're pleased to get back to reasonable margin expansion fifty to eighty basis points is more reflective of what a normal year should look like.
Speaker #3: But with Heartbeat helping us to deliver higher margin NPIs to improve productivity to optimize SG&A you know we we expect to deliver on our high teens to twenty percent plus margin targets over the medium term.
Um, and then, you know, from a large and expansion standpoint, you know, we're pleased to get back to reasonable margin expansion. 50 to 80 basis points is more reflective of what a normal year should look like. Um, but with heartbeat helping us to deliver higher margin NPI to improve productivity to optimize sgna. You know, we, we expect to deliver on our High Teens to 20% plus margin targets, um, over the medium term. So all of this will flow down to EPs and we'll continue to see this High single digit to low double digit growth. So, in short? We feel solid Pete. Yeah, then Ryan just to to the point, I mean we're committed to those midterm targets top and bottom full stop. I I think, you know, we realize that the tariffs kind of moved us back a year or 2 just based on. That's why we really started aggressively last year with moves with changes things of that nature that uh would make a significant difference because our goal ultimately is
Peter Arduini: But with Heartbeat helping us to deliver higher margin NPIs, to improve productivity, to optimize SG&A, you know, we, we expect to deliver on our high teens to 20%+ margin targets, over the medium term. So all of this will flow down to EPS, and we'll continue to see this high single-digit to low double-digit growth. So in short, we feel solid. Pete? Yeah, and Ryan, just to, to the point, I mean, we're committed to those midterm targets, top and bottom, full stop. I, I think, you know, we realize that the tariffs kind of moved us back a year or two, just based on... That's why we really started aggressively last year with moves, with changes, things of that nature, that would make a significant difference.
Jay Saccaro: But with Heartbeat helping us to deliver higher margin NPIs, to improve productivity, to optimize SG&A, you know, we, we expect to deliver on our high teens to 20%+ margin targets, over the medium term. So all of this will flow down to EPS, and we'll continue to see this high single-digit to low double-digit growth. So in short, we feel solid. Pete?
Speaker #3: So all of this will flow down to EPS and we'll continue to see this high single digit to low double digit growth. So in short we feel solid.
Speaker #3: Pete?
Speaker #6: Yeah. And Ryan just to to the point I mean we're committed to those midterm targets top and bottom full stop. I I think you know we realize that the tariffs kind of moved us back a year or two just based on that's why we really started aggressively last year with moves with changes things of that nature.
Is to neutralize as much of that, as possible to move us, obviously into that 17 to 20% plus EPS range. And hopefully, you see from even the guide this year, that we've put out there, we've made good progress from what we've done last year. And, and I think our focus on our all, our NPI having higher growth margins than their predicates with the right, uh, selling and lift to that, we'll see the benefit.
Peter Arduini: Yeah, and Ryan, just to, to the point, I mean, we're committed to those midterm targets, top and bottom, full stop. I, I think, you know, we realize that the tariffs kind of moved us back a year or two, just based on... That's why we really started aggressively last year with moves, with changes, things of that nature, that would make a significant difference.
As well as the corresponding service Revenue that comes with it. All of that together, you know, is going to be very important for us. Not only for our Topline but also to be able to deliver on our medium-term profit goals as well.
Speaker #6: That would make a significant difference because our goal ultimately is is to neutralize as much of that as possible to move us obviously into that seventeen to twenty percent plus EPS range and hopefully you see from even the guide this year that we've put out there we've made good progress from what we've done last year.
Peter Arduini: Because our goal ultimately is to neutralize as much of that as possible, to move us obviously into that 17% to 20%+ EPS range. And hopefully, you see from even the guide this year that we've put out there, we've made good progress from what we've done last year. I think our focus on all our NPIs having higher gross margins than their predicates, with the right selling and lift to that, we'll see the benefit, as well as the corresponding service revenue that comes with it. All of that together, you know, is gonna be very important for us, not only for our top line, but also to be able to deliver on our medium-term profit goals as well.
Peter Arduini: Because our goal ultimately is to neutralize as much of that as possible, to move us obviously into that 17% to 20%+ EPS range. And hopefully, you see from even the guide this year that we've put out there, we've made good progress from what we've done last year. I think our focus on all our NPIs having higher gross margins than their predicates, with the right selling and lift to that, we'll see the benefit, as well as the corresponding service revenue that comes with it. All of that together, you know, is gonna be very important for us, not only for our top line, but also to be able to deliver on our medium-term profit goals as well.
Speaker #6: And and I think our focus on our all our NPIs having higher gross margins than their predicates with the right selling and lift to that we'll see the benefit.
Speaker #6: As well as the corresponding service revenue that comes with it. All of that together, you know, is going to be very important for us—not only for our top line, but also to be able to deliver on our medium-term profit goals as
Speaker #6: Well. And Pete, it’s like you’re—
And Pete. It's like you're anticipating my next question, here, the, the RPO and the, you know, specifically the service RPO was up really well. And, you know, I'm just wondering if you can kind of elaborate on kind of the composition of service Revenue, you know, and how as that becomes more predictable. You know, we can see that start to flow through, you know, particularly in the guide. You know, if I think about the midterm you know the the 3 and a half percent you know this year or whatever it may be. I mean you know if your service revenue and your service IPO is just becoming that much more predictable with Intel red and other things. I mean just help us understand kind of what that looks like as a percentage or a composition of your broader revenue and maybe moving away from you know, lumpier Capital sales.
Ryan Zimmerman: And, Pete, it's like you're anticipating my next question here. The RPO and, you know, specifically the service RPO, was up really well. And, you know, I'm just wondering if you can kind of elaborate on kind of the composition of service revenue, you know, and how, as that becomes more predictable, you know, we can see that start to flow through, you know, particularly in the guide.
Ryan Zimmerman: And, Pete, it's like you're anticipating my next question here. The RPO and, you know, specifically the service RPO, was up really well. And, you know, I'm just wondering if you can kind of elaborate on kind of the composition of service revenue, you know, and how, as that becomes more predictable, you know, we can see that start to flow through, you know, particularly in the guide.
Speaker #5: anticipating my next question here. The the RPO and the you know specifically the service RPO was up really well. And you know I'm just wondering if you can kind of elaborate on kind of the composition of service revenue you know and how as that becomes more predictable you know we can see that start to flow through you know particularly in the guide you know if if I think about the midterm you know the the three and a half percent you know this year or whatever it may be I mean you know if your service revenue and your service IPO is just becoming that much more predictable with Intelliren and other things I mean just help us understand kind of what that looks like as a percentage or a composition of your broader revenue and maybe moving away from you know lumpier capital sales.
Ryan Zimmerman: You know, if I think about the midterm, you know, the 3.5%, you know, this year, or whatever it may be, I mean, you know, if your service revenue and your service IPO is just becoming that much more predictable with Intelerad and other things, I mean, just help us understand kind of what that looks like as a percentage or a composition of your broader revenue and maybe moving away from, you know, lumpier capital sales.
Ryan Zimmerman: You know, if I think about the midterm, you know, the 3.5%, you know, this year, or whatever it may be, I mean, you know, if your service revenue and your service IPO is just becoming that much more predictable with Intelerad and other things, I mean, just help us understand kind of what that looks like as a percentage or a composition of your broader revenue and maybe moving away from, you know, lumpier capital sales.
Yeah, we've talked extensively about our goal to expand recurring Revenue, um, and so we're definitely pleased to see service growth. Um, and then to your point, the intelliride deal is another example that starts to tilt us more to recurring Revenue. Um, Services was a bright spot for us. I have to say in the fourth quarter, and in 2025, we grew sales 6%, um, with with, uh, with growth driven by both price and volume. Um, and, you know, the, the reality is
As we continue to expand our Enterprise agreements. Um, they typically include a meaningful multi-year service elements.
Speaker #2: Yeah. We've talked extensively about our goal to expand recurring revenue and so we're definitely pleased to see service growth. And then to your point the Intellirad deal is another example that starts to tilt us more to recurring revenue.
Jay Saccaro: Yeah, we've talked extensively about our goal to expand recurring revenue. So we're definitely pleased to see service growth. Then to your point, the Intelerad deal is another example that starts to tilt us more to recurring revenue. Services was a bright spot for us, I have to say. In Q4 and in 2025, we grew sales 6%, with growth driven by both price and volume. You know, the reality is, as we continue to expand our enterprise agreements, they typically include a meaningful multi-year service elements.
Jay Saccaro: Yeah, we've talked extensively about our goal to expand recurring revenue. So we're definitely pleased to see service growth. Then to your point, the Intelerad deal is another example that starts to tilt us more to recurring revenue. Services was a bright spot for us, I have to say. In Q4 and in 2025, we grew sales 6%, with growth driven by both price and volume. You know, the reality is, as we continue to expand our enterprise agreements, they typically include a meaningful multi-year service elements.
Speaker #2: Services was a bright spot for us I have to say in the fourth quarter and in two thousand twenty-five we grew sales six percent with with with growth driven by both price and volume.
Speaker #2: And you know the the reality is as we continue to expand our enterprise agreements they typically include a meaningful multi-year service elements. The other thing that's happening is you know we have a growing installed base and because of the complexity and technology embedded in our products and because of advancements that we're making in how our service offering is delivered things like AI remote fix we're seeing improved capture rates on our service on our service business which is a really important metric for us.
Jay Saccaro: The other thing that's happening is, you know, we have a growing installed base, and because of the complexity and technology embedded in our products, and because of advancements that we're making in how our service offering is delivered, things like AI remote fix, we're seeing improved capture rates, on our service, on our service business, which is a really important metric for us. And so all of that is good. And then the other thing that's happening, Ryan, is we're seeing utilization based on procedures of our equipment. And when that happens, and departments are constrained, and equipment is used heavily, the need for service is there. So I think there's a whole set of dynamics that are supporting continued robust growth in our service business, and, you know, our team is ready to support that. Pete?
Jay Saccaro: The other thing that's happening is, you know, we have a growing installed base, and because of the complexity and technology embedded in our products, and because of advancements that we're making in how our service offering is delivered, things like AI remote fix, we're seeing improved capture rates, on our service, on our service business, which is a really important metric for us. And so all of that is good. And then the other thing that's happening, Ryan, is we're seeing utilization based on procedures of our equipment. And when that happens, and departments are constrained, and equipment is used heavily, the need for service is there. So I think there's a whole set of dynamics that are supporting continued robust growth in our service business, and, you know, our team is ready to support that. Pete?
The other thing that's happening is, you know, we have a growing installed base and because of the complexity and Technology embedded in our products, um, and because of advancements that we're making in how our service offering is delivered. Things like, AI remote fix. We're seeing improved capture rates, um, on our service on, on our service business, which is a really important metric for us. And so, all of that is good. And then, the other thing that's happening, Ryan is we're seeing utilization based on procedures of our equipment, and when that happens and and departments are constrained. And and equipment is used heavily the need for services there. So I think there's a whole set of dynamics that are supporting continued robust growth in our service business and you know our team is ready to support that Pete. Yeah and Ryan I think you alluded to this. Just off the the new products piece, there is a flywheel effect, as you bring new products out, you bring new products.
Speaker #2: And so all of that is good. And then the other thing that's happening, Ryan, is we're seeing utilization based on procedures of our equipment.
Out that are very sophisticated. AI based Cloud, you know, the capture rate on the service, contracts typically goes up mainly because there's such a sophisticated product and a product, like total body, pet, or, um, something like Photon counting where the actual price of the product is higher than a lot of the predicate products. So,
Speaker #2: And when that happens and and departments are constrained and and equipment is used heavily the need for services there. So I think there's a whole set of dynamics that are supporting continued robust growth in our service business and you know our team is ready to support that.
Is your service contract with margins that would be at that same level so um that's some of the Tailwind that we think ultimately will come along with it. It's a really important part of a sustainable revenue and profit story as well over the long run.
Appreciate it. Thank you.
Speaker #2: Pete?
Speaker #6: Yeah. And Ryan I think you alluded to this just off the the new products piece. There is a flywheel effect as you bring new products out.
Peter Arduini: Yeah, and Ryan, I think you alluded to this just off the new products piece. There is a flywheel effect as you bring new products out. You bring new products out that are very sophisticated, AI-based, cloud, you know, the capture rate on the service contracts typically goes up, mainly because they're such a sophisticated product. And a product like Total Body PET or, something like photon counting, where the actual price of the product is higher than a lot of the predicate products, so is your service contract with margins that would be at that same level. So, that's some of the tailwind that we think ultimately will come along with it. It's a really important part of a sustainable revenue and profit story as well over the long run.
Peter Arduini: Yeah, and Ryan, I think you alluded to this just off the new products piece. There is a flywheel effect as you bring new products out. You bring new products out that are very sophisticated, AI-based, cloud, you know, the capture rate on the service contracts typically goes up, mainly because they're such a sophisticated product. And a product like Total Body PET or, something like photon counting, where the actual price of the product is higher than a lot of the predicate products, so is your service contract with margins that would be at that same level. So, that's some of the tailwind that we think ultimately will come along with it. It's a really important part of a sustainable revenue and profit story as well over the long run.
Speaker #6: You bring new products out that are very sophisticated AI-based cloud you know the capture rate on the service contracts typically goes up. Mainly because there's such a sophisticated product.
Your line is now open.
Speaker #6: And in a product like Total Body PET, or something like photon counting, where the actual price of the product is higher than a lot of the predicate products.
Uh thanks and maybe I'll stick with some of the inputs into the Topline guide to 3 to 4 percentage.
Speaker #6: So is your service contract with margins that would be at that same level. So that's some of the tailwind that we think ultimately will come along with it.
New product introductions this year versus last year. So how do you think about price in 2026 and and Pete and Jay, both brought up in terata, came up on the last question.
Speaker #6: It's a really important part of a sustainable revenue and profit story as well, over the long term.
You know, 270 million growing low, double digits 30% margin. Um maybe just a little bit timing of that deal closed.
Speaker #6: run.
Speaker #5: Appreciate it. Thank
Speaker #5: you. Thank
Ryan Zimmerman: Appreciate it. Thank you.
Ryan Zimmerman: Appreciate it. Thank you.
Speaker #7: you. Now our next question coming from the line of Anthony Petroni.
Operator: Thank you. Our next question coming from the line of Anthony Petrone with Mizuho Group. Your line is now open.
Operator: Thank you. Our next question coming from the line of Anthony Petrone with Mizuho Group. Your line is now open.
Um and just the drivers of that business, like how many sites uh outpatient are live on day? 1 is opening new sites or just new users sort of the the the growth kpi that we should be looking for. Thanks.
Speaker #8: Thanks. And maybe I'll stick with some of the inputs into the top line guide to three to four percent. Maybe one would be on just you know how much price is actually in there just considering you have a fair amount of new product introductions this year versus last year.
Anthony Petrone: Thanks. And maybe I'll stick with some of the inputs into the top-line guide to 3% to 4%. Maybe one beyond just, you know, how much price is actually in there, just considering you have a fair amount of new product introductions this year versus last year. So how do you think about price in 2026? And Pete and Jay both brought up Intelerad. It came up on the last question. You know, $270 million growing low double digits, 30% margin, maybe just a little bit timing of that deal close, and just the drivers of that business, like how many sites, outpatient are live on day one? Is opening new sites or just new users, sort of the growth KPI that we should be looking for? Thanks.
Anthony Petrone: Thanks. And maybe I'll stick with some of the inputs into the top-line guide to 3% to 4%. Maybe one beyond just, you know, how much price is actually in there, just considering you have a fair amount of new product introductions this year versus last year. So how do you think about price in 2026? And Pete and Jay both brought up Intelerad. It came up on the last question. You know, $270 million growing low double digits, 30% margin, maybe just a little bit timing of that deal close, and just the drivers of that business, like how many sites, outpatient are live on day one? Is opening new sites or just new users, sort of the growth KPI that we should be looking for? Thanks.
Speaker #8: So how do you think about price in twenty twenty-six and and Pete and Jay both brought up Intellirad it came up on the last question.
Speaker #8: You know two hundred and seventy million growing low double digits thirty percent margin maybe just a little bit timing of that deal close and just the drivers of that business like how many sites outpatient are live on day one is opening new sites or just new users sort of the the the growth KPI that we should be looking for.
Thank you. Look on on price. Um I think from a orders book standpoint with the new products you know some of it will show up in mix uh but and for like for like products uh like for like product price as well, but I think uh you know a lot of that will first be seen in the orders book as those new products come out relative to this year in Revenue. Um, we don't have any, you know, significant step UPS in in price, we have price advancement this year. I think based on as the tariffs are settling out and we see how the global landscape plays there could be opportunity for more price later. This year that'll be something that will be taking a look at but I think as we entered the year,
Speaker #8: Thanks.
Speaker #6: Thanks Anthony. Look on
Peter Arduini: Thanks, Anthony. Look, on price, I think from a orders book standpoint with the new products, you know, some of them will show up in mix, but and for like for like products, like for like product price as well. But I think, you know, a lot of that will first be seen in the orders book as those new products come out. Relative to this year in revenue, we don't have any, you know, significant step-ups in price. We have price advancement this year. I think based on as the tariffs are settling out and we see how the global landscape plays, there could be opportunity for more price later this year.
Peter Arduini: Thanks, Anthony. Look, on price, I think from a orders book standpoint with the new products, you know, some of them will show up in mix, but and for like for like products, like for like product price as well. But I think, you know, a lot of that will first be seen in the orders book as those new products come out. Relative to this year in revenue, we don't have any, you know, significant step-ups in price. We have price advancement this year. I think based on as the tariffs are settling out and we see how the global landscape plays, there could be opportunity for more price later this year.
Speaker #6: on price I think from a orders book standpoint with the new products you know some of it will show up in mix but and for like for like products like for like product price as well.
Speaker #6: But I think you know a lot of that will first be seen in the orders book as those new products come out. Relative to this year in revenue, we don't have any, you know, significant step-ups in price.
Speaker #6: We have price advancement this year I think based on as the tariffs are settling out and we see how the global landscape plays there could be opportunity for more price later this year.
Speaker #6: That'll be something that we'll be taking a look at but I think as we enter the year we don't have any major step-ups in it from a like for like product.
Peter Arduini: That'll be something that we'll be taking a look at, but I think as we enter the year, we don't have any major step-ups in it from a like-for-like product. It is important, and I think you were alluding to this, all of the new products that are coming out, when you think about their category that they're in, will have quite a step up in, in many cases in price. I think our Vivid Pioneer, which has been quite successful, we launched earlier this year, has not only a better cost position, it also has a nice step up in price, hence then translation into better, better gross margin. So more to come, and we're going to keep an eye on the marketplace to make sure that, you know, we appropriately gather the right pricing for the products that we're bringing out.
Peter Arduini: That'll be something that we'll be taking a look at, but I think as we enter the year, we don't have any major step-ups in it from a like-for-like product. It is important, and I think you were alluding to this, all of the new products that are coming out, when you think about their category that they're in, will have quite a step up in, in many cases in price. I think our Vivid Pioneer, which has been quite successful, we launched earlier this year, has not only a better cost position, it also has a nice step up in price, hence then translation into better, better gross margin. So more to come, and we're going to keep an eye on the marketplace to make sure that, you know, we appropriately gather the right pricing for the products that we're bringing out.
Speaker #6: It is important and I think you were alluding to this all of the new products that are coming out when you think about their category that they're in will have quite a step-up in in many cases in price I think our vivid pioneer which has been quite successful we launched earlier this year has not only a better cost position it also has a nice step-up in price hence then translation into better better gross margin.
Here. Um, we don't have any major step-ups in it from a like, for like product. Um, it is important and I think you were alluding to this. All of the new products that are coming out, when you think about their category that they're in, will have quite a step up in, in many cases in price. I think our Vivid Pioneer which has been quite successful. We launched earlier this year, has not only a better cost position. It also has a nice step up in price. Hence, then the translation into better, better gross margins. So more to come and we're going to keep an eye on the marketplace to make sure that, you know, we appropriately, uh, gather the right pricing for the products that we're bringing out. Um, I guess the next question you had was on a Terra J. Maybe you want to kick us off on a telered? Yeah, sure. Maybe I'll share some elements and then Pete, you can add, uh, we're we're very excited about the Intel Rod acquisition. We do expect that to close um, in the first half of the year as planned, um, there's some really nice elements, the combined company advances, our cloud enabled. Um,
Speaker #6: So more to come and we're going to keep an eye on the marketplace to make sure that you know we appropriately gather the right pricing for the products that we're bringing out.
AI Solutions in both radiology. And Cardiology so really. And then also extends our capabilities, um, across the outpatient Network. So we feel we feel really nice about this. And we're on track to close it, um, along the lines of our expectations. As we think about the financial components of the deal.
Speaker #6: I guess the next question you had was on Intellirad. Jay maybe you want to kick us off on Intellirad.
Peter Arduini: I guess the next question you had was on Intelerad. Jay, maybe you want to kick us off on Intelerad.
Peter Arduini: I guess the next question you had was on Intelerad. Jay, maybe you want to kick us off on Intelerad.
Speaker #2: Yeah, sure. Maybe I'll share some elements and then, Pete, you can add. We're very excited about the Intellirad acquisition. We do expect that to close in the first half of the year as planned.
Jay Saccaro: Yeah, sure. Maybe I'll share some elements, and then, Pete, you can add. We're very excited about the Intelerad acquisition. We do expect that to close in the first half of the year as planned. There's some really nice elements. The combined company advances our cloud-enabled AI solutions in both radiology and cardiology. So really, and then also extends our capabilities across the outpatient network. So we feel really nice about this, and we're on track to close it along the lines of our expectations. As we think about the financial components of the deal, we haven't incorporated that in our guidance. What we've said is it would be slightly dilutive, but we expect to offset that with cost efficiency.
Jay Saccaro: Yeah, sure. Maybe I'll share some elements, and then, Pete, you can add. We're very excited about the Intelerad acquisition. We do expect that to close in the first half of the year as planned. There's some really nice elements. The combined company advances our cloud-enabled AI solutions in both radiology and cardiology. So really, and then also extends our capabilities across the outpatient network. So we feel really nice about this, and we're on track to close it along the lines of our expectations. As we think about the financial components of the deal, we haven't incorporated that in our guidance. What we've said is it would be slightly dilutive, but we expect to offset that with cost efficiency.
Speaker #2: There's some really nice elements the combined company advances our cloud-enabled AI solutions in both radiology and cardiology so really and then also extends our capabilities across the outpatient network.
Speaker #2: So we feel we feel really nice about this and we're on track to close it along the lines of our expectations. As we think about the financial components of the deal we have an incorporated that in our guidance.
Speaker #2: What we've said is it would be slightly dilutive but we expect to offset that with cost efficiency. So what will happen when we do ultimately close the transaction is we will see an increase in interest expense an increase in EBITDA attached to the company.
Jay Saccaro: So what will happen, when we do ultimately close the transaction, is we will see an increase in interest expense, an increase in EBITDA attached to the company. There will be a revenue impact, but we'll be able to offset to make it neutral for the remainder of the year. Overall, that's really the, the status on the deal. Pete, anything else you'd like to highlight from strategy?
Jay Saccaro: So what will happen, when we do ultimately close the transaction, is we will see an increase in interest expense, an increase in EBITDA attached to the company. There will be a revenue impact, but we'll be able to offset to make it neutral for the remainder of the year. Overall, that's really the, the status on the deal. Pete, anything else you'd like to highlight from strategy?
Um, we have an incorporated that in our guidance, what we've said is it would be slightly diluted, but we expect to offset, um, that with cost efficiency. So what will happen? Um, when we do ultimately close, the transaction is, we will see an increase in interest expense an increase in EBA attached to the company. Um, there will be a revenue impact, but we'll be able to offset to make it neutral for the remainder of the year. So, um, overall that's really the, the status on the DLP. Any anything else you'd like to highlight from a strategy? I, I think just the standpoint of these are the type of deals that we think make a lot of sense for the company relative to a strategic fit for us. Um, the enablement of, uh, artificial intelligence to be deployed at an Enterprise level, both inpatient and outpatient, we know the future of diagnosis is much more. The integration of multi modalities and how they're read. And so, having a, a critical platform such as this will be
Speaker #2: There will be a revenue impact but we'll be able to offset to make it neutral for the remainder of the year. So overall that's really the the status on the deal.
Speaker #2: Pete any anything else
Speaker #6: Just I think just the standpoint of these are the type of deals that we think make a lot of sense for the company relative to a strategic fit for us.
Peter Arduini: I think just the standpoint of these are the type of deals that we think make a lot of sense for the company, relative to a strategic fit for us. The enablement of artificial intelligence to be deployed at an enterprise level, both inpatient and outpatient. We know the future of diagnosis is much more the integration of multimodalities and how they're read, and so having a critical platform such as this, will be super important for us. And then I just think from a deal complexion standpoint, accretive to top line, accretive to bottom line, fits strategically. These are the type of tuck-in deals that we're obviously looking at, and we're excited to have the Intelerad team a part of the family.
Peter Arduini: I think just the standpoint of these are the type of deals that we think make a lot of sense for the company, relative to a strategic fit for us. The enablement of artificial intelligence to be deployed at an enterprise level, both inpatient and outpatient. We know the future of diagnosis is much more the integration of multimodalities and how they're read, and so having a critical platform such as this, will be super important for us. And then I just think from a deal complexion standpoint, accretive to top line, accretive to bottom line, fits strategically. These are the type of tuck-in deals that we're obviously looking at, and we're excited to have the Intelerad team a part of the family.
super important for us. And then I just think from a deal, complexion standpoint, uh, a creative the Top Line, a creative to bottom line, uh, fit strategically. These are the type of tuck in deals that there were obviously looking at and we're excited to have the until rad team, a part of the family and it's a group of great individuals and we're excited to get this 1 here closed and in the first half.
Speaker #6: The enablement of artificial intelligence to be deployed at an enterprise level both inpatient and outpatient we know the future of diagnosis is much more the integration of multimodalities and how they're read and so having a a a critical platform such as this will be super important for us.
Thank you.
Thank you. Our next question. Coming from the lineup.
Joanne Buss with City Yin is now open.
Speaker #6: And then I just think from a deal complexion standpoint accretive to top line accretive to bottom line fits strategically these are the type of tuck-in deals that that we're obviously looking at and we're excited to have the Intellirad team a part of the family.
Uh, good afternoon, and thanks for taking the question. Um, I'm sort of asking this of everybody early in the season which is, um, can you sort of give a state of the union on, um, medical technology and, and what you're seeing and specifically, if you could share some comments or thoughts on the hospital capex environment and any impacts you may be seeing or expect to see on the changes to the Affordable Care Act. Thank you so much.
Speaker #6: It's a group of great individuals and we're excited to get this one here closed and in the first half.
Peter Arduini: It's a group of great individuals, and we're excited to get this one here closed in the first half.
Peter Arduini: It's a group of great individuals, and we're excited to get this one here closed in the first half.
Speaker #5: Thank
Speaker #5: you. Thank you.
Jay Saccaro: Thank you.
Anthony Petrone: Thank you.
Speaker #7: Now our next question, coming from the line of Joanne Bush with City Yellowness, is now open.
Operator: Thank you. Our next question coming from the line of Joanne Wuensch with Citi. Your line is now open.
Operator: Thank you. Our next question coming from the line of Joanne Wuensch with Citi. Your line is now open.
Speaker #4: Good afternoon and thanks for taking the question. I'm sort of asking this of everybody early in the season which is can you sort of give a state of the union on medical technology and and what you're seeing and specifically if you could share some comments or thoughts on the hospital CapEx environment and any impacts you may be seeing or expect to see on changes to the Affordable Care Act.
Joanne Wuensch: Good afternoon, and thanks for taking the question. I'm sort of asking this of everybody early in the season, which is, can you sort of give a state of the union on, medical technology and, and what you're seeing? And specifically, if you could share some comments or thoughts on the hospital CapEx environment, and any impacts you may be seeing or expect to see on, changes to the Affordable Care Act. Thank you so much.
Joanne Wuensch: Good afternoon, and thanks for taking the question. I'm sort of asking this of everybody early in the season, which is, can you sort of give a state of the union on, medical technology and, and what you're seeing? And specifically, if you could share some comments or thoughts on the hospital CapEx environment, and any impacts you may be seeing or expect to see on, changes to the Affordable Care Act. Thank you so much.
Speaker #4: Thank you so much.
Speaker #2: Great. So so you know the the the capital backdrop in the US is is solid. Every quarter we conduct this study of our top fifty US customers to really get a pulse on investment sentiment.
Jay Saccaro: Great. So you know, the capital backdrop in the US is solid. Every quarter we conduct a study of our top 50 US customers to really get a pulse on investment sentiment. It gives us a reasonable picture of investment plans and priorities, and we found that it's a fairly reliable survey that we conduct. What we found after completing the recent study is the US market continues to be robust, driven by customer investment in an aging installed base. So we're seeing continued momentum on the US CapEx side. Some of that is definitely driven by strong procedure trends that we're seeing. We just finished our latest survey, and many of those customers are anticipating investment increases versus what they previously assessed.
Jay Saccaro: Great. So you know, the capital backdrop in the US is solid. Every quarter we conduct a study of our top 50 US customers to really get a pulse on investment sentiment. It gives us a reasonable picture of investment plans and priorities, and we found that it's a fairly reliable survey that we conduct. What we found after completing the recent study is the US market continues to be robust, driven by customer investment in an aging installed base. So we're seeing continued momentum on the US CapEx side. Some of that is definitely driven by strong procedure trends that we're seeing. We just finished our latest survey, and many of those customers are anticipating investment increases versus what they previously assessed.
Um, so so you know, the the, the capital backdrop in the US is, is solid. Um, every quarter, we conduct this study of our top 50 US, customers to really get a pulse on investment sentiment. Um, it gives us a reasonable picture of investment plans and priorities. Um, and we found that it's a Fairly reliable survey that we conduct what we found after completing. The recent study is the US market continues to be robust driven by customer investment in an aging installed base. So we're seeing continued momentum on the US, capex side. Um, some of that is definitely driven by strong procedure of trends that we're seeing. Um, we we just finished our latest, uh, we we, we just finished our latest, um, survey and many of those customers are anticipating investment increases versus what what they previously. Um, assess
Speaker #2: It gives us a reasonable picture of investment plans and priorities and we found that it's a fairly reliable survey that we conduct. What we found after completing the recent study is the US market continues to be robust driven by customer investment in an aging install base.
Speaker #2: So we're seeing continued momentum on the US CapEx side of some of that is definitely driven by strong procedure trends that we're seeing. We we just finished our latest we we we just finished our latest survey and many of those customers are anticipating investment increases versus what what they previously assessed.
As we go over the ponds, the European Market has continued to improve over the past couple of quarters we've seen orders recover um in many European geographies. So that's another robust market and then Emerging Markets, you know, really solid Trends there. So I think overall the global backdrop is pretty good. I've commented already on China but um I think it's a it's a decent setup as we look into 2026 Pete.
Speaker #2: As we go over the pond, the European market has continued to improve over the past couple of quarters. We've seen orders recover in many European geographies.
Jay Saccaro: As we go over the pond, the European market has continued to improve. Over the past couple of quarters, we've seen orders recover in many European geographies, so that's another robust market. And then emerging markets, you know, really solid trends there. So I think overall, the global backdrop is pretty good. I've commented already on China, but I think it's a decent setup as we look into 2026. Pete?
Jay Saccaro: As we go over the pond, the European market has continued to improve. Over the past couple of quarters, we've seen orders recover in many European geographies, so that's another robust market. And then emerging markets, you know, really solid trends there. So I think overall, the global backdrop is pretty good. I've commented already on China, but I think it's a decent setup as we look into 2026. Pete?
Speaker #2: So that's another robust market and then emerging markets you know really solid trends there. So I think overall the global backdrop is pretty good.
Speaker #2: I've commented already on China, but I think it's a decent setup as we look into 2026. Pete?
Speaker #6: Yeah. Joanne to your question I mean the ACA obviously there's challenges for certain subsets of customers based on which patient mix is or the scenarios but we haven't heard anything that is concerning relative to the capital environment.
Peter Arduini: Yeah, Joanne, to your question, I mean, the ACA, obviously, there's challenges for certain subsets of customers based on which patient mixes or the scenarios, but we haven't heard anything that is concerning relative to the capital environment. I think, Jay, as we survey customers, this is a critical part to it, how that's playing out. So we haven't seen anything that stood out on that. I think you'd mentioned about, you know, technologies in healthcare. I, again, I do think this is one of the interesting dynamics about us and some of our other peer companies that play in this. Many cases, we are the enabler of so many of breakthrough technologies, whether they be device or drug.
Peter Arduini: Yeah, Joanne, to your question, I mean, the ACA, obviously, there's challenges for certain subsets of customers based on which patient mixes or the scenarios, but we haven't heard anything that is concerning relative to the capital environment. I think, Jay, as we survey customers, this is a critical part to it, how that's playing out. So we haven't seen anything that stood out on that. I think you'd mentioned about, you know, technologies in healthcare. I, again, I do think this is one of the interesting dynamics about us and some of our other peer companies that play in this. Many cases, we are the enabler of so many of breakthrough technologies, whether they be device or drug.
Yeah, Joanne to your question. I mean the ACA obviously there's challenges for certain subsets of customers based on what your patient mixes or the scenarios, but we haven't heard anything that is concerning relative to the Capitol environment. I think Jay as weed survey customers. This is a critical part to it, how that's playing out. So we haven't seen anything that stood out on that. I think you'd mentioned about, you know, Technologies and Healthcare. I again, I do think this is 1 of the interesting Dynamics about us, and some of our other peer companies that plan this many cases. We are the enabler of so many of breakthrough, technology, whether they be device or drug. And so, with all of the new EP, with all the new cardio, oncology devices and Drugs. In many cases, we're either the early, screening, or planning tool, or we are ultimately the helping executor of the therapy delivery. You know, in the, in the pharmaceutical space in particular,
Speaker #6: I think, Jay, as we survey customers, this is a critical part to it—how that's playing out. So we haven't seen anything that stood out on that.
Speaker #6: I think you'd mentioned about, you know, technologies and healthcare. I, again, I do think this is one of the interesting dynamics about us and some of our other peer companies that play in this.
We play a bigger role that which is why in many cases you see even as a capital environment might be tighter our equipment typically Rises to the top of the list the priority because it is an enabler for profit growth within the institution. So uh all signs at this point look quite healthy and and we feel good about uh you know, as we enter 2026 for sure.
Speaker #6: Many cases we are the enabler of so many of breakthrough technologies whether it be device or drug and EP with all the new so with all of the new cardio oncology device and drugs in many cases we're either the early screening or planning tool or we are ultimately the helping executor of the therapy delivery.
Terrific, thank you so much.
Thank you.
Peter Arduini: And so with all of the new EP, with all the new cardio, oncology device and drugs, in many cases, we're either the early screening or planning tool, or we are ultimately the helping executor of the therapy delivery. You know, in the pharmaceutical space, in particular, we play a bigger role in that. Which is why, in many cases, you see, even as a capital environment might be tighter, our equipment typically rises to the top of the list of priority, because it is an enabler for profit growth within the institution. So, all signs at this point look quite healthy, and we feel good about, you know, as we enter 2026, for sure.
Peter Arduini: And so with all of the new EP, with all the new cardio, oncology device and drugs, in many cases, we're either the early screening or planning tool, or we are ultimately the helping executor of the therapy delivery. You know, in the pharmaceutical space, in particular, we play a bigger role in that. Which is why, in many cases, you see, even as a capital environment might be tighter, our equipment typically rises to the top of the list of priority, because it is an enabler for profit growth within the institution. So, all signs at this point look quite healthy, and we feel good about, you know, as we enter 2026, for sure.
Our next question, coming from the line of David Roman with Goldman Sachs
Speaker #6: You know in the in the pharmaceutical space in particular we play a bigger role that which is why in many cases you see even as a capital environment might be tighter our equipment typically rises to the top of the list of priority because it is an enabler for profit growth within the institution.
Speaker #6: So, all signs at this point look quite healthy, and we feel good about, you know, as we enter 2026 for sure.
Uh, thank you. Good morning everyone. Uh, hey, PJ Caroline. Um, maybe I'll just start with, uh, just trying to put some of the pieces together and Pete's comments around the order growth in Q4, potentially being impacted by the timing of new product announcements. But then why that wouldn't impact performance in 2026, but another way to do freeze, the market in anticipation of some of these new product launches and then I have 1 follow-up on China,
Speaker #4: Terrific. Thank you so
Speaker #4: much.
Joanne Wuensch: Terrific. Thank you so much.
Joanne Wuensch: Terrific. Thank you so much.
Speaker #7: Thank you. Thank
Operator: Thank you.
Peter Arduini: Thank you.
Jay Saccaro: Thank you.
Jay Saccaro: Thank you.
Speaker #7: Our next question you. coming from the line of David Roman with Goldman Sachs Yellowness now
Operator: Our next question, coming from the line of David Roman with Goldman Sachs. Your line is now open.
Operator: Our next question, coming from the line of David Roman with Goldman Sachs. Your line is now open.
Speaker #7: open. Thank you.
Speaker #5: Good morning, everyone. Hey Pete and Jay, hey Carolynne. Maybe I'll just start with trying to put some of the pieces together in Pete's comments around the order growth in Q4 potentially being impacted by the timing of new product announcements, but then why that wouldn't impact performance in 2026. But another way—do you freeze the market in anticipation of some of these new product launches? And then I have one follow-up on that.
David Roman: Thank you. Good morning, everyone.
David Roman: Thank you. Good morning, everyone.
Jay Saccaro: Good morning.
Jay Saccaro: Good morning.
David Roman: Hey, Pete, hey, Jay, and Carolyn. Maybe I'll just start with just trying to put some of the pieces together in Pete's comments around the order growth in Q4 potentially being impacted by the timing of new product announcements, but then why that wouldn't impact performance in 2026? Or another way, do you freeze the market in anticipation of some of these new product launches? And then I have one follow-up on China.
David Roman: Hey, Pete, hey, Jay, and Carolynne. Maybe I'll just start with just trying to put some of the pieces together in Pete's comments around the order growth in Q4 potentially being impacted by the timing of new product announcements, but then why that wouldn't impact performance in 2026? Or another way, do you freeze the market in anticipation of some of these new product launches? And then I have one follow-up on China.
Speaker #5: China. Yeah.
Speaker #6: David it's it's less about do you freeze the market but I mean to the point when you introduce a bunch of new products particularly in a premium area for us many of those products you know particularly just take photon counting we haven't had a predicate product.
Yeah, David. It's it's less about, do you freeze the market? But I, I mean to the point when you introduce a bunch of new products particularly in a premium area for us, many of those products, you know, particularly just take Photon Downing, we haven't had a predicate product. Uh so yes, there are some higher-end premium ones of customers that may say, hey I may wait till it's available but a vast majority of those are new ones, but we don't see the order coming to the order book until it's, you know, approved. Um, so so, I mean that's some of the basic Dynamics and I think, you know, Jay talked about trailing 12 months and the and the and the stack compare those are interesting ways to take a look at it because, you know, we could have multiple quarters where we're significantly higher and then we could have multiple quarters where we're below but
Peter Arduini: Yeah, David, it's less about do you freeze the market, but I mean, to the point, when you introduce a bunch of new products, particularly in a premium area, for us, many of those products, you know, particularly just take photon counting, we haven't had a predicate product. So yes, there are some higher end premium ones of customers that may say, "Hey, I may wait till it's available," but a vast majority of those are new ones. But we don't see the order come into the order book until it's, you know, approved. So I mean, that's some of the basic dynamics, and I think, you know, Jay talked about trailing twelve months and the stack compare.
Peter Arduini: Yeah, David, it's less about do you freeze the market, but I mean, to the point, when you introduce a bunch of new products, particularly in a premium area, for us, many of those products, you know, particularly just take photon counting, we haven't had a predicate product. So yes, there are some higher end premium ones of customers that may say, "Hey, I may wait till it's available," but a vast majority of those are new ones. But we don't see the order come into the order book until it's, you know, approved. So I mean, that's some of the basic dynamics, and I think, you know, Jay talked about trailing twelve months and the stack compare.
Speaker #6: So yes there are some higher-end premium ones if customers that may say hey I may wait till it's available but a vast majority of those are new ones but we don't see the order come into the order book until it's you know approved.
What's really important is that backlog growth and then how the sales come out. And again, I think, you know, that that's an important part of this, and you saw the sales performance, particularly in imaging, and some of the other businesses in the fourth quarter, a lot of that is actually the work that the teams have done relative to uh on-time delivery and executing that more effectively.
Speaker #6: So so I mean that's some of the basic dynamics and I think you know Jay talked about trailing twelve months and the and the and the and the stack compare those are interesting ways to take a look at it because you know we could have multiple quarters where we're significantly higher and then we could have multiple quarters where we're below but what's really important is that backlog growth and then how the sales come out.
Peter Arduini: Those are interesting ways to take a look at it, because, you know, we could have multiple quarters where we're significantly higher, and then we could have multiple quarters where we're below. But what's really important is that backlog growth and then how the sales come out. And again, I think, you know, that's an important part of this, and when you saw the sales performance, particularly in imaging and some of the other businesses in Q4, a lot of that is actually the work that the teams have done relative to on-time delivery and executing that more effectively.
Peter Arduini: Those are interesting ways to take a look at it, because, you know, we could have multiple quarters where we're significantly higher, and then we could have multiple quarters where we're below. But what's really important is that backlog growth and then how the sales come out. And again, I think, you know, that's an important part of this, and when you saw the sales performance, particularly in imaging and some of the other businesses in Q4, a lot of that is actually the work that the teams have done relative to on-time delivery and executing that more effectively.
So, uh, I was thinking about Omni, what, what are you seeing thus far? Uh, from a competitive standpoint, um, on the ground and what's been a reflected in your guidance here?
Speaker #6: know that that's an important part of this and And again I think you we you saw the sales performance particularly in imaging and some of the other businesses in the fourth quarter a lot of that is actually the work that the teams have done relative to on-time delivery and executing that more effectively.
Yeah, no. I I I would tell them that Jay, you can jump in. I think, you know, this email some of our other molecules as well continue to do along. I think you're, you're correct based on my comments, look forcado.
Speaker #5: Okay. Very helpful and maybe I'll I'll I'll switch gears from China China and actually ask ask on Omnipaque and and just the PDX business you know we did see an acceleration in that franchise in twenty twenty in the fourth quarter excuse me it doesn't look like first thought I was probably big enough to be the contributor there.
David Roman: Okay, very helpful. And maybe I'll switch gears from China and actually ask on Omnipaque and just the PDX business. You know, we did see an acceleration in that franchise in 2020 in Q4, excuse me. It doesn't look like Flyrcado was probably big enough to be the contributor there. So, how should we think about Omnipaque? What are you seeing thus far from a competitive standpoint on the ground, and what's kind of reflected in your guidance here?
David Roman: Okay, very helpful. And maybe I'll switch gears from China and actually ask on Omnipaque and just the PDX business. You know, we did see an acceleration in that franchise in 2020 in Q4, excuse me. It doesn't look like Flyrcado was probably big enough to be the contributor there. So, how should we think about Omnipaque? What are you seeing thus far from a competitive standpoint on the ground, and what's kind of reflected in your guidance here?
Speaker #5: So how should we think about Omnipaque what what are you seeing thus far from a competitive standpoint on the ground and what's kind of reflected in your guidance here?
Speaker #2: Yeah. No. I—I would come in, and Jay, maybe you can jump in. I think you know, Visimal and some of our other molecules as well continue to do along.
Peter Arduini: Yeah, no, I would comment, and then Jay, maybe you can jump in. I think, you know, Vizamyl, some of our other molecules as well, continue to do well. I think you're correct, based on my comments with Flyrcado, not a significant contributor from that standpoint. That's where we are. Obviously, now that we have higher CMO capabilities, that will continue to grow. But the largest part of that business is the contrast media business. You know, we have large customers that have many, many SKU contracts with us. You know, there has been rumor discussion of new entrants coming in the area. Haven't seen anything developing at this point in time. Supply is rather tight within the industry, just based on the players that exist, and so it's been a pretty consistent play, and usually is highly correlated to procedures growth.
Peter Arduini: Yeah, no, I would comment, and then Jay, maybe you can jump in. I think, you know, Vizamyl, some of our other molecules as well, continue to do well. I think you're correct, based on my comments with Flyrcado, not a significant contributor from that standpoint. That's where we are. Obviously, now that we have higher CMO capabilities, that will continue to grow. But the largest part of that business is the contrast media business. You know, we have large customers that have many, many SKU contracts with us. You know, there has been rumor discussion of new entrants coming in the area. Haven't seen anything developing at this point in time. Supply is rather tight within the industry, just based on the players that exist, and so it's been a pretty consistent play, and usually is highly correlated to procedures growth.
Speaker #2: I think your you're correct based on my comments what Ferkado not a a significant contributor from that standpoint this where we are obviously now that we have higher CMO capabilities that will continue to grow.
Not a a significant contributor from that standpoint. This is where we are. Obviously now that we have higher CMO capabilities that it will continue to grow, but the largest part of that business is the contrast media business. Um, you know, we have large customers that have many, many skew contracts with us. You know, there has been rumored discussion of new entrance coming in the area, haven't seen anything developing at this point in time supplies, rather tight within the industry, um, just based on the players that exists. And so it's been a pretty consistent play and usually is highly correlated to procedures growth. And we've seen a pretty healthy procedures growth, uh, coming from again many other types of, uh,
Uh procedures and Cardiology and card and and and and oncology continuing to exist. So solid Trends across the board there.
Speaker #2: But the largest part of that business is the contrast media business. You know, we have large customers that have many, many SKU contracts with us.
Thank you. And our last questioner will come from the line of Vijay Kumar with avicar sale and is now open.
Speaker #2: You know, there has been rumor discussion of new entrants coming in the area. Haven't seen anything developing at this point in time. Supplies are rather tight within the industry just based on the players that exist, and so it's been a pretty consistent play.
Speaker #2: And usually is highly correlated to procedures growth, and we've seen a pretty healthy procedures growth coming from, again, many other types of procedures in cardiology and cardi— and oncology continuing to exist.
Hey guys, thanks for taking my question. Uh, my first question is on on uh, guidance here. Uh, J. What is uh, fiscal 26 museum for floor KO and you I know you mentioned China. Declines with China Q4 was, I think downtown? So, uh, maybe some some, some
Uh, noise around there on on what is going on in China?
Peter Arduini: We've seen a pretty healthy procedures growth, coming from, again, many other types of procedures in cardiology and oncology continuing to exist. Solid trends across the board there.
Peter Arduini: We've seen a pretty healthy procedures growth, coming from, again, many other types of procedures in cardiology and oncology continuing to exist. Solid trends across the board there.
Speaker #2: So, solid trends across the board.
Speaker #2: there. Thank
Speaker #7: you. And our last questioner will come from the line of Vijay Kumar with Evercore SI Yellowness now open.
Operator: Thank you. And our last questioner will come from the line of Vijay Kumar with Evercore ISI. Your line is now open.
Operator: Thank you. And our last questioner will come from the line of Vijay Kumar with Evercore ISI. Your line is now open.
Speaker #8: question. My first question is on Hey guys. Thanks for taking my on guidance here. Jay what is fiscal twenty-six assuming for Ferkado and you I know you mentioned China declines with China Q4 was I think down teens so maybe some some noise around there on on what is going on in China?
Vijay Kumar: Hey, guys, thanks for taking my question. My first question is on guidance here. Jay, what is fiscal 2026 assuming for Flyrcado? And you, I know you mentioned China declines, with China Q4 was, I think, down teen, so, maybe some noise around there on what is going on in China?
Vijay Kumar: Hey, guys, thanks for taking my question. My first question is on guidance here. Jay, what is fiscal 2026 assuming for Flyrcado? And you, I know you mentioned China declines, with China Q4 was, I think, down teen, so, maybe some noise around there on what is going on in China?
Speaker #3: Yeah, so on the China story, we're anticipating—so what I would say is the fourth quarter came in, broadly speaking, in line with our expectations.
Jay Saccaro: Yeah. So, on the China story, we're anticipating. So what I would say is the fourth quarter came in, broadly speaking, in line with our expectations. We knew if you look at the growth, the comparisons to prior year, we knew the fourth quarter was the most difficult comparison year-over-year. So we did anticipate a bit of a deterioration, which was embedded when we said the second half was gonna be worse than the first half. And so, you know, to Pete's comments earlier, you know, we're making some good commercial progress in China, but we're just gonna take a cautious approach here. We're budgeting China down. I'm not gonna get into specifics as to precise amounts down. We're budgeting China down. That's included in our 3% to 4%.
Jay Saccaro: Yeah. So, on the China story, we're anticipating. So what I would say is the fourth quarter came in, broadly speaking, in line with our expectations. We knew if you look at the growth, the comparisons to prior year, we knew the fourth quarter was the most difficult comparison year-over-year. So we did anticipate a bit of a deterioration, which was embedded when we said the second half was gonna be worse than the first half. And so, you know, to Pete's comments earlier, you know, we're making some good commercial progress in China, but we're just gonna take a cautious approach here. We're budgeting China down. I'm not gonna get into specifics as to precise amounts down. We're budgeting China down. That's included in our 3% to 4%.
Yeah. So uh, so on the China story um we're we're anticipating. So what what I would say is the fourth quarter came in broadly speaking in line with our expectations, uh, we knew if you look at the the growth, the comparisons to Prior year, we knew the fourth quarter was the most difficult comparison year-over-year. So we did anticipate um, a bit of a deterioration, which was embedded when we said the second half was going to be worse than the first half. And so, you know, to Pete's comments earlier, you know, we're making some good commercial progress in China, but we're we're just going to take a cautious approach here, we're budgeting China down. Um, I'm not going to get into specifics as to precise amounts down. We're budgeting China down that's included in our 3 to 4% um and and maybe there's a scenario we do better than that but we really wanted to take a cautious.
Speaker #3: We knew if you look at the the growth the comparison to prior year we knew the fourth quarter was the most difficult comparison year over year.
Speaker #3: So we did anticipate a bit of a deterioration, which was embedded when we said the second half was going to be worse than the first half.
Speaker #3: And so you know to Pete's comments earlier you know we're making some good commercial progress in China but we're we're just going to take a cautious approach here.
Speaker #3: We're budgeting China down. I'm not going to get into specifics as to precise amounts down. We're budgeting China down. That's included in our three to four percent.
Speaker #3: And and maybe there's a scenario we do better than that. But we really wanted to take a cautious approach on China. As it relates to Ferkado you know we we shared the dose number in terms of what we what we what we performed in a week in January.
Jay Saccaro: And maybe there's a scenario we do better than that, but we really wanted to take a cautious approach on China. As it relates to Flyrcado, you know, we shared the dose number in terms of what we performed in a week in January. I had previously said that was really a critical metric for us. How are we doing at that point? Now we have confidence, and we've started to open up the throttle in terms of bringing on new customers and advancing those customers to higher states of maturity. So we're really excited about the product. We expect weekly dose numbers to grow.
Jay Saccaro: And maybe there's a scenario we do better than that, but we really wanted to take a cautious approach on China. As it relates to Flyrcado, you know, we shared the dose number in terms of what we performed in a week in January. I had previously said that was really a critical metric for us. How are we doing at that point? Now we have confidence, and we've started to open up the throttle in terms of bringing on new customers and advancing those customers to higher states of maturity. So we're really excited about the product. We expect weekly dose numbers to grow.
Speaker #3: I had previously said that was really a critical metric for us. How are we doing at that point? Now we have confidence, and we've started to open up the throttle in terms of bringing on new customers and advancing those customers to higher states of maturity.
Approach on China. Um, as it relates to forcado, you know, we we shared the dose number in terms of what we what we what we uh, performed in a week in January. Um, I had previously said that was really a critical metric for us. How are we doing at that point? Now we have confidence and we've started to open up the throttle in terms of bringing on new customers and advancing those customers to higher states of maturity. So we're really excited about the product, we expect weekly dose numbers to grow, um, in the first year of launch, will periodically share information on doses? But but again, given the number of products, we have launching in the near term. We're not going to give guidance, but on any specific product at this point, um, but we will share some information to help you model this over time. Um, I can tell you, you know, based on the progress that we've made over the last couple of months, you know, very pleased with the direction that we're going. Very pleased with the progress that our team is making.
Speaker #3: So we're really excited about the product. We expect weekly dose numbers to grow. In the first year of launch we'll periodically share information on doses but but again given the number of products we have launching in the near term we're not going to give guidance on any specific product at this point.
That's helpful. Yeah, and then maybe at 1 not clarification on the, uh, my, my, my, my math looks at the backlog, grew 10% in fiscal 26. And your capital in the Q4 was, uh, something north of 1.1. Uh, is my math, correct?
Jay Saccaro: In the first year of launch, we'll periodically share information on doses, but again, given the number of products we have launching in the near term, we're not gonna give guidance by on any specific product at this point, but we will share some information to help you model this over time. I can tell you, you know, based on the progress that we've made over the last couple of months, you know, very pleased with the direction that we're going, very pleased with the progress that our team is making.
Jay Saccaro: In the first year of launch, we'll periodically share information on doses, but again, given the number of products we have launching in the near term, we're not gonna give guidance by on any specific product at this point, but we will share some information to help you model this over time. I can tell you, you know, based on the progress that we've made over the last couple of months, you know, very pleased with the direction that we're going, very pleased with the progress that our team is making.
Speaker #3: But we will share some information to help you model this over time. I can tell you, you know, based on the progress that we've made over the last couple of months, you know, we're very pleased with the direction that we're going.
We share a book to Bill that includes all the elements that we include with both service and Pediatrics. So we don't comment but you know I think I think you've done some good math and then on the backlog you have backlog was up very substantially in the fourth quarter. Um really really pleased with the the growth there and how that sets us up for The multi-year View
Understood. Thank you, guys.
Speaker #3: Very pleased with the progress that our team is
Speaker #3: making. That's helpful,
Thank you. And that concludes our question and answer session, speakers, please press.
Speaker #8: Jay. And then maybe one clarification on my by my math looks like backlog grew ten percent in fiscal twenty-six and your capital book in Q4 was something north of one point one is my math correct?
Any closing remarks.
Vijay Kumar: That's helpful, Jay. And then maybe one clarification on my math looks like backlog grew 10% in fiscal 2026, and your capital book-to-bill in the Q4 was something north of 1.1. Is my math correct?
Vijay Kumar: That's helpful, Jay. And then maybe one clarification on my math looks like backlog grew 10% in fiscal 2026, and your capital book-to-bill in the Q4 was something north of 1.1. Is my math correct?
And thank you all for joining us today. We look forward to connecting with you all here in the coming weeks, at 1 of our 101s or upcoming conferences. Thanks again.
Ladies and gentlemen.
Speaker #3: Vijay we don't we share a book to build that includes all the elements that we include with both service and think you've done some good math.
Jay Saccaro: Vijay, we don't share a book-to-bill that includes all the elements that we include, both service and PDX. So we don't comment, but, you know, I think you've done some good math. Then on the backlog, yeah, backlog was up very substantially in Q4. Really pleased with the growth there and how that sets us up for the multiyear view.
Jay Saccaro: Vijay, we don't share a book-to-bill that includes all the elements that we include, both service and PDX. So we don't comment, but, you know, I think you've done some good math. Then on the backlog, yeah, backlog was up very substantially in Q4. Really pleased with the growth there and how that sets us up for the multiyear view.
thank you for your participation and you may now disconnect
Speaker #3: And then on the PDX. So we don't comment but you know I think I backlog yeah backlog was up very substantially in the fourth quarter.
Speaker #3: Really, really pleased with the growth there and how that sets us up for the multi-year.
Speaker #3: view. Understood.
Speaker #8: Thank you guys.
Vijay Kumar: Understood. Thank you, guys.
Vijay Kumar: Understood. Thank you, guys.
Speaker #7: Thank you. And that concludes our question and answer session. Speakers please proceed with any closing
Operator: Thank you. That concludes our question and answer session. Speakers, please proceed with any closing remarks.
Operator: Thank you. That concludes our question and answer session. Speakers, please proceed with any closing remarks.
Speaker #7: remarks. Thank you all for
Speaker #2: joining us today. We look forward to connecting
Peter Arduini: Yeah, thank you all for joining us today. We look forward to connecting with you all here in the coming weeks at one of our one-on-ones or upcoming conferences. Thanks again.
Peter Arduini: Yeah, thank you all for joining us today. We look forward to connecting with you all here in the coming weeks at one of our one-on-ones or upcoming conferences. Thanks again.
Speaker #1: with you all here in the coming weeks at one of our one-on-ones or upcoming conferences. Thanks again.
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.
