GE HealthCare (GEHC) 25 Jul 232023 Q2 Earnings call transcript

Good day, ladies and gentlemen. Welcome to the GE HealthCare Second Quarter 2023 Earnings Conference Call. My name is Olivia and I’ll be your conference coordinator today.

As a reminder, this conference is being recorded.

I would now like to turn the program over to your host for today’s conference, Carolynne Borders, Chief Investor Relations Officer. proceed. Please

Jay to our quarter Arduini; President Vice and Welcome I’m earnings and HealthCare’s President by joined and CFO, GE Olivia. XXXX second call. our Thanks, Saccaro. CEO, Peter

include on Our conference Reconciliations GAAP our in today’s website. non-GAAP and the GAAP in non-GAAP can found release financial between be both measures press call results. and presentation will remarks and slides available

These call, During see forward-looking statements performance. are make our we based we’ll this things about today. how on statements

may results actual materially filings, SEC our in described risks to uncertainties. differ and As due

that, over With to I’ll Peter. hand the call

Carolynne. Thanks,

First, meeting let immerse HealthCare. to for call our with hit me Since welcome first GE running been us ground himself Jay global teams. in he’s who’s with month, the his joining our he business last arrived has earnings and

more Jay hear from shortly. You’ll

look we to at orders growth. organic year-over-year We first global for NPIs growth continued for with X% to delivering pleased the second up in and by demand in demand results from We revenue performance strong quarter. see improve our the quarter, X% strong bring second sequentially, the delivered our that Now customers. quarter. were X% also This the driven was let’s value

health improve rest we’re address need of which to Volume care the are in investment procedures We’re encouraged In improve U.S., solid constraints. world, productivity well increased imaging, equipment. the and the behaviors demand capacity remains in enhance more to the in products to as customers In and for buying services hospitals investing with associated productivity competitiveness. continued overall by for in demand seeing labor patient and as strong globally drives for providers’ procedures, productivity. care surgical and surgical

we variable a was discipline priorities, basis EBIT productivity. good which second on in on adjusted continue spending margin, slightly XX% cost areas management improvement the basis as EBIT margins down This with were R&D standalone an progress such Adjusted lean as XX We’ve operating including a quarter. the of business, QX. in resulted XX.X% as and year-over-year rigor up in to in a capability points from made year-over-year invest increased our utilizing

where counting, MR optimized next-gen include interventional intelligence we’ve areas cardiology. Some and invested photon artificial

all developing devices ecosystems interoperable machine and learning applications. also build capabilities across further modalities to We’re of

investments value of our the We expect our for advancement while groundwork laying deliver care. to customers the precision for

Turning to allocation. capital

with near-term We’re initiating strategy the the value opportunities, a goal inorganic investing creating over shareholders. acting focused This for on a on and the dividend. pursuing of organically, includes right balanced deleveraging

With full of in markets improving deliver our confidence on the to globally and XXXX, half strong execution we first ability have the in year.

As a and by result, in percentage our we’re point growth year $X.XX for full range at the X midpoint. revenue EPS raising adjusted guidance organic

you our financials. Jay will through now Jay? take

Thanks, Pete.

an the across company. to HealthCare our shareholders. team and such Let ultimately of culture me to globe. and and I’m will innovation being our collaborative growth which deliver looking start to that drive this by exciting to at part value In and goals, I’m be here been thrilled helping customers the I’ve collaboration impressed time really at for particular, the GE saying with our forward

performance. Turning financial to our

XXXX, product strong the increased growth. grew billion was revenues For quarter of X% driven organically. second year-over-year of This by X% and $X.X

future important times to include in were versus to going we information mentioned, growth. the We’ve provides times Pete As improved X% organic of up X.XX year-over-year. believe demand X.XX as Book-to-bill regarding orders quarter decided it forward first this our XXXX. metric and

backlog billion. to be at Our total healthy $XX.X continues

XX EBIT basis adjusted standalone with margin on delivery improved basis, second points quarter price, progress sequentially, and productivity. a On

commercial year-over-year investments. However, it inflation was and down and XX basis to due points R&D

not was by productivity XXX supply also constraints. Note when basis driven year given mix XXXX. of comparator and we standalone were services versus delivered The an second that EBIT in margin this benefits was It products, as planned year-over-year versus margin and did higher-margin included result the points XXXX, benefits price, XX%. decline EBIT a by investments. inflation of primarily impacted in Adjusted volume we offset have adjusted last costs decreased with challenging XX.X% quarter that increased of by sales

Adjusted our I’ll EPS XX% interest due flow was basis, greater standalone down prior up shortly. strong pension interest to our associated year on was $X.XX, and detail Free a incremental but in discuss due XX% top the in cash year-over-year spin, year-over-year driven line which growth payments down versus with to by quarter, expense.

a XX% to performance. Moving Service X% basis, which revenue driven X% a grew foreign increased growth. revenue product strong grew On reported revenues by We demand. X%, by year-over-year. was revenue year-over-year, organically headwind exchange. of to impacted FX was procedural

our expect in growth continues where to the as lag revenue care to quarter growth in posted We prioritize was third momentum as expect do service coming sales. service China, All to China growth, quarters growth product regions the sales access. to continue we product new translate including improved strong And continued double health digits. contracts in in

move Let’s quarter. for performance margin to the

margin expansion in While and innovation, we operational basis remain standalone through EBIT future was we a initiatives focused progress on with slightly on separation. as on invest our year-over-year down driving margin

the During the all segments. quarter, price increased and volume quarter segments We with regions. growth had all positive second in for sales in

as with new made sea. main productivity shifting and initiatives, product from progress logistics We air the of result higher introductions We’ve AI-powered at on to our improving margins. outperformer a delivery being lean rates from also benefited

our efforts a buys. future saw also in decrease into spot savings. us productivity cost Enhancing visibility gives We

In reducing products. making progress our we’re real SKU on higher-margin count our focus to simplify addition, portfolio and

much very XXX date. to approximately planned On exited the separation with with we’re exits TSAs, on track of side,

and focused real IT to functional in-house. IT estate towards other performed and by For we’re progressing activities we certain we’re costs reducing our G&A services previously applications our outsourcing a rationalize and our footprint, the to expenses. optimizing fit-for-purpose Across organization, continue instance, model on

we the these changes of expect and in said, being beyond. That benefit of many XXXX

in recurring These are margin of allocated of margin pleased generally and of $XXX standalone revenue going points first incurring for on to basis we’ve million expand based approximately XXX actions. roughly sight of costs that and focused Overall, our through EBIT impacting to progress a line the made half now the public segment. have XXXX annually headwind costs forward As rates. margins each equate we’re are company, we our segment we’re with

let’s discuss our segments. Now

Turning line and chain demand first quarters, positively the to new and few Imaging. demand We saw impact CT in molecular strong up improvements, revenue driven results. pricing growth, by supply Overall, year-over-year, stable from growth. initiatives supporting top is past We revenues products also healthy, imaging saw imaging X% MR. fulfillment

productivity, price, though basis offset made and inflation it We XXX and declined year-over-year. year more from than progress investments. was margin EBIT Segment points on year by purchases versus prior last volume planned

a improved margins points Importantly, basis on XXX basis. sequential

several driven efficiency year-over-year and X% significantly health. Turning generated organic This to quarter by growth, launches driving high Ultrasound. women’s capabilities and included fulfillment. aimed Revenue and second patient with reflecting quarters growth revenue outcomes. strong revenue new AI cardiovascular the of product We was growth backlog of improved following in at

XX.X% capabilities investment probe introductions Segment XXX and technology, price to down primarily products more EBIT our of digital Ultrasound and new basis such offset performance in due year-over-year, points more reflects as product planned margin inflation. ramp advanced was surgical margin navigation. than with ultrasound-guided investments. Productivity

our that detection using capture intelligence resources an with commercial Caption early applications inorganic We’ve Health, and leader We also ultrasound. rate. added increased investment care health organization in disease visibility artificial clinical creates to have for in aid

We expanding localization. continue and our globally to visibility increasing market on focus leadership position, China

excited business about market. this growth technologies the deliver We’re in differentiating innovate and opportunities we as the to

chain. and by was Organic Patient launches our X% Care to backlog price was more Revenue by to fulfill and driven improved driven Solutions. robust. up volume. supply new revenue backlog an remains year-over-year, also were able Moving We product with

the decreased compared productivity margins investments, driven and and which offset basis growth. PCS last year, inflation planned quarter by by XX volume to points second price,

in the We’re investing particular, volume products digital expect a quarters, the we’re new we to about which excited And will PCS. next contribute future few in growth. monitoring in launching across

were diagnostics, second year, following and in to the procedures, fourth the XX% restrictions plant in growth COVID in last supply. strong which China. shutdown quarter. And revenue third see secure quarter Top last price of line driven year. COVID-related Moving elective organic continued by was the pharmaceutical supported to recovery of revenue China year-over-year, the this up Recall more of lifted volume media we year, that of quarter recovery in purchasing of the were customers last quarter contrast global

XX% nearly of margin year-over-year, driven actions, productivity XXX EBIT basis pricing by volume. improved Segment points and

and costs planned the In investments. were partially inflation year addition, by in shutdown. was This ago offset plant there material raw to one-time due quarter

flow Next, performance. through cash our I’ll walk

The second not million which $XXX and interest spin-related in net payments, million post-retirement by standalone quarter was incremental were actuals. payments items, benefit $XX of of XXXX including our impacted

year-over-year. would post the have an items, for spin-related increase and these flow Excluding second been cash quarter positive free

will XQ year. expect we quarter lowest flow result, our a the cash As be of

better year-over-year, Working capital by improved driven management. inventory

noted, relative to we substantially expect well year earlier previously year. flow in in the due and of half higher cash payments to seasonality certain the timing the as first the supplier we’ve as higher half volume the compensation and that free occur of As second

to turn our now Let’s outlook.

X%, XXXX As range organic X% revenue for Pete in revenue of an X% our we’re We and prior EPS. to adjusted the raising XXXX to said, range X%. organic from now year guidance of for full growth growth increase the expect

point foreign is view year. current percentage the than X headwinds for less of Our exchange

in growth mid-single line digits. We in medium-term expect to growth of half revenue be the second with target our

be to represents the standalone to basis We of over in This XX.X%. XXXX expansion a XX% full EBIT EBIT points range XX margin margin. an adjusted expect to of to XXX continue year adjusted

growth. invest margin We in remain while driving and to on focused to long-term continuing innovate business the drive expansion

increase the adjusted first relative half. the We the in an expect half EBIT in year to to of see margin second

we contribution and product from As the we higher new with benefits volume, productivity introductions. also drive experience

expect will we the of EBIT similar In line while the with be to quarter be highest year XQ seasonality, fourth adjusted to the margin XQ.

outlook of to compares raising to versus range of to XXXX This also EPS adjusted our to X% EPS $X.XX. $X.XX. XX% of to XXXX full adjusted are representing a $X.XX standalone $X.XX, range growth our We previous year $X.XX

cash be cash flow half. We with more conversion second the XX% flow in full generation or to for continue to the expect year, stronger free free

to flow requiring for free cash cash for outlook that cash is The represent flow of free capitalization points flow conversion up Our repealed of R&D tax beyond percentage XX legislation year. deferred XXXX. purposes legislation the this or would impact assumes

call I’ll Pete. back hand the Now to

Thanks, Jay.

on exciting is HealthCare a to Q&A, I on customer and few Before touch areas to patient focused GE that to needs. want address turning

on intelligence Precision detectability. DL quarter, Sonic and Precision learning In Imaging two we lesion times announced technologies, available PET/CT faster smaller deep DL. scan DL this artificial and Legend is our Omni and enables

for accessible capabilities than heartbeat, single a conventional it platform patients. and breath MRI images up patient Sonic AIR our cardiac for times MR DL XX the imaging methods. reduces from to holds DL repetitive making with high-quality enabling more acquires leverages Recon faster MR By need

world’s probe, In Ultrasound, probe transesophageal designed the pediatric access mini an to adult ultrasound. leadership cardiology. for and provides XD tolerate adult This It’s could echocardiogram investment XD for most we position probe. than and introduced an compact first imaging our real-time children not of innovative it who probe is example smaller and technology an in size XX%

We expand continue commercial new in point-of-care markets to ultrasound. and such and handheld adjacent further into invest and capabilities as

in with of on solutions while we’re to growth. newest of the build spot Portrait unmonitored investing first paradigm enables continuously years for freeing create bed for by the introductions new periodic monitor Mobile gives recent monitoring to decline. checks monitoring, Portrait as These installed patient introduction addition continuous shifting The teams come care well to PCS, platform In are the signs on to our in a major being the critical CARESCAPE and base in and upgrades patients. years for us acute monitoring from opportunity Canvas as platform. patient care Mobile an the monitoring for the from and

disease The lesions of announced the estrogen National FDA-approved one FES imaging the positive and breast in U.S. for only or PDx, benefit the it patients. PET of Network view first estrogen to provides Cerianna reoccurring whole-body assess exam. agent of Cancer that clinicians now metastatic positive help Cerianna receptor imaging guidelines, is a cancer. for In we use agent recommend Comprehensive receptor is

the addition increase NCCN will that encouraged this adoption. to of guidelines We’re Cerianna the

other recent Turning diagnosed millions and pipeline to all advancements therapies. patients and disease high-quality early. models if in potential life, in recent molecules quality you promising of to heard – have about the news the treated the of Many of that about provide Alzheimer’s FDA’s of approval lecanemab

the option treat only now, was symptoms. fundamentally to the Before

there’s a solutions, and As these new therapies which digital available, become widely well precise more noninvasive and for to we’re positioned deliver need imaging on.

through you walk GE me the Let for opportunities HealthCare.

disease digital with Vizamyl, Our amyloid be PET including state and customers. us technology, a and to combined MR solution provider our solutions, our imaging scanners enables agent, for

and we example upfront smart the about drugs, care and follow-up. solutions devices about opportunities digital for to is therapies in This you create of diagnosis, monitoring on As our market care. is which refer pathways to disease breakthrough we new approach us how see that can page, role state-focused safety evolving these DX, and and and will as a think a provide good precision often

the it’s will opportunities early journey, this therapy HealthCare, the in partner and GE about very patients still benefit optimistic While growth the we Alzheimer’s generate to providers. remain for as a for

In summary, had on growth. globe to many team for members across initial and company up long-term we’ve an their launch us sustainable our our XX,XXX-plus the I’d accomplishments dedication of have phase as since contributions set and thank growth. independent for like they our

supporting with visibility updated the first in half, with into for year. outlook pleased full the I’m second delivered results our the half, our we’ve strong

continued products market solid our demand services. seeing We’re for and

We’re spend provides while actions. innovation, through areas to of margin allocating into and line backlog also our ‘XX ‘XX. high-growth healthy improvement R&D long-term drive sight driving good our And into

And with open we’ll up the for questions. call that,

Peter. one Olivia, follow-up. Thank can participants, you ask like question to yourself I’d the open one please line? to and limit please you,

coming [Operator the Mizuho. with our of line Petrone Anthony from first Instructions] Certainly. question And

Your line is open.

start then congratulations on comments you you Thank on I’ll the Jay, second and Pete on to Maybe, Alzheimer’s here Great. a with hop and outlook on performance the I’ll on solid a and half. margins for one disease. over you, XQ positive

forward welcome Jay, with to First, Look GE. working you. to

on those – are And TSAs left? how the operating on the against rolling see expect you margin I’ll to for many when a have recap to when Pete gains do roll-off off Alzheimer’s and And TSAs TSA level? at leverage disease. Maybe follow-up

it. Appreciate Anthony. you, Thank Great.

So standpoint, far, things much TSA from are on very a track.

exit. We few a have quite to

taking and TSAs majority several over far, for exited XX months probably vast to to we’ve the standalone of place with transition fact, spin. the over public XXX is entity. really exits next stage have to setting the XXX In we so following exit the XX But years, those successful our it a

Importantly, are them half exits – about about to are that related to X/X of had the far of IT, facilities. thus another related we’ve

mean prepared remarks, setting in have a our good long-term operations on that ourselves and start I we company. there’s What would that say can And really place, about in optimize So footprint, the area. really our to progress of up. that then statement we long-term once made I by IT the the I

of like area an servers opportunities. have is that optimization But is step in will of spent many days providers, opportunities, where through are of the us of the give optimization currently service with cloud IT multiyear walking just I many we hosted, those of things tailwind few tremendous to the to a things all the IT team moving like application cost. first getting terms a standalone. the rationalizing those

but it standalone. be this a far, going – stage effectively so so does that we ‘XX, to ‘XX than so, and ‘XX more a is operate TSAs. will And as good crucial it’s This this impact XXXX, the at on

And much very team. pivoting you on to just again, to welcome maybe, disease. then and, Alzheimer’s Thank comments Pete, the the

that, Leqembi, recently secured and referenced CMS there amyloid You a to for PET propose out seen plaque. week an here put recently beta proposal more That’s was we’ve local a ago. approval that FDA about MACs scans actually cover than beta

– there is sort views anything we early book several phases when the a TAM journey MR we also here, demand us a along there’s of several on end the consider there’s when patient you take look this at that involved cycle, higher-level opportunity at So can here. PET/CT on

it demand and your large for how just be Thanks on when thoughts GE? begins So can this cycle maybe again. early

drugs me really out. mean, with just new such I in win out mean, to I are going we’re lives. let question. here, start just window patients, that the for for a coming of thanks time change are think it’s these I up fantastic coming And therapies – a Anthony, patients’ where living different are Hey, between tremendous

think Look, interesting significant providers all capabilities. know, GE our these play HealthCare in it’s role bringing in the to pharma with reimbursement, not a but and area a really other in with CMS one areas And this as company governments, bring I forth you we only forward, that’s in of disease what about. here, like changes case, working this where

XX%, that that XX% us confidence impactful. think strong pretty early patients, earlier these better some improvement, going I gives indications be to improvement are

Think of us so as the the speak, disease. management the to company that kind facilitates, of of

play radiopharmaceutical and pulled If major role XX, last role and and up we on deck also you in in assessment are play where about chart PET Vizamyl screening treatment and think with PET imaging monitoring. then actually that or we I diagnosis MR a with the our a products, tracer, the

with after monitoring And amyloid And what in the MRI of at think make the probably all reduction outside then sure point. much to easier know, that digital solutions treatment, any for reregistration, integration, of can there we the make sets beta effects. so that setting, to an having an can tool each that see can you providers. aren’t baseline side make make that that work baseline And as the some that injections encompassed longer-term is academic of this

through fleet help to make our to opportunity of care, so them this the you problem management, across in IDNs that provide think them, with do of and big as that’s statement concentrated think front how well is we happen. city And care, we work rural help can

of it’s too opportunity, size little a think the I On to say. the early

look space. pretty to plays of depending profound out. a how in companion to which believe tied ‘XX, a huge diagnostic time growth this if going follow-on opportunity and therapy reimbursement, the diagnostic not drug, uptake we ultimately ‘XX, tell the across will on is But opportunity that is it’s a that drugs, ‘XX. heavily over think you be the ‘XX, I But the

think what’s is or it’s the vialed other only you about just a put X touches of PET/CT hours. shelf, I know all a product this – is under well, I of drugs a make has and that MR, radiopharmaceutical this once on the can areas, would MRI, and these unlike made, last be and radiopharmaceuticals generic where we’re is The really it it that And company is point the half-life PET the tracer. that interesting

starts degrading. U.S. a as Europe already actually radioactive we in have it and the these And large well to So distribute network isotopes.

grow near-term, think, these the But that in pieces to they together. patients as us for families; I with evolve into for and But going and we’re be the they we’ll how to I as that’s play their first interesting so we and can come other I opportunity an coming folks see think think, super And well. the then second, play. optimistic, marketplace, opportunity

much. very you Thank

Thank from coming with next of BTIG. Zimmerman Ryan you. question And our line the

line Your open. is

Thanks growth questions and good talk the a nice I metric on guys for here. order wanted and the this quarter. appreciate just Hey, morning. congrats about taking I implied that including you to quarter

investors I some basis of how that in XXX year, in think the about looking to order back total? relative And the that. implied about the faced if for is were tougher you think RPO, which half maybe not mistaken. growth. I’m But In comps, just the down context to points

the overall, share. your important of metric in was X%. an to What I Pete. it growth. including with pleased then Maybe like this with Sure. comments over second at strong quarter would and appreciate start for a us coming order say orders And We is, I’ll turn we’re of comments in couple terms we feel did do to

care we improve to think, capacity in health globally continuing I for invest to patient see care. us, providers

for is a us long-term. that driver of and all important very very critical So –

critical as a area for we of would as long-term the orders kind it’s focused growth, driving mid-single-digit that have the at very we half us, to we’re I model company. because this And say, look second on

us, mid-single-digit that is next for targeting we’re For the growth something several years.

continue to to and drive going we’re target level. that performance So

the I overall What bit. as would backlog, relates declined say backlog is, to it a our

declined billion fact the related to orders. $XX.X billion, that’s it faster simply to than was I think it that $XX grew revenues and

as an have We of quality backlog quite incredibly point. we the so feel the And this backlog well. about healthy at good

the rest up does it nicely set So of backlog if I the QX. going have place we’re we because that’s something robust approach we think a year watch as that to can through XXXX in

but other this. so far, dynamic Pete? that of nothing contributed good. decline, the So, revenues There’s than that orders so watch continue we’ll to than to faster

it Yes. the obviously, I’d with all. think were mean, pleased from just we I Jay, Ryan, QX. say, the I you step-up performance, covered

COVID point in still numbers across particularly what switched our there’s and a know, in time. ours imaging that many the durable coming folks’ and But of and little you countries of we As demand world this bit real noise about see is in which out board. at

is productivity surgically other But how you we’re of our the that I how where you think that’s comments incoming about that products diagnose, and bring exist those plan, also aligned procedures. with the guide. seeing backlogs this because is This

So there’s demand aspects. in those strong

talked the would we I I we’ve – into coming us the is that for coming And just being backlog what in about orders And in here mid-single digits is future to our that funnel feed mid-term up we’re feel say, guidance quite mean, the to set about standpoint years. obviously good out revenue growth.

That’s very from target at And I’m the then the helpful. medium-term Day. you, looking Markets margin for Capital back Jay,

those EBIT those just that comment you to the early were margins? just the I factored guidance timing called but company, were teens achievable in around comfortable in achievable, assume high you time standalone maybe if costs. whether And more given I XXs. medium-term in those, think targets of you terms less out your the they low as on of can sharing and see you’re kind

by optimization, of opportunity I company I so would margin opportunities feel if there public put has execution, real good look From each created of at we’ve then that the commercial out, enterprise. together. are that’s and the about lot say is, the we’re spinning there’s you my standpoint, laid company, this drivers that a these. Sure. a But simply off underlying targets new what Overall, innovation

is the the From disciplined company. We’ve health think in we to culture pricing, how at to that this and we This execution idea value we’re around X% a bear forward. this X% going really X% providers that execution that’s the products commercial targeted providing going standpoint, fruit. X% of it to capture something to care the in it’s year, real of to commercial continue embedded sell, idea I

opportunities I think we standpoint, portfolio innovation if is are frankly, excited and it’s the to innovation an have. coming we that which innovation were say, I incredibly the depth And remarkable richness collectively From this just biggest about of really care and the the approach, continuum surprise what’s in, the from my perspective.

excited So a innovation about I’m quite as driver.

and finally can move more, us of then, we just and IT a opportunities other this And of bit how provide little There And we services that areas. for there’s fruit company. new as are public a I rethink to real alluded to lot low-hanging optimize true any we forward. that’s

some there. great opportunity there’s So

So feel quite specific, generally I about being say it. without good speaking, would I

The to last lean impressive been this mindset. make to I’d aspect is related comment is me of culture another this that’s the

our process, get we long margin do how optimization in how the think us company. we get that’s optimization helping the a tool that’s end-to-end of in way to factories, our toolbox going of in go to do idea this I after after so And transform the another

the Thanks guys. for taking questions,

Thanks.

Patrick you. from the coming Stanley. line question Morgan Wood with our Thank next of And

is line open. Your

taking hopefully. much quick keep the two questions. Thank it Perfect. you very for ones, just to I’ll

biggest – or the curious by where nice seeing to any books, more bit pulling we numbers order you’re I’m could would don’t X%. be first apart, just more So give need you little strength, as the either detail Just the and color one, specifically. there I’d imaging region? a whether by if handy. or by really modality love modality plus

So commentary But therapeutic is is for like the acceleration, AI in base. get better there’s a I can you better price scan number healthy grow base needing see if and of then mean? implications wasn’t dynamic? areas it radiology speed penetration and like just Things fewer around of And then a like pricing or cardiac, same take areas scan installed than how around say, you there, actually that remains means it’s of that whole you patients, better, the installed large systems second see through where things. that what the Thanks. the any one that curious at side the whether sense maybe the better you previously let’s function rather it in to adoption pricing obviously,

Yes.

we Patrick, I’ll artificial maybe you it’s and affecting what Look, some the can obviously, in the within on I if around world the areas AI start with orders economic the So all ways. think front. the to intelligence, piece areas Jay, want add color, then, all different

in I used, more is think, it’s productivity. steps in world of kind is making automating the first levels, changing product actually helped straightforward, how our it what many particular, in

throughput So in labor actually able that’s that more which the you which automate, institution on a being almost case having include given labor enables of can constraints, a all, is to higher deal. dollar big

there, out we leaders deal. in products, the a have are AI-integrated of FDA so that that’s the of approved really applications our been one many space, And big XX

focused new us a into competitors and is, gives you already so say, only you some that’s product what value it And but on on, of to four two add our other installed if our would back new base. want I why And is, important the is we of than not it maybe different and have differentiated taking MRs the is sites, upgrading XX%, your than as what’s well today, systems those And that. sometimes allowed upgrade ability capability increases MRs that them makes huge a throughput, quality as the to of the deal. to obviously, and own with image combining marketplace, productivity their the in and the then XX% state-of-the-art XX% manufacturer only out it’s literally better by

value. So we create – area that’s that how significant one

and beyond of is year store, allows customers. revenue own reoccurring to starts speak, with, process our honestly, for that the that we’ll the diagnostic how area to and within access this patient simplifying that’s out. kind and And other later network. demonstrating of wherever that The so applications be customer be enablement cloud-based them applications playing And for AI, computing that might

really important you And we’ll whole and they this be can of in or we’ll in AI aspect then, demonstrating if multimodal a of more integration. get that. assistance leading and idea about is that exams year, side mean it’s we’re talk later have multiple that the term, capabilities you data do interpreting which longer what this to And actually

I going part have that’s disease a we how state, simplify, as case. opportunity actually the around think given to as an support kind also well we be Alzheimer’s again, of important that of to this

AI front. So that’s of the kind it on

I think but about added disease you to capabilities differently. a and throughput productivity also a combination manage how new of state think

else you front, Jay, I may to orders the know what don’t On want add?

second with the No, orders earlier, in overall, like said quarter. pleased I

for us unlock the in I mid-single-digit want to what number competitive great. really I did we’ve the long-term for would which saw is, it. that we would the don’t beneath much think getting that very we strength reasons. have. I And too X% across say But unpack that geographies, shared What I was what include generally, say, strong does model to PDx

the So if growth were to traditional orders a look for equipment was we businesses, line type more X%.

is You but that the illustration which health we could math, to businesses of do an have, it that solid. the I as think equipment gives

helpful. guys. Really Thanks,

you. Thank

line And with you. next Suraj Kalia of coming the our question Thank from Oppenheimer.

Your line is open.

all you Pete, me can Good morning, right? everyone. hear

Yes.

with you Perfect. HealthCare. be a to working again. Welcome Jay, it’s GE to pleasure

you’ve out one six, over think things looking let’s start in for Obviously, be one I’ll terms with next are TSAs, and margin eight margins, a SKUs. should question XX%. Jay. product how rationalizing for Jay. question through the we Corporate gross one Pete corporate about IT, a that So out quarters? map over is little you for What key for? That’s we the of walk Can you. Jay, laid four, should road us say,

I just could more throw And on in AI have I you, a for question, question. Pete, the higher-level a question Pete. piggybacking if quickly

obviously, and business? but grow more you my systems. systems AI How time, exogenous Do your exogenous the AI/ML of you’ll do Over anticipate be with influences it’s ChatGPT taking how services a or questions. Do do to to on disruption? system believe envision pricing, try hold you have maintain you’ll thank Gentlemen, you AIs? interested in ultimately lot as for whether is So your synergistic? interacting whatever, going your you I’m this you AI

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Sure.

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line question the next coming from our And you. Thank of ISI. Vijay Kumar with Evercore

open. is line Your

Pete, congrats you. guys, thanks share] my the question.. and bringing question taking my on Hey, for first for [nice

One of called Russia headwinds. order competitors declines, out your

number? peer you headwind? about number Was clean seeing Russia headwind the Russia that And of there ex when wondering at when in X.XX, share sort was? order shifts I’m a a look book-to-bill of was some declines, your signaling that that you So think growth your what versus is your industry?

be all or again, us Yes. Look, kind the in on I able geographies share An would things. overall say, hold philosophy all be and That’s ideal of on. balanced this most but for our in from gross right slightly the back the and been getting share. the to products of to scenario in up been to a the share, all market get also And has value what we’ve focused ties our geographies. balancing to value is for really price, standpoint margin,

But we XX last have done X, reasonably the months. well here in

a a that "Hey, out, installed we’re you but nice directly I use, good is haven’t that over opportunity, products just you opportunity. platform others standpoint. of to mentioned a a should into say, base position us." cutting-edge at I some is opportunity more our there’s installed really So decade big from sales. and generating an also And base we bring and when a a maybe which new in think in go it’s because new yet vitality, to attributed which take NPI is look of monitoring, metric have had you contributor you a And that

But that call a been anything our point by focused out we’ve the place. overall on been what of that all has to in in was it Russia guidance. bit call we I it’s the there. standpoint about actually been little governments taking from of contemplated things there’s as And we second If around would From didn’t drastically believe half, factoring we’ve a in because maybe do out, could that. I the humanitarian we’ve in Look, say, view, supported the said, along world. improve, better support against

controls reinforce, had a the has I put in a well extending things take team in The clearly contemplated transaction But added to more had guidance. place, to it’s that think it’s process place. reasonably have time but again, and managed U.S. the just government of our the

then HealthCare? the to just GE how are in Pete, And in all, Russia, And what that, is if declines clarify Russia at big for XQ?

break fully or that But So is that out. basically below it range in represents in – we’ve said past, for we the as that what us. slightly is we X% don’t Russia,

in And XQ? the decline

that Russia it is no. sales X%, the in roughly business No, company. total represents maybe against The that slightly whole below

quick Understood. And, Jay, maybe X one you. for

think there’s up first XXX-basis step point I Your a back versus half. half margins,

up? just slightly came Maybe at in Looking XQ, like visibility seems talk OpEx in back half about the step margin above. it

Yes.

the I’d the see, in XX first excitement and think saw expansion. basis did from accelerate R&D an Vijay, I quarter. improvement that quarter, products we the fairly was substantial what new margin there. of great We second look growth, to in like which it the of have And we is face important of the that is some some as of to points we

improvement from QX. to QX basis XX So points

in some quarter. quarter to do As half say probably fourth second activities of is I benefits the to tick be fourth start we up G&A quarter from impacting the substantial third second the year, we see quarter an from on always the what the and the of of margin We the standpoint. to overall have a will some going of move would along the is, the lines

So the And to think we for expansion. seen to that see up stage the drives you coming it fourth also move through. important little does we’ve bit really in much of than start year. set higher a And impact earlier a XXXX margin quarter that’s what because that’s into the continued I level as

about sight. I think good of feel we line So

us that which sight QX, we are we very are. quarter we’ve growth like long-term. things saw second the always from for I margin and to we to margin QX imaging nice importantly, say, But And line a laid cautiously enablers a expansion as of have We’re out. good key nice obviously watching

Thanks, guys. Understood.

our question the Thank Riley. B. line Zhi coming you. with from next And Yuan of

open. Your line is

imaging in Great congrats Nuclear strong Vizamyl? PDx. on your you and you Chicago. capacity of Medicine if the network that the manufacturing agent is moment? words, on demand as of morning, Alzheimer’s is quarter for Good to Can the presence at Can manufacturing manufacturing will this there Conference you adapt details for clarify provide disease, surge contracted more in see how to In the how Thanks. other the quickly? with

question. great No, Yes.

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fast what’s is synthesis the cassette-based product. FASTlab, enables called which which a make kind As to of as conversion structure, well

offer we those. of all So

partners. We have we what and how capacity meet the our to up would own seen just a we’ve say as of of be, I what have have capacity and added believe sites we we – uptake molecules indications network capacity molecule successful on investment. to molecule we adequate X from future and ramp then own ramp will our the needs. early network Pending actually potentially with can would our up X, be,

patients what we’re So opportunity and But it’s that don’t this earlier, their had a again, near-term families really I a I mentioned excited here And issue and after see for to then be further took point And how able follow-up. any actually have exactly see means. to being treatment, is monitor visualization what we us. for then baseline critical along reduction as able on MRI suspect – be the just type that of to in have place doing doing. And is. plaque quantification able being what beta that to plaque later actually in amyloid of to patient while the see

national and that to lifetime think moved back fact encouraged it MACs that, per is that one to part the kind encouraging that to that but the I the actually step the is be direction. came a decision MACs We right it out look at, towards coverage that decision. the they’re They CMS. the to indication. hope that big a going of in move to make Alzheimer’s moves to So CMS of looking scan were of know, said We reimbursement you this,

will So shape feel in the like look good needs. like we’re curves what demand based pretty to we on meet the

you. Got it. Thank

Piper And you. coming Sandler. in Jason question queue our from Thank the line last Bednar with of

open. is line Your

Jason. Hi,

good Understanding congrats results. the the taking Hey, start on put first nice comps the again up strong quarter that on for half. little second and segment quarter in just half tougher Thanks PDx, bit another here. really Wanted to a than questions are of morning. another

correct strength? trends is PDx called million. revenue it any $XXX out you’d up of that $XXX You are forward? think the that notable situation. Is guess, around some I baseline the the absolute And there to factors look to PDx right But influencing rate million run geographic that now at call here out then for we moving when

Jay. ahead, Go

Sure. On towards it a of quarter in quarter, China the COVID there have facility PDx, was third the the – second – related third into quarter. second of we did in end the shutdown the that in our reopened a manufacturing to and reopened

we referring very the challenging have That’s to. – is quarter. did we everybody comp what So a in third

say your rates I distorted standpoint, And dollar a from the growth is in yes, comment think But the think a bit so sales. of look as But good look issues, some would we that a – right one. I business total a this those at of by we’re last I will year. what mean that’s terms range is comparator us. I is, great for overall

to also as driver, We’re this and pleased with important as be question the last will growth that the we’ve well. relates seen an it

growth add Pete, you’d So this I for if know, anything? don’t source a of nice is us.

contrast things PET the into breast be other it just metastatic obviously, imaging imaging. fact XX% that if had business, the the grow time, agent about over Alzheimer’s, that’s you or molecular getting theranostics of And molecular more margins I and grows traditional No, XX-XX with think Yes. a business imaging even going it’s higher whether cancer, FES mentioned side than to about of fundamentally PDx house. the our

– as supply to said, investments the we’ve markets. talked as really respectable actually the Obviously, we’ve study throughout do proper vascular contrast. committed without a That the capacity being well, in without And can’t making limited the to agents, world. there’s you about shore up

shutdown over in QX are all of here for without quite feel had point, cardiac, Jay’s we with there devices. drivers a for one but different because interventional the there many in procedures last to Think lumpy a the in seeing and place, happening taking that procedures to that the is it quarters you’re cases, of contrast get good many will it. a that’s But, little that about surge underlying of the about other procedures be marketplace. study them the study In are implantable couple the we of next that involves or in year,

a terms I And margin. impacts. All as a and on on all the imaging modeling to bit various maybe color Very drill I forward today appreciate for just right. follow-up guys. gross in want helpful, the here more Jay. gross then maybe of down margins

effects. You past just purchases called understandable as component totally is everybody and as inflationary from out dealing here, the a inflation factor it’s with

at guys. comments headwinds? the And of your And past from inventory, worst of offer you in you comfort then as with finished half backlog balance and prepare some imaging product margins and we whatnot. Thanks imaging and those at with where you’re component further then your along second those XQ? your as improve inflation inventory the segment or you seeing lines, maybe your But are look around in where could we level

Sure.

second nice the imaging. quarter a really in on So performance

particular, margin, along on pricing that improvement. incredibly in focused I entire and with think team productivity enhancements is gross and margin

we’ve some last expect X.X% start of half lot second second XX.X%. that’s these was standpoint. enhancement it of the – half to for impact to that from had down does lessen a a think half the come in do the the an inflation of We I be of imaging. And above they So to to purchases first a great do year that year, the from

time And business. longest is our frankly, this lead

why in of longest see the so of for do half it’s start But we’ll to ease the that period And the – second lingered kind we see that’s time. of year.

for margins. be another incremental So tailwind that imaging will

can you XXXX. nice say, above hopefully second the to first So for expect see, I a half like setting half, stage

any closing remarks. Mr. now over turn back you, Thank will call to for and ladies Arduini gentlemen. the I

today. to for for future us look, your Thanks today. So the you the care work to focus transform ahead our We significant at time care. one And help as we’re the we forward excited and on of thank conferences. look about of connecting opportunities joining enablement of you precision upcoming health

our does Ladies conclude for today. and conference gentlemen, that you Thank your participation. for

may You disconnect. now