GEHC earnings analysis
What we found in GEHC's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
GE HealthCare posted a solid Q2 revenue and GAAP earnings improvement: revenue rose 5.7% to $5.295B, operating margin expanded 90 bps to 14.0%, and diluted EPS increased to $1.24. AIS and PDx more than offset a sharp PCS decline, but adjusted EBIT margin fell 40 bps to 14.2% amid inflation and planned investment. Cash flow improved, while tariff refunds materially benefited reported results and PCS execution, tariff exposure, and working-capital consumption remain key watch items.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue growth accelerates sequentially
- Q2 revenue was $5.295B, up $288M or 5.7% YoY from $5.007B, and up from $5.130B in Q1 2026. Organic revenue grew 3.5%, led by AIS and PDx.
- GAAP profitability and EPS improved
- GAAP operating income increased $86M to $739M, lifting operating margin 90 bps to 14.0% from 13.1% a year ago; gross profit rose $195M to $2.180B. Diluted EPS increased $0.18 to $1.24 from $1.06 and rose from $0.85 in Q1 2026.
- AIS drives growth and margin expansion
- AIS revenue grew $277M to $3.771B, with 5.0% organic growth in cardiovascular/interventional, CT and molecular imaging. AIS segment EBIT grew $70M to $525M and margin expanded to 13.9% from 13.0%.
- PDx delivered strongest organic growth
- PDx revenue grew $114M to $843M, or 15.6% reported and 14.6% organic, on contrast-media and radiopharmaceutical volume and price. Segment EBIT increased $36M to $250M, with a 29.6% margin.
- Cash generation improved despite investment
- Six-month operating cash flow increased $114M to $458M from $344M. After $278M of PP&E and internal-use-software additions, free cash flow was $180M, up 70.0% from $106M; capex represented 2.7% of six-month revenue of $10.425B.
- Liquidity supports investment and buybacks
- Liquidity remained substantial, with $2.105B of cash, cash equivalents and restricted cash plus $3.500B of aggregate revolving credit facilities at June 30, 2026. The company repurchased $200M of shares in May at $61.05 per share.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- PCS operational issues produced a segment loss
- PCS revenue fell $104M, or 13.3%, to $675M due primarily to operational and fulfillment challenges. Its segment EBIT deteriorated $85M to a $26M loss, versus $59M of profit a year earlier.
- Tariff cost and refund timing remain material
- Tariffs reduced Q2 operating income by $68M and six-month operating cash flow by $175M before refunds. Q2 GAAP results included $106M of pre-tax refunds related to 2025 tariffs and $23M related to 2026 tariffs, while a further $38M refund receivable remains subject to administrative validation.
- Working-capital outflow and leverage increased
- Six-month working-capital and other asset/liability changes consumed $840M of cash, driven mainly by inventory increases, compensation/benefit payments and company-funded postretirement payments. Total debt increased $90M to $10.093B from $10.003B at December 31, 2025 following a $650M delayed-draw loan drawdown.
- China demand and competition remain headwinds
- Management states China volume-based procurement and stronger local competition have affected orders and revenue; China-region revenue was only $582M in Q2, up $19M or 3.4%, with favorable FX partly offsetting PCS declines.
- Russia/Ukraine operations retain disruption exposure
- There were no material changes to risk factors from the 2025 10-K. Nonetheless, management cites $190M of assets tied to Russia and Ukraine and $106M of six-month revenue from those countries, where licensing restrictions continue to affect supply capability.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.24
- Gross margin
- 41.2%
- Operating margin
- 14.0%
- Segment
- Advanced Imaging Solutions (AIS): $3.771B revenue, +7.9% YoY (+5.0% organic)
- Segment
- Pharmaceutical Diagnostics (PDx): $843M revenue, +15.6% YoY (+14.6% organic)
- Segment
- Patient Care Solutions (PCS): $675M revenue, -13.3% YoY (-13.5% organic)
What they said about what is next.
The 10-Q does not provide explicit quantitative full-year guidance; quantitative outlook was deferred to the earnings release/call.
The filing reads about the same as the one before it.
What came before.
- 10-Q · April 29, 2026
- GE HealthCare's Q1 2026 results reflected a revenue increase to $5.1 billion, a 7.4% rise compared to the prior year, driven by growth in the Imaging and Pharmaceutical Diagnostics segments. However, the company's…
- 10-Q · October 29, 2025
- GE HealthCare reported Q3 revenues of $5,143 million, up $280 million (+5.8%) versus the year-ago quarter, but experienced margin compression (gross margin 38.7%, operating margin 12.7%) and EPS softness (diluted EPS…
- 10-K · February 13, 2025
- GE HealthCare positions itself as a global leader in 'precision care' with an integrated portfolio of imaging, ultrasound/IGT (now AVS), patient monitoring/therapy and pharmaceutical diagnostics, plus a push into…
- 10-Q · April 30, 2024
- GE HealthCare reported Q1 revenues of $4,650 million, down $57 million versus Q1 2023, while gross profit rose slightly to $1,902 million and diluted EPS increased to $0.81 from $0.41 a year earlier. Segment-level…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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