Please note that today's conference is being recorded. I will now turn the call over to your speaker host for today, Carolyn Borders, please go ahead.

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, Jay Saccaro. Our conference call remarks will include both GAAP and non-GAAP financial results. Reconciliations between GAAP and non-GAAP measures can be found in today's press release and in the presentation slides available on our website. 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 in pharmaceutical diagnostics and mid-single-digit growth in imaging and advanced visualization solutions. We delivered strong bottom line and cash performance in the fourth quarter, excluding tariffs. The overall capital equipment environment remained healthy. Demand in the U.S. and EMEA remained strong. In our recent U.S. 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 seven-year agreement with the University of Rochester Medical Center to advance theranostics and precision medicine. This collaboration crosses every aspect of our enterprise, from AI-enabled imaging equipment and radiopharmaceutical production to system-wide patient monitoring solutions and services. In November, we announced the planned acquisition of Intelerad. We expect this will accelerate our fully connected cloud-first imaging ecosystem by adding digital tools and SaaS offerings that enhance clinical operations, drive recurring revenue, and enable more personalized patient care. As a reminder, in the first full year of ownership, we expect Intelerad revenues to be approximately $270 million, which is growing in the low double digits, with an adjusted EBITDA 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 three pillars of our strategic framework. Let's start with precision care. With diseases becoming more prevalent, complex, 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 radiopharmaceuticals, 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 three-year 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 OmniTotal Body Pet and NextGen 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 Spectra Photon Counting CT and Cigna MR with Freelam. Additionally, customers have great things to say about Vivid Pioneer, our most advanced cardiovascular ultrasound system, which has been contributing to strong growth in ABS, and Flaccato for myocardial perfusion, both which are currently in the market. We're pleased to report that our Flaccato 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. 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. And the week ended January 23rd, we delivered 220 doses of Furcato, 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 Furcato 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. As I stated before, our confidence in our ability to deliver $500 million or more in Fercado revenue by year-end 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. 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. We're also executing on our disciplined capital allocation strategy with tuck-in acquisitions like Nihon Metaphysics and IcoMetrics, and our planned acquisition of IntelliRat. 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. We're gaining momentum with our clinical and solution selling strategy and EMEA with several multi-modality 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 sets us apart with our customers globally. Turning to slide five, underpinning our execution is a step change in how we run a 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. 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. With that, I'll turn it over to Jay to discuss our financial results. Jay?

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, quarter's 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. 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 7, we made excellent progress in 2025, supported by strong end markets, particularly in the U.S. 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. 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, an 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. 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 eight, mitigating care of impact is another example of heartbeat inaction. For example, we enhanced manufacturing flexibility by shifting a PET-CT line from the Middle East to the U.S. and a surgery line from Asia to the U.S., 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. 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 we're doing this in a targeted way prioritizing programs that strengthen our competitiveness and supports durable profitable growth let's move on to segment performance starting with imaging on slide nine organic revenue in the quarter was 5.3 percent versus the prior year driven by strong execution in emea and the U.S., particularly in nuclear medicine. TagVan EBIT margin benefited from volume and price, but declined year-over-year due to tariff pressure. 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 U.S. and the MIA. 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 MPIs 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. 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. 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%. This was driven by global growth in contrast media, pricing execution, and adoption of our U.S. radio-pharmaceutical 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 MPIs, along with the Nihon Metaphysics 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 deliver 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. We also look to deploy capital inorganically, as evidenced by the seven acquisitions we've closed since SPIN. 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 return capital through our dividend and new share repurchase program which we authorized 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. 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 percent 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 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 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 sheriff 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. For the first quarter, recall that we had particularly strong orders growth last year supported by a strong U.S. 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. 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.

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?

Thank you. And as a reminder, ladies 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. Now, first question coming from the line of Matthew Taylor with Jeffrey, CLN is now open.

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. What are some of the puts and takes? I guess what are some of the headwinds and tailwinds for orders next year?

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. 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. 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 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 again, 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 going to happen. 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. 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 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. 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, Jay, for 26 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 launches 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. So from that standpoint, the size of our backlog, I mean, we feel very good where we're positioned here as we start the year.

Great. And as a follow, can I ask a question on Flercato? 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 Flercato into existing Ruminium or SPECT workflows?

Yeah, no, look, I think, you know, broadly, as I mentioned in the prepared remarks, we feel really good about where we are with Plarcato. 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? 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 is 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. 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, So, you know, January, you know, roughly 220 was kind of what the weekly number was. I think we said on January 23rd. And the important part then is now that we have that CMO level, we can continue now to be able to increase that level. 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 in 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, 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.

Great. Thanks for all the color. Thank you.

Our next question coming from the line of Robbie Marcus with JP Morgan. Yalan is now open.

Hi, thanks. This is Alan on for Robbie. Just to start off, can you walk 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?

Okay, so I think we got two questions there, one on China and then EPS. And I think that's related to 2026. Um, the, you know, from, from a China standpoint, really, this has 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, uh, 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. You know, we really wanted to take a cautious approach to China when we put together this guidance. And so in our three to four percent 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?

I would just say, look, I think it's a good perspective on how we're thinking about China early in the year is this prudent approach. 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. 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 know you've heard from us, you've heard from others that some of the tenders are being disputed, which lengthens them out before orders are issued. But we have good insights into those ones which we want, which aren't converted to orders yet. And so we know that our rate in the last six 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. 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 spot.

And then I think you said, can you confirm you're asking about 2026 guidance? Is that the question?

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 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 43-cent tariff headwind. And so the result of that is we saw about 50 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. So all of those things contributed to a solid performance in 2025. Now, moving to 26, 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. 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 Florcato, 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 45 cents. 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. We did spend in the fourth quarter 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.

Thanks, Jay.

If I could just slip it.

Thank you. Our next question coming from the line-off, Larry Biggelson with Wells Fargo, Yolanda Snellman.

Hey, good morning. This is Vic in for Larry. Thanks for taking the questions, too, 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 26 guidance is in line with 2025, and then I had to follow up.

Yeah, Vic, 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. 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 watching this market very carefully. We've taken a, you know, conservative approach here. 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, 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, depending on when approvals come for some of the new products, our ability to convert the 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 as 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 we're going to be leaning in to be able to deliver.

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.

Yeah, no, thanks. As we made in 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 27, 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. And so, you know, things like the Alia Movea, 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 two 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 Mark. And we're going to be doing our first installs here quite soon. And then things such as MR, which was the Sprint Freelium and the Bolt, all of those are under review and making good progress. Christina 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, 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 I feel 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 27, 28 for our midterm targets. Thank you.

Our next question coming from the line of Ryan Zimmerman with PTIG, Yolanus Malvin.

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, the 20% off the leave of the margin, et cetera, you know, just maybe you can kind kind of bridge us, I think, in terms of, you know, the 26 guide to those medium-term targets and kind of how you see that progressing over the next few years.

Could I take a shot at it? Look, we feel good about the mid-term 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 Workato, to help drive one to two 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. But with Heartbeat helping us to deliver higher margin NPIs, to improve productivity, to optimize SG&A, you know, we expect to deliver on our high teens to 20% plus 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. Yeah, and Ryan, just to the point, I mean, we're committed to those midterm targets, top and bottom. 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. Because our goal ultimately is to neutralize as much of that as possible, to move us obviously into that 17 to 20 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. And 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 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 well.

And, Pete, it's like you're anticipating my next question here. The RPO and 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 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 IntelliRat 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. And so we're definitely pleased to see service growth. And then to your point, the Intellirat 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 the fourth quarter and in 2025, we grew sales 6% with growth driven by both price and volume. And, you know, 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 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 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 our team is ready to support that. Pete?

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. Appreciate it.

Thank you. And our next question, coming from the line of Anthony Petroni with Missouri Group. Yolan is now open.

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 and pete and jay both brought up in tellerata came up on the last question you know 270 million growing low double digits 30 margin um 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.

Thanks, Anthony. Look, on price, I think from an orders book standpoint point 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. 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. 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 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 gross margin. So more to come, and we're going to keep an eye on the marketplace to make sure that we appropriately gather the right pricing for the products that we're bringing out. I guess the next question you had was on Intellirad. Jay, maybe you want to kick us off on Intellirad.

Yeah, sure. Maybe I'll share some elements, and then Pete, you can add. We're very excited about the Intelrad 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, 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. 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. So overall, that's really the status on the deal. Pete, anything else you'd like to highlight from strategy?

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 multi-modalities and how they're read. And so having a critical platform such as this will be super important for us. And I just think from a deal complexion standpoint, accretive to top line, accretive to bottom line, fit strategically. These are the type of tuck-in deals that we're obviously looking at. And we're excited to have the IntelliRAD team a part of the family. It's a group of great individuals, and we're excited to get this one here closed in the first half. Thank you.

Thank you. Our next question coming from the lineup. Joanne with City. Yelan is now open.

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 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.

So, you know, the capital backdrop in the U.S. is solid. Every quarter we conduct a study of our top 50 U.S. 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 U.S. market continues to be robust, driven by customer investment in an aging install base. So we're seeing continued momentum on the U.S. 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. 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.

Yeah, Joey, and 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 capital environment. And 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 and healthcare. 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 it 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 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.

Terrific.

Thank you so much.

Thank you.

Our next question, coming from the line of David Roman with Goldman Sachs, Alanis Neltsman.

Thank you. Good morning, everyone. Hey, Pete, hey, Jay, hey, Caroline. Maybe I'll just start with 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 in 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.

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 County, 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 until 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. So, I mean, that's some of the basic dynamics. And I think, you know, Jay talked about trailing 12 months 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. And, again, I think, you know, 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 on-time delivery and executing that more effectively.

Very helpful. And maybe I'll switch gears from China and actually ask on OmniPake and just the PDX business. You know, we did see an acceleration in that franchise in 2020, in the fourth quarter, It doesn't look like Flirtbato is probably big enough to be the contributor there. So how do you think about OmniPake? what are you seeing thus far from a competitive standpoint on the ground and what's kind of reflected in your guidance here?

Yeah, no, I would come in and Jay, maybe you can jump in. I think, you know, VisiMal, some of our other molecules as well continue to do along. I think you're correct based on my comments with Mercado. Not a significant contributor from that standpoint. This is 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. And we've seen a pretty healthy procedures growth coming from, again, many other types of procedures in cardiology and oncology continuing to exist. So solid trends across the board there.

Thank you. And our last questioner will come from the line of Vijay Kumar with Evacor Isayel and it's now open.

Hey, guys. Thanks for taking my question. My first question is on guidance here, Jay. What is Fiscal 26 assuming for Flor Cato? And I know you mentioned China declines with China. Q4 was, I think, down teens. So maybe some noise around there on what is going on in China.

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 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 going 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 just going to take a cautious approach here. 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. And maybe there's a scenario we'd do better than that. But we really wanted to take a cautious approach on China. As it relates to Florcado, 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. 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 going to give guidance 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.

That's helpful, Jack. And then maybe one clarification on my math looks like backlog grew 10% in fiscal 26 and your capital book to build in Q4 was something north of 1.1. Is my math correct?

We share a book to build 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. And then on the backlog, yeah, backlog was up very substantially in the fourth quarter. I'm really pleased with the growth there and how that sets us up for the multi-year view.

Understood. Thank you, guys.

Thank you. And that concludes our question and answer session. Speakers, please proceed with any closing remarks.

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.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.