Philips swings to profit as AI-driven diagnostic sales offset tariff pressures

Koninklijke Philips (NYSE:PHG) reported a return to profitability in its fourth quarter, bolstered by a 7% rise in comparable sales and the successful rollout of AI-driven medical imaging systems.

For the quarter ended December 31, 2025, the Amsterdam-based health technology leader posted net income of $459.8 million, or $0.48 per share, a sharp reversal from the $333 million loss recorded in the same period last year.

When adjusted for one-time costs and gains, earnings reached $0.70 per share, surpassing the consensus analyst estimate of $0.62.

Revenue for the period totaled $5.93 billion (€5.1 billion), driven by broad-based demand across all business segments.

The company’s Diagnosis & Treatment business saw 4% growth, while Personal Health surged 14% on the back of strong holiday demand for high-end grooming and oral care products.

A key driver of the quarter’s performance was the margin expansion in Philips' connected care and diagnostic informatics units.

The company's adjusted EBITA margin rose 160 basis points to 15.1%, as productivity gains and a favorable product mix—including the world’s first AI-powered Spectral CT detector—offset the impact of rising global tariffs.

CEO Roy Jakobs noted that the company has now delivered on its three-year productivity target, achieving over $2.5 billion in cumulative savings since 2023.

For the full year 2025, Philips reported a total profit of $1.01 billion on revenue of $20.17 billion.

Looking ahead, the company issued 2026 guidance forecasting comparable sales growth of 3% to 4.5% and a mid-teens EBITA margin by 2028.