Fortive — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported revenue of $1.11 billion, up 7.8% year-over-year; core revenue grew 7.2%.
• GAAP net earnings reached $173 million, a 47.4% increase year-over-year, with a GAAP net earnings margin of 15.6%.
• Adjusted EBITDA was $339 million, up 9.5% year-over-year, with an adjusted EBITDA margin of 30.6%.
• GAAP diluted EPS was $0.57, up 62.9% year-over-year; adjusted diluted EPS was $0.77, up 13.2% year-over-year.
• GAAP operating cash flow for the quarter was $313 million; trailing twelve months (TTM) GAAP operating cash flow was $1,177 million.
• Free cash flow for the quarter was $284 million; TTM free cash flow was $1,062 million.
• GAAP operating profit for the segment Intelligent Operating Solutions was $223 million (up 23.6%), with an operating margin of 29.1%.
• GAAP operating profit for the segment Advanced Healthcare Solutions was $38 million (down 10.1%), with an operating margin of 11.2%.

Guidance and Future Outlook:

• Raised full-year 2026 adjusted diluted EPS guidance range to $3.10 to $3.14, representing approximately 15% growth year-over-year at the midpoint.
• Management expressed confidence in delivering on the medium-term financial framework shared at the last Investor Day.
• The company anticipates continued profitable growth and disciplined capital deployment.

Business Segments and Product Lines:

• Intelligent Operating Solutions: Generated $767 million in revenue (up 9.8% reported, 9.1% core) and $275 million in adjusted EBITDA (up 13.6%).
• Advanced Healthcare Solutions: Generated $340 million in revenue (up 3.7% reported, 3.1% core) and $88 million in adjusted EBITDA (down 4.8%).
• The company continues to execute its "Fortive Accelerated" strategy, focusing on innovation acceleration, commercial acceleration, and recurring customer value.

Market and Competitive Landscape:

• The company operates in markets characterized by continuous improvement and strong brand positions in essential technologies.
• Intelligent Operating Solutions demonstrated stronger growth momentum compared to Advanced Healthcare Solutions during the quarter.

Risks and Challenges:

• Potential risks include deterioration of the economy, international trade policies, tariffs, and geopolitical conflicts (including in the Middle East and Ukraine).
• Supply chain constraints, reliance on sole sources of supply, and commodity costs remain factors.
• Risks related to data security, cyber breaches, and the impact of artificial intelligence deployment are noted.
• Risks include the potential for product defects, recalls, and litigation regarding intellectual property or environmental matters.
• Risks associated with the separation of Precision Technologies (Ralliant Corporation) and related indemnification obligations are present.

Management Commentary and Tone:

• Olumide Soroye, President and CEO, described Q3 as a quarter of "strong and accelerating performance," noting the fifth consecutive quarter of double-digit adjusted EPS growth.
• Management cited growing evidence that investments in innovation, commercial acceleration, and recurring customer value are driving faster revenue growth.
• The tone was confident regarding the trajectory of the business and the ability to build investor trust.

Other Key Points:

• Completed approximately $300 million in share repurchases in Q3, representing roughly 5 million shares or 2% of diluted shares outstanding.
• Total share repurchases since the launch of the new Fortive structure reached approximately $2.3 billion, representing ~43 million shares or ~13% of shares outstanding.
• On June 28, 2025, the company completed the separation of its former Precision Technologies segment by distributing Ralliant Corporation stock to shareholders; all amounts herein refer to continuing operations.
• The company recorded a pretax IEEPA tariff refund of $18.0 million in the quarter.
• Cash paid for acquisitions, net of cash received, was $58.1 million for the nine months ended October 2, 2026.
• Total long-term debt increased to $3,514.2 million as of October 2, 2026, from $2,306.5 million as of December 31, 2025.