Core Insights - Fortive Corporation (FTV) reported second-quarter 2025 adjusted earnings per share (EPS) of 58 cents, missing the Zacks Consensus Estimate of 60 cents, but showing a year-over-year increase of 3.6% [1] - Revenues for the quarter declined by 0.4% year over year to $1.02 billion, surpassing the Zacks Consensus Estimate by 0.8% [1] - The company completed the spin-off of Ralliant, marking a strategic shift and aiming to accelerate profitable growth and maximize shareholder returns [3][4] Financial Performance - Adjusted gross profit decreased by 0.5% year over year to $650 million, with an adjusted operating margin of 26.7%, contracting by 40 basis points [10] - The Intelligent Operating Solutions segment generated revenues of $696.9 million, contributing 68.6% to total revenues, remaining almost flat year over year [6] - The Advanced Healthcare Solutions segment reported revenues of $319.5 million, down 1.3% year over year [6] Cash Flow and Shareholder Returns - As of June 27, 2025, cash and cash equivalents were $1.827 billion, up from $892.1 million as of March 28, 2025 [11] - Fortive generated an operating cash flow of $205 million for the second quarter, compared to $191.8 million in the previous quarter, and non-GAAP free cash flow was $180 million [11] - The company repurchased approximately $140 million worth of shares during the reported quarter, aligning with its capital deployment strategy [12] Future Outlook - Fortive anticipates third-quarter revenues to be roughly in line with the second quarter, with core revenue growth expected to be consistent with the first half [13] - The company projects fourth-quarter adjusted EPS to be significantly higher than the third quarter, while third-quarter adjusted EPS is expected to be slightly below second-quarter levels [15] - For the full year 2025, Fortive expects adjusted EPS from continuing operations to be in the range of $2.50 to $2.60 [15]

Core Insights - Fortive completed the spin-off of Ralliant (Precision Technologies) on June 28, 2025, allowing a focus on its core segments [5][4] - Q2 2025 GAAP revenue from continuing operations was $1,020 million, slightly above analyst estimates, but a 0.4% decline from Q2 2024 [1][5] - Adjusted diluted EPS for Q2 2025 was $0.58, narrowly missing the consensus estimate of $0.59, marking a 3.6% increase year-over-year [2][1] Financial Performance - Adjusted EBITDA for Q2 2025 was $288 million, down 1.0% from the previous year, with an adjusted EBITDA margin of 28.4% [6][2] - Free cash flow from continuing operations was $180 million, a decrease of 9.1% year-over-year, while trailing twelve-month free cash flow increased to $939 million, a 13.7% improvement [6][2] - Net income on a GAAP basis remained flat at $112 million in Q2 2025 [6] Segment Analysis - Revenue from the Intelligent Operating Solutions segment was flat year-over-year, with an improved adjusted EBITDA margin by 50 basis points [7] - Advanced Healthcare Solutions saw a revenue decline of 1.3% in Q2 2025, with core revenue down 1.9%, although margins improved modestly [7] - Core revenue, excluding acquisitions and currency effects, dipped 0.7% in Q2 2025, contrasting with a 3.9% growth in Q2 2024 [5] Strategic Focus - The company emphasizes operational discipline and the Fortive Business System for continuous improvement and cost control [4][8] - Management acknowledged uncertainties related to trade, healthcare, and government spending impacting demand [8] - Fortive completed $345 million in share repurchases in the first half of 2025, returning capital to shareholders [8] Future Outlook - Fortive set its full-year 2025 adjusted diluted EPS target between $2.50 and $2.60 for continuing operations, without providing specific revenue or segment-level outlooks [10] - The company remains focused on reigniting organic revenue growth in its post-spin configuration [11]

Financial Data and Key Metrics Changes - The company delivered total revenue of just over $1 billion, down 0.4% year over year, with core revenue declining 0.7% [18][20] - Adjusted EPS was $0.58, up 4% year over year, driven by stable adjusted EBITDA and lower interest expenses [20][21] - Free cash flow for Q2 was $180 million, with trailing twelve-month free cash flow of $939 million, representing a 14% year-over-year increase [21][30] Business Line Data and Key Metrics Changes - Intelligent Operating Solutions segment saw revenue and core revenue growth essentially flat year over year, with adjusted gross profit at $461 million, down slightly from the prior year [22][24] - Advanced Healthcare Solutions segment delivered total revenue of $320 million, down 1.3% year over year, with adjusted gross margins increasing from just under 58% to just over 59% [26][28] Market Data and Key Metrics Changes - North America showed slight positive growth, while Western Europe, China, and Latin America experienced year-over-year declines [19][20] - The company noted that customer demand pressures were influenced by macroeconomic factors, including tariff uncertainty and constrained government spending [7][19] Company Strategy and Development Direction - The company is focused on executing its Fortive Accelerated strategy, which includes innovation acceleration, commercial acceleration, and enhancing recurring customer value [11][12] - The company is initiating guidance for continuing operations, reflecting a full-year outlook consistent with its new approach of providing clear and simplified guidance [8][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macro pressures and emphasized the importance of the projects in the pipeline for government spending [50][51] - The company anticipates that the revenue slip experienced in Q2 will normalize in the coming quarters, with a strong outlook for the second half of the year [22][55] Other Important Information - The company received a $1.15 billion dividend from the Rallyant spinoff, which was used to pay down debt and fund share repurchases [30][31] - The gross tariff impact for Fortive's continuing operations is expected to be approximately $40 million to $55 million in 2025, with annualized impacts of $80 million to $120 million [29] Q&A Session Summary Question: Insights on second half moving pieces between Q3 and Q4 - Management confirmed that Q3 EPS is expected to be in the low to mid-50s range, with a sequential increase in Q4 driven by tax rate drops and tariff countermeasures [42][44] Question: Government spending and healthcare market outlook - Management noted that while government spending pressures exist, essential projects are still in the pipeline, and healthcare spending is expected to recover as reimbursement policies stabilize [50][51] Question: Clarification on organic sales growth expectations - Management indicated that organic sales growth in Q3 is expected to be consistent with the modest decline seen in Q2, with AHS facing high year-over-year comps [60][64] Question: Renewal rates for Gordian or iOS software - Management reported strong renewal rates across all software businesses, with a focus on expanding and cross-selling to enhance net dollar retention [67][68] Question: Rationale behind not providing high-level organic growth guidance - Management emphasized the intention to simplify communications with investors while maintaining focus on a multi-year value creation plan [73][74] Question: Approach to bolt-on acquisitions - Management clarified that there is a heightened level of scrutiny for bolt-on acquisitions, with a focus on ensuring that each deal meets high strategic and financial criteria [78][79]

Financial Data and Key Metrics Changes - The company delivered adjusted EPS of $0.90 for the final quarter as a consolidated entity, with an 8% growth in trailing twelve months adjusted free cash flow [7][8] - For continuing operations, adjusted EPS was $0.58, reflecting a 4% year-over-year increase, and trailing twelve months free cash flow grew 14% to $939 million [19][20] - Total revenue for Q2 was just over $1 billion, down 0.4% year-over-year, with core revenue declining 0.7% [17][18] Business Line Data and Key Metrics Changes - Intelligent Operating Solutions (IOS) segment saw flat revenue and core revenue growth year-over-year, with adjusted gross profit at $461 million, down slightly from the prior year [21][23] - Advanced Healthcare Solutions (AHS) segment reported total revenue of $320 million, down 1.3% year-over-year, with adjusted gross margins increasing from just under 58% to just over 59% [25][26] Market Data and Key Metrics Changes - North America showed slight positive growth, while Western Europe, China, and Latin America experienced year-over-year declines [18][19] - The company noted that customer demand pressures were influenced by macroeconomic factors, including tariff uncertainty and constrained government spending [7][18] Company Strategy and Development Direction - The company is focused on executing its "Fortive Accelerated" strategy, which aims to drive faster profitable growth and strong shareholder value creation [11][15] - The company is activating its bolt-on M&A engine with a disciplined approach to evaluate deals based on relative returns [15][76] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic challenges and emphasized the importance of their capital allocation strategy [15][34] - The company anticipates a modest gross margin and EPS headwind in Q3 due to ongoing tariff impacts, but expects to mitigate these by Q4 [27][30] Other Important Information - The company received a $1.15 billion dividend from the Rallyant spinoff, which was used to pay down debt and fund share repurchases [28][29] - The company initiated full-year adjusted EPS guidance for New Fortive at $2.5 to $2.6 per share, reflecting current market dynamics [30][32] Q&A Session Summary Question: What is the expected EPS for Q3 and Q4? - Management indicated that Q3 EPS is expected to be in the low to mid-50s range, with a potential increase in Q4 due to tax rate drops and other factors [41][45] Question: How are the main end markets expected to perform? - Management noted that government spending pressures and healthcare reimbursement uncertainties impacted Q2, but they expect improvements in the second half of the year [46][50] Question: What is the approach to guidance and disclosure moving forward? - The company plans to provide annual adjusted EPS guidance updated quarterly, focusing on clarity and simplification in communications with investors [72][73] Question: How is the company handling bolt-on M&A? - The company is ready to pursue bolt-on acquisitions with a heightened level of financial and strategic scrutiny, ensuring that each deal meets high standards [76][78]

Q2 2025 Consolidated Financial Performance - Revenue decreased by 2.2% from $1,552 million in Q2 2024 to $1,519 million in Q2 2025[11] - Core growth declined by 2.5% compared to approximately flat growth in the previous year[11] - Adjusted EPS decreased by 3.2% year-over-year, from $0.93 to $0.90[11] - Adjusted Free Cash Flow increased to $297 million, compared to $280 million in the same quarter last year[11] - Trailing Twelve Month (TTM) Adjusted Free Cash Flow grew by 8.4% to $1,416 million[11] New Fortive Overview - New Fortive has approximately $4.1 billion in revenue[14] - The company's core growth 5-year Compound Annual Growth Rate (CAGR) is 4%[14] - Adjusted EBITDA margin is 29%[14] - Approximately 50% of revenue is recurring[14] - Free Cash Flow is approximately $0.9 billion[14] - Adjusted Gross Margin is 64%[14] Q2 2025 Continuing Operations Performance - Revenue decreased slightly by 0.4% from $1,020 million to $1,016 million[23] - Core growth declined by 0.7%[23] - Adjusted EPS increased by 3.6% from $0.56 to $0.58[23] - Trailing Twelve Month (TTM) Free Cash Flow grew by 13.6% to $939 million[23] Tariff Impact - Estimated total gross incremental tariff impact for the second half of 2025 is $40 million to $55 million[30] - The annualized impact of tariffs is estimated to be $80 million to $120 million[30]

Core Insights - Fortive (FTV) reported a revenue of $1.02 billion for the quarter ended June 2025, marking a year-over-year decline of 34.5% and an EPS of $0.58 compared to $0.93 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $1.01 billion by 0.85%, while the EPS fell short of the consensus estimate of $0.60 by 3.33% [1] Financial Performance Metrics - Advanced Healthcare Solutions generated sales of $319.5 million, slightly above the estimated $319.3 million, reflecting a year-over-year decline of 1.3% [4] - Intelligent Operating Solutions reported sales of $675.7 million, below the estimated $689.46 million, with a year-over-year change of -0.2% [4] - Adjusted Operating Profit (Non-GAAP) for Intelligent Operating Solutions was $223.7 million, exceeding the average estimate of $222.26 million [4] - Adjusted Operating Profit (Non-GAAP) for Advanced Healthcare Solutions was $80.8 million, surpassing the estimated $75.14 million [4] - Operating Profit for Advanced Healthcare Solutions was $39.1 million, above the average estimate of $36.77 million [4] - Operating Profit for Intelligent Operating Solutions was $166.7 million, below the average estimate of $179.96 million [4] - Operating Profit for Other segments was -$76.8 million, significantly worse than the average estimate of -$30.83 million [4] Stock Performance - Fortive's shares have returned -4.2% over the past month, contrasting with the Zacks S&P 500 composite's increase of +3.4% [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

[Executive Summary & Business Outlook](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Outlook) Fortive completed the Ralliant separation in Q2 2025, launching a new value creation plan and providing a full-year outlook [Second Quarter 2025 Performance Highlights](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Highlights) Fortive completed the Ralliant separation and launched a new value creation plan in Q2 2025, achieving strong profitability and free cash flow - Completed the Ralliant separation, commencing a new chapter for Fortive focused on accelerating profitable growth and enhancing shareholder returns[3](index=3&type=chunk)[5](index=5&type=chunk) - Achieved strong profitability and free cash flow despite uncertainties from trade, healthcare, and government spending policies[3](index=3&type=chunk) Second Quarter 2025 Consolidated Financial Highlights (Including Precision Technologies) | Metric | Amount | Notes | | :-------------------------------- | :------- | :--- | | GAAP Diluted Net Earnings per Share | $0.49 | | | Adjusted Diluted Net Earnings per Share | $0.90 | At high end of guidance | | Revenue | $1,020 million | Down 0.4% year-over-year | | Core Revenue | | Down 0.7% | | GAAP Net Earnings | $112 million | 11.0% margin | | Adjusted EBITDA | $288 million | 28.4% margin | | First Half Share Repurchases | $345 million | | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Olumide Soroye emphasized Q2 2025 as pivotal, with the Ralliant separation and launch of the "Fortive Accelerated Strategy" for growth and shareholder returns - Q2 2025 marked a pivotal period for Fortive, with the completion of the Ralliant separation and the launch of a new value creation plan to accelerate profitable growth and enhance shareholder returns[3](index=3&type=chunk) - Despite market uncertainties, the company achieved strong profitability and free cash flow, demonstrating the strength of its market-leading brands and the Fortive Business System[3](index=3&type=chunk) - The new leadership team will focus on executing the "Fortive Accelerated Strategy," including disciplined capital allocation and building investor trust, to create significant shareholder value in the coming years[3](index=3&type=chunk) [Full Year 2025 Outlook](index=1&type=section&id=Full%20Year%202025%20Outlook) Fortive anticipates full-year 2025 adjusted diluted net earnings per share from continuing operations to be between $2.50 and $2.60 Full Year 2025 Outlook (Continuing Operations) | Metric | Range | | :----------------------- | :----------- | | Adjusted Diluted Net Earnings per Share | $2.50 - $2.60 | [Summary Financial Results, Fortive Continuing Operations](index=2&type=section&id=Summary%20Financial%20Results,%20Fortive%20Continuing%20Operations) Fortive's continuing operations saw a slight Q2 2025 revenue decrease, but GAAP net earnings and adjusted diluted EPS grew, despite a year-over-year free cash flow reduction Fortive Continuing Operations Financial Summary (Q2-25 vs Q2-24) | Metric | Q2-25 | Q2-24 | Change | | :-------------------------- | :------ | :------ | :----- | | Revenue | $1,016M | $1,020M | $(4)M | | Reported/Core Growth | (0.4)% / (0.7)% | 3.7% / 3.9% | | | GAAP Net Earnings | $112M | $112M | —% | | GAAP Net Earnings Margin | 11.0% | 11.0% | 0 bps | | Adjusted EBITDA | $288M | $291M | (1.0)% | | Adjusted EBITDA Margin | 28.4% | 28.6% | (20) bps | | GAAP Diluted Net Earnings per Share | $0.33 | $0.32 | 3.1% | | Adjusted Diluted Net Earnings per Share | $0.58 | $0.56 | 3.6% | | GAAP Operating Cash Flow | $205M | $218M | (6.0)% | | Free Cash Flow | $180M | $198M | (9.1)% | | TTM GAAP Operating Cash Flow | $1,029M | $912M | 12.8% | | TTM Free Cash Flow | $939M | $826M | 13.7% | [Summary Segment Financial Results, Fortive Continuing Operations](index=2&type=section&id=Summary%20Segment%20Financial%20Results,%20Fortive%20Continuing%20Operations) Intelligent Operating Solutions revenue remained stable with adjusted EBITDA growth, while Advanced Healthcare Solutions saw a slight revenue decrease but improved adjusted EBITDA margin Fortive Continuing Operations Segment Financial Summary (Q2-25 vs Q2-24) | Intelligent Operating Solutions | Q2-25 | Q2-24 | Change | | :---------------------------- | :------ | :------ | :----- | | Revenue | $697M | $697M | $—M | | Reported/Core Growth | 0.1% / (0.2)% | 3.8% / 3.3% | | | GAAP Operating Profit | $171M | $173M | (1.2)% | | GAAP Operating Profit Margin | 24.5% | 24.9% | (40) bps | | Adjusted EBITDA | $236M | $232M | 1.7% | | Adjusted EBITDA Margin | 33.8% | 33.3% | 50 bps | | Advanced Healthcare Solutions | Q2-25 | Q2-24 | Change | | :---------------------------- | :------ | :------ | :----- | | Revenue | $320M | $324M | $(4)M | | Reported/Core Growth | (1.3)% / (1.9)% | 3.4% / 5.0% | | | GAAP Operating Profit | $36M | $36M | —% | | GAAP Operating Profit Margin | 11.2% | 11.0% | 20 bps | | Adjusted EBITDA | $86M | $86M | —% | | Adjusted EBITDA Margin | 26.9% | 26.6% | 30 bps | [Ralliant Separation](index=3&type=section&id=Ralliant%20Separation) Fortive completed the separation of Ralliant Corporation, its former Precision Technologies segment, in June 2025 [Ralliant Separation Details](index=3&type=section&id=Ralliant%20Separation%20Details) Fortive completed the Ralliant Corporation separation on June 28, 2025, distributing common stock to shareholders, with Ralliant reclassified as discontinued operations from Q3 2025 - Fortive completed the separation of Ralliant Corporation, its former Precision Technologies segment, on **June 28, 2025**, distributing common stock to Fortive shareholders[8](index=8&type=chunk) - Ralliant will be classified as discontinued operations starting in **Q3 2025**; "continuing operations" results in this report have been retrospectively adjusted to treat the Precision Technologies segment as discontinued operations[9](index=9&type=chunk) [Company Information](index=3&type=section&id=Company%20Information) Fortive provides an overview of its mission, strategic segments, operational model, investor conference call details, and contact information [About Fortive](index=3&type=section&id=About%20Fortive) Fortive innovates critical technologies for global safety and productivity, operating through Intelligent Operating Solutions and Advanced Healthcare Solutions, powered by the Fortive Business System - Fortive focuses on innovating essential technologies to ensure the world's safety and productivity[12](index=12&type=chunk) - The company operates through two strategic segments, Intelligent Operating Solutions and Advanced Healthcare Solutions, with leading brands in their respective markets[12](index=12&type=chunk) - Headquartered in Everett, Washington, Fortive employs over **10,000 people** in approximately **50 countries** globally, with the Fortive Business System as its core operating model, fostering a culture of continuous improvement[12](index=12&type=chunk) [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) Fortive will host an investor conference call on July 30, 2025, at 12:00 PM ET to discuss results and outlook, with webcast and replay available online - Fortive will host a quarterly investor conference call on **July 30, 2025, at 12:00 PM ET** to discuss results and outlook[10](index=10&type=chunk) - The conference call and accompanying slide presentation will be webcast live and available for replay under the "Events/Presentations" section of the "Investors" portion of Fortive's website[10](index=10&type=chunk)[11](index=11&type=chunk) [Investor Contact](index=5&type=section&id=Investor%20Contact) Investors can contact Christina Jones of Fortive Investor Relations via phone or email for further information - Investors may contact **Christina Jones**, Investor Relations, for more information at **(425) 446-5000** or **investors@fortive.com**[16](index=16&type=chunk) [Non-GAAP Financial Measures Explanation](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation) This section explains Fortive's non-GAAP financial measures, their rationale, and limitations, for a clearer view of operational performance and trends [Overview and Rationale](index=4&type=section&id=Overview%20and%20Rationale) Fortive provides non-GAAP metrics like adjusted net earnings and free cash flow to supplement GAAP, aiding understanding of profitability trends and facilitating comparisons - Non-GAAP financial measures, including **adjusted net earnings**, **adjusted diluted net earnings per share**, **adjusted EBITDA**, **free cash flow**, and **core revenue growth**, aim to provide additional perspectives for investors to understand long-term profitability trends and operational performance[13](index=13&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) - These non-GAAP measures should not be considered substitutes for or superior to GAAP measures, should be read in conjunction with GAAP metrics, and may differ from similarly titled non-GAAP measures used by other companies[13](index=13&type=chunk)[35](index=35&type=chunk) [Adjusted Net Earnings, Adjusted Diluted Net Earnings per Share, Adjusted EBITDA, and Adjusted EBITDA Margin](index=15&type=section&id=Adjusted%20Net%20Earnings,%20Adjusted%20Diluted%20Net%20Earnings%20per%20Share,%20Adjusted%20EBITDA,%20and%20Adjusted%20EBITDA%20Margin) These non-GAAP metrics adjust GAAP net earnings and diluted EPS by excluding non-core items like acquisition amortization, separation expenses, and discrete tax charges, providing a clearer operational performance view - Adjustments include **acquisition-related intangible asset amortization**, **acquisition/divestiture/separation-related items**, **discrete restructuring charges**, **equity investment gains/losses**, **gains/losses on divestitures**, **gains on asset sales**, and **charitable contribution expenses**[37](index=37&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk)[48](index=48&type=chunk) - For adjusted EBITDA and adjusted EBITDA margin from continuing operations, **net interest expense**, **depreciation expense**, and **income taxes** are also excluded[37](index=37&type=chunk) - Discrete tax charges from the Ralliant separation are also excluded as they are non-recurring and do not reflect current or future cash tax obligations[49](index=49&type=chunk) [Core Revenue Growth](index=18&type=section&id=Core%20Revenue%20Growth) Core revenue growth is a non-GAAP metric that excludes acquisition/divestiture and currency impacts to measure year-over-year revenue change and identify underlying business trends - Core revenue growth is calculated by excluding the impact of **acquisitions or divestitures** and **foreign currency translation** to identify underlying business growth trends[52](index=52&type=chunk)[53](index=53&type=chunk) - Excluding these items helps assess business trends and facilitate long-term performance comparisons, as they are outside management's control and highly volatile[53](index=53&type=chunk) [Free Cash Flow](index=18&type=section&id=Free%20Cash%20Flow) Free cash flow is a non-GAAP metric, defined as operating cash flow minus capital expenditures, used to assess the company's ability to generate cash and fund operations without external financing - Free cash flow is defined as **net cash provided by GAAP operating activities less capital expenditures**[54](index=54&type=chunk) - This metric helps assess the company's ability to generate cash, fund acquisitions and investments, and repay debt without relying on external financing[55](index=55&type=chunk) - Free cash flow has limitations as a liquidity measure because it excludes certain necessary or committed expenditures, such as debt repayment requirements[55](index=55&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section outlines forward-looking statements, highlighting potential risks and uncertainties that could cause actual results to differ materially [Forward-Looking Statements Disclaimer](index=4&type=section&id=Forward-Looking%20Statements%20Disclaimer) This report contains forward-looking statements on future financial performance and market conditions, which may differ materially due to economic instability, trade policies, and other risks - Forward-looking statements in this report pertain to expected financial performance, trade policy impacts, global economic conditions, the Ralliant separation's effects, and capital allocation strategies[14](index=14&type=chunk) - Actual results may differ materially due to various factors, including **economic instability**, **market volatility**, **trade policies**, **supply chain constraints**, **competition**, **regulatory changes**, **acquisition integration risks**, and **geopolitical events**[14](index=14&type=chunk)[15](index=15&type=chunk) - Fortive undertakes no obligation to update or revise any forward-looking statements[15](index=15&type=chunk) [Consolidated Financial Statements (GAAP)](index=6&type=section&id=Consolidated%20Financial%20Statements%20(GAAP)) This section presents Fortive's consolidated GAAP financial statements, including earnings, balance sheets, and cash flows, reflecting overall company performance [Consolidated Condensed Statements of Earnings](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Earnings) Fortive's total sales in Q2 and the first half of 2025 decreased year-over-year, with net earnings and earnings per share also showing a downward trend Consolidated Condensed Statements of Earnings (Q2 2025 vs Q2 2024) | Metric | June 27, 2025 (Three Months) | June 28, 2024 (Three Months) | | :-------------------------- | :----------------------- | :----------------------- | | Sales | $1,518.8M | $1,552.4M | | Operating Profit | $222.2M | $301.8M | | Net Earnings | $166.6M | $195.1M | | Diluted Net Earnings per Share | $0.49 | $0.55 | Consolidated Condensed Statements of Earnings (First Half 2025 vs First Half 2024) | Metric | June 27, 2025 (Six Months) | June 28, 2024 (Six Months) | | :-------------------------- | :----------------------- | :----------------------- | | Sales | $2,993.0M | $3,076.9M | | Operating Profit | $455.8M | $604.0M | | Net Earnings | $338.5M | $402.5M | | Diluted Net Earnings per Share | $0.99 | $1.13 | [Segment Information](index=7&type=section&id=Segment%20Information) In Q2 2025, Precision Technologies saw significant declines in sales and operating profit, while other segments remained relatively stable or slightly decreased Segment Sales (Q2 2025 vs Q2 2024) | Segment | June 27, 2025 | June 28, 2024 | | :-------------------------- | :------------- | :------------- | | Intelligent Operating Solutions | $675.7M | $677.0M | | Precision Technologies | $523.6M | $551.8M | | Advanced Healthcare Solutions | $319.5M | $323.6M | | **Total** | **$1,518.8M** | **$1,552.4M** | Segment Operating Profit (Q2 2025 vs Q2 2024) | Segment | June 27, 2025 | June 28, 2024 | | :-------------------------- | :------------- | :------------- | | Intelligent Operating Solutions | $166.7M | $173.2M | | Precision Technologies | $93.2M | $115.3M | | Advanced Healthcare Solutions | $39.1M | $40.2M | | **Total** | **$222.2M** | **$301.8M** | Segment Operating Margin (Q2 2025 vs Q2 2024) | Segment | June 27, 2025 | June 28, 2024 | | :-------------------------- | :------------- | :------------- | | Intelligent Operating Solutions | 24.7% | 25.6% | | Precision Technologies | 17.8% | 20.9% | | Advanced Healthcare Solutions | 12.2% | 12.4% | | **Total** | **14.6%** | **19.4%** | [Consolidated Condensed Balance Sheets](index=8&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) As of June 27, 2025, Fortive's total assets and liabilities increased, with a significant rise in cash and equivalents and a reduction in long-term debt Consolidated Condensed Balance Sheets (As of June 27, 2025 vs December 31, 2024) | Metric | June 27, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :------------- | | **Assets** | | | | Cash and Equivalents | $1,832.7M | $813.3M | | Total Current Assets | $3,683.4M | $2,592.3M | | Goodwill | $10,403.7M | $10,156.0M | | Total Assets | $18,244.2M | $17,016.1M | | **Liabilities and Equity** | | | | Current Portion of Long-Term Debt | $1,905.7M | $376.2M | | Total Current Liabilities | $3,745.6M | $2,238.4M | | Long-Term Debt | $2,906.5M | $3,331.1M | | Total Shareholders' Equity | $10,389.2M | $10,195.6M | | Total Liabilities and Equity | $18,244.2M | $17,016.1M | [Consolidated Condensed Statements of Cash Flows](index=9&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) In H1 2025, Fortive's operating cash flow slightly decreased, but financing cash flow turned positive due to borrowings and distributions, significantly increasing cash and equivalents Consolidated Condensed Statements of Cash Flows (First Half 2025 vs First Half 2024) | Metric | June 27, 2025 (Six Months) | June 28, 2024 (Six Months) | | :-------------------------- | :----------------------- | :----------------------- | | Net Cash Provided by Operating Activities | $552.9M | $565.6M | | Net Cash Used in Investing Activities | $(50.8)M | $(1,782.2)M | | Net Cash Provided by (Used in) Financing Activities | $509.3M | $(15.1)M | | Net Change in Cash and Equivalents | $1,019.4M | $(1,244.7)M | | Cash and Equivalents, End of Period | $1,832.7M | $644.1M | [Financial Measures Reflecting Ralliant as Discontinued Operations](index=10&type=section&id=Financial%20Measures%20Reflecting%20Ralliant%20as%20Discontinued%20Operations) This section presents Fortive's financial results with Ralliant reclassified as discontinued operations, offering a clearer view of continuing business performance [Basis of Presentation](index=10&type=section&id=Basis%20of%20Presentation) This section presents Fortive's financial information on a continuing operations basis, with Ralliant classified as discontinued operations, retrospectively reflected in future filings - This section presents Fortive's financial information on a continuing operations basis, with **Ralliant classified as discontinued operations**[26](index=26&type=chunk) - Reporting of discontinued operations will be retrospectively reflected in future company filings but will not revise or restate any historical financial statements previously filed with the SEC[26](index=26&type=chunk) [Unaudited Consolidated Condensed Statement of Earnings (Continuing Operations)](index=11&type=section&id=Unaudited%20Consolidated%20Condensed%20Statement%20of%20Earnings%20(Continuing%20Operations)) After reclassifying Ralliant, Fortive's continuing operations achieved stable sales in Q2 and H1 2025, with growth in net earnings and diluted EPS Unaudited Consolidated Condensed Statement of Earnings (Continuing Operations, Q2 2025 vs Q2 2024) | Metric | June 27, 2025 (Three Months) | June 28, 2024 (Three Months) | | :-------------------------- | :----------------------- | :----------------------- | | Sales | $1,016.4M | $1,020.2M | | Net Earnings from Continuing Operations | $111.6M | $112.0M | | Diluted Net Earnings per Share from Continuing Operations | $0.33 | $0.32 | | Net Earnings from Discontinued Operations | $55.0M | $83.1M | | Total Net Earnings | $166.6M | $195.1M | Unaudited Consolidated Condensed Statement of Earnings (Continuing Operations, First Half 2025 vs First Half 2024) | Metric | June 27, 2025 (Six Months) | June 28, 2024 (Six Months) | | :-------------------------- | :----------------------- | :----------------------- | | Sales | $2,009.5M | $2,004.4M | | Net Earnings from Continuing Operations | $224.2M | $177.8M | | Diluted Net Earnings per Share from Continuing Operations | $0.65 | $0.50 | | Net Earnings from Discontinued Operations | $114.3M | $224.7M | | Total Net Earnings | $338.5M | $402.5M | [Segment Information (Continuing Operations)](index=12&type=section&id=Segment%20Information%20(Continuing%20Operations)) Under continuing operations, Intelligent Operating Solutions achieved sales and operating profit growth in Q2 and H1 2025, while Advanced Healthcare Solutions saw slight declines Segment Sales (Continuing Operations, Q2 2025 vs Q2 2024) | Segment | June 27, 2025 | June 28, 2024 | | :-------------------------- | :------------- | :------------- | | Intelligent Operating Solutions | $696.9M | $696.6M | | Advanced Healthcare Solutions | $319.5M | $323.6M | | **Total** | **$1,016.4M** | **$1,020.2M** | Segment Operating Profit (Continuing Operations, Q2 2025 vs Q2 2024) | Segment | June 27, 2025 | June 28, 2024 | | :-------------------------- | :------------- | :------------- | | Intelligent Operating Solutions | $170.8M | $173.4M | | Advanced Healthcare Solutions | $35.8M | $35.7M | | **Total** | **$169.8M** | **$182.3M** | Segment Operating Margin (Continuing Operations, Q2 2025 vs Q2 2024) | Segment | June 27, 2025 | June 28, 2024 | | :-------------------------- | :------------- | :------------- | | Intelligent Operating Solutions | 24.5% | 24.9% | | Advanced Healthcare Solutions | 11.2% | 11.0% | | **Total** | **16.7%** | **17.9%** | [Unaudited Consolidated Condensed Balance Sheet (Continuing Operations)](index=13&type=section&id=Unaudited%20Consolidated%20Condensed%20Balance%20Sheet%20(Continuing%20Operations)) After reclassifying Ralliant, Fortive's continuing operations balance sheet shows a significant increase in cash and equivalents and a substantial reduction in long-term debt Unaudited Consolidated Condensed Balance Sheet (Continuing Operations, As of June 27, 2025 vs December 31, 2024) | Metric | June 27, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :------------- | | **Assets** | | | | Cash and Equivalents | $1,827.4M | $808.1M | | Current Assets of Discontinued Operations | $650.9M | $619.5M | | Total Assets | $18,244.2M | $17,016.1M | | **Liabilities and Equity** | | | | Current Portion of Long-Term Debt | $1,905.7M | $376.2M | | Current Liabilities of Discontinued Operations | $538.1M | $568.5M | | Long-Term Debt | $1,758.1M | $3,331.1M | | Long-Term Liabilities of Discontinued Operations | $1,579.7M | $403.8M | | Total Shareholders' Equity | $10,389.2M | $10,195.6M | | Total Liabilities and Equity | $18,244.2M | $17,016.1M | [Unaudited Consolidated Condensed Statement of Cash Flows (Continuing Operations)](index=14&type=section&id=Unaudited%20Consolidated%20Condensed%20Statement%20of%20Cash%20Flows%20(Continuing%20Operations)) After reclassifying Ralliant, Fortive's continuing operations in H1 2025 maintained stable operating cash flow, reduced investing outflows, and saw financing cash flow turn positive, increasing cash and equivalents Unaudited Consolidated Condensed Statement of Cash Flows (Continuing Operations, First Half 2025 vs First Half 2024) | Metric | June 27, 2025 (Six Months) | June 28, 2024 (Six Months) | | :-------------------------- | :----------------------- | :----------------------- | | Operating Cash Flow from Continuing Operations | $396.8M | $396.1M | | Operating Cash Flow from Discontinued Operations | $156.1M | $169.5M | | Investing Cash Outflow from Continuing Operations | $(35.1)M | $(46.5)M | | Investing Cash Outflow from Discontinued Operations | $(15.7)M | $(1,735.7)M | | Financing Cash Flow from Continuing Operations | $512.5M | $(15.1)M | | Financing Cash Flow from Discontinued Operations | $(3.2)M | $—M | | Net Change in Cash and Equivalents | $1,019.4M | $(1,244.7)M | | Cash and Equivalents, End of Period | $1,832.7M | $644.1M | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=15&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of GAAP to non-GAAP financial measures, offering transparency into adjustments for clearer business performance [Total Fortive – Adjusted Net Earnings and Adjusted Diluted Net Earnings Per Share](index=19&type=section&id=Total%20Fortive%20%E2%80%93%20Adjusted%20Net%20Earnings%20and%20Adjusted%20Diluted%20Net%20Earnings%20Per%20Share) Total Fortive's adjusted net earnings and diluted EPS are reconciled by excluding non-recurring items like acquisition amortization, separation expenses, and discrete tax charges Total Fortive – Adjusted Net Earnings and Adjusted Diluted Net Earnings Per Share (Q2 2025 vs Q2 2024) | Metric | June 27, 2025 (Three Months) | June 28, 2024 (Three Months) | | :------------------------------------------------ | :----------------------- | :----------------------- | | Net Earnings (GAAP) | $166.6M | $195.1M | | Diluted Net Earnings per Share (GAAP) | $0.49 | $0.55 | | Total Adjustments (Pre-Tax) | $162.8M | $149.7M | | Tax Impact | $(24.9)M | $(15.7)M | | Ralliant Separation Discrete Tax Charges | $1.9M | $—M | | Adjusted Net Earnings (Non-GAAP) | $306.4M | $329.1M | | Adjusted Diluted Net Earnings per Share (Non-GAAP) | $0.90 | $0.93 | [Core Revenue Growth Reflecting Ralliant as Discontinued Operations](index=19&type=section&id=Core%20Revenue%20Growth%20Reflecting%20Ralliant%20as%20Discontinued%20Operations) After reclassifying Ralliant, Fortive's continuing operations reported **-0.7%** core revenue growth in Q2 2025, reflecting business performance post-separation and currency impacts Core Revenue Growth (Reflecting Ralliant as Discontinued Operations, Q2 2025 vs Q2 2024) | Metric | June 27, 2025 vs Prior Year Period | June 28, 2024 vs Prior Year Period | | :-------------------------- | :-------------------------- | :-------------------------- | | Total Revenue Growth (GAAP) | (0.4)% | 3.7% | | Impact of Divestitures | 0.4% | (0.8)% | | Impact of Currency | (0.7)% | 1.0% | | Core Revenue Growth (Non-GAAP) | (0.7)% | 3.9% | [EBITDA and Adjusted EBITDA Margin Reflecting Ralliant as Discontinued Operations](index=20&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20Margin%20Reflecting%20Ralliant%20as%20Discontinued%20Operations) After reclassifying Ralliant, Fortive's continuing operations reported adjusted EBITDA of **$288.4 million** and an adjusted EBITDA margin of **28.4%** in Q2 2025 EBITDA and Adjusted EBITDA Margin (Reflecting Ralliant as Discontinued Operations, Q2 2025 vs Q2 2024) | Metric | June 27, 2025 (Three Months) | June 28, 2024 (Three Months) | | :------------------------------------------------ | :----------------------- | :----------------------- | | Revenue (GAAP) | $1,016.4M | $1,020.2M | | Net Earnings from Continuing Operations (GAAP) | $111.6M | $112.0M | | EBITDA from Continuing Operations (Non-GAAP) | $280.9M | $281.4M | | Total Adjustments (Pre-Tax) | $8.1M | $9.9M | | Adjusted EBITDA from Continuing Operations (Non-GAAP) | $288.4M | $291.3M | | Net Earnings Margin from Continuing Operations | 11.0% | 11.0% | | Adjusted EBITDA Margin from Continuing Operations (Non-GAAP) | 28.4% | 28.6% | [Continuing Operations: Segment Adjusted EBITDA, Segment Adjusted EBITDA Margin](index=21&type=section&id=Continuing%20Operations:%20Segment%20Adjusted%20EBITDA,%20Segment%20Adjusted%20EBITDA%20Margin) Intelligent Operating Solutions reported adjusted EBITDA of **$235.7 million** and **33.8%** margin, while Advanced Healthcare Solutions reported **$86.1 million** and **26.9%** margin in Q2 2025 Continuing Operations: Segment Adjusted EBITDA, Segment Adjusted EBITDA Margin (Q2 2025 vs Q2 2024) | Intelligent Operating Solutions | June 27, 2025 | June 28, 2024 | | :---------------------------- | :------------- | :------------- | | Revenue (GAAP) | $696.9M | $696.6M | | Operating Profit (GAAP) | $170.8M | $173.4M | | Adjusted EBITDA (Non-GAAP) | $235.7M | $232.0M | | Adjusted EBITDA Margin (Non-GAAP) | 33.8% | 33.3% | | Advanced Healthcare Solutions | June 27, 2025 | June 28, 2024 | | :---------------------------- | :------------- | :------------- | | Revenue (GAAP) | $319.5M | $323.6M | | Operating Profit (GAAP) | $35.8M | $35.7M | | Adjusted EBITDA (Non-GAAP) | $86.1M | $86.1M | | Adjusted EBITDA Margin (Non-GAAP) | 26.9% | 26.6% | [Adjusted Net Earnings from Continuing Operations and Adjusted Diluted Net Earnings Per Share from Continuing Operations](index=22&type=section&id=Adjusted%20Net%20Earnings%20from%20Continuing%20Operations%20and%20Adjusted%20Diluted%20Net%20Earnings%20Per%20Share%20from%20Continuing%20Operations) After reclassifying Ralliant, Fortive's continuing operations reported adjusted net earnings of **$197.8 million** and adjusted diluted EPS of **$0.58** in Q2 2025 Adjusted Net Earnings from Continuing Operations and Adjusted Diluted Net Earnings Per Share from Continuing Operations (Q2 2025 vs Q2 2024) | Metric | June 27, 2025 (Three Months) | June 28, 2024 (Three Months) | | :------------------------------------------------ | :----------------------- | :----------------------- | | Net Earnings from Continuing Operations (GAAP) | $111.6M | $112.0M | | Diluted Net Earnings per Share from Continuing Operations (GAAP) | $0.33 | $0.32 | | Total Adjustments (Pre-Tax) | $99.1M | $102.4M | | Tax Impact | $(12.9)M | $(15.8)M | | Adjusted Net Earnings from Continuing Operations (Non-GAAP) | $197.8M | $198.6M | | Adjusted Diluted Net Earnings per Share from Continuing Operations (Non-GAAP) | $0.58 | $0.56 | [Free Cash Flow from Continuing Operations - Trailing Twelve Months](index=22&type=section&id=Free%20Cash%20Flow%20from%20Continuing%20Operations%20-%20Trailing%20Twelve%20Months) Fortive's continuing operations generated **$938.9 million** in free cash flow for the trailing twelve months ended June 27, 2025, a **13.7% increase** year-over-year Free Cash Flow from Continuing Operations – Trailing Twelve Months (As of June 27, 2025 vs June 28, 2024) | Metric | As of June 27, 2025 (Trailing Twelve Months) | As of June 28, 2024 (Trailing Twelve Months) | | :------------------------------------------------ | :--------------------------------- | :--------------------------------- | | Operating Cash Flow (GAAP) | $1,029.2M | $912.3M | | Less: Capital Expenditures (GAAP) | $(90.3)M | $(85.9)M | | Free Cash Flow (Non-GAAP) | $938.9M | $826.4M |

Core Viewpoint - The market anticipates a year-over-year decline in Fortive's earnings due to lower revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Fortive is expected to report quarterly earnings of $0.60 per share, reflecting a year-over-year decrease of 35.5% [3]. - Revenue projections stand at $1.01 billion, down 35.1% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 33.75% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate matches the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [12]. Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [10]. - Fortive currently holds a Zacks Rank of 5, complicating predictions of an earnings beat [12]. Historical Performance - In the last reported quarter, Fortive met the expected earnings of $0.85 per share, resulting in no surprise [13]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [14]. Conclusion - Fortive does not appear to be a strong candidate for an earnings beat, and investors should consider other factors before making decisions [17].

Core Insights - Fluke Reliability has integrated its eMaint CMMS with Watchman Services, enhancing predictive maintenance strategies for manufacturers by reducing downtime and optimizing maintenance costs [1][4][10] Group 1: Integration Benefits - The integration allows maintenance teams to connect asset condition monitoring with maintenance execution, leading to improved uptime and reduced costs [1][4] - Real-time vibration data and recommendations from Watchman Services are now directly accessible in eMaint, facilitating faster insights and decision-making [2][4] Group 2: Challenges Addressed - Unplanned downtime is highlighted as a significant challenge in industrial operations, leading to increased maintenance costs and reduced overall equipment effectiveness (OEE) [3] - The integration aims to eliminate data silos and accelerate decision-making, enabling maintenance teams to act before failures occur [4][9] Group 3: Key Features - Watchman Services monitors machine conditions and sends critical information on faults to eMaint, creating tickets for facility managers to resolve issues swiftly [4] - The integration supports proactive maintenance strategies by predicting machine failures and optimizing spare part needs, which is crucial in the current supply chain environment [9]

Core Insights - Fluke Corporation has appointed Parker Burke as President and Group President of Fortive's Connected Reliability Group effective July 7, 2025, to enhance technology and services aimed at reducing downtime and increasing operational resilience [1][4]. Company Overview - Fluke Corporation, founded in 1948, is a leader in compact, professional electronic test tools and software for measuring and condition monitoring, serving technicians, engineers, electricians, and maintenance managers [7]. - Fluke is a wholly owned subsidiary of Fortive Corporation, which was formed in 2016 after Danaher spun off several businesses [8]. Leadership Background - Parker Burke has 15 years of leadership experience within Fortive, previously serving as Group President of Fortive's Environmental Health & Safety Group, where he advanced innovation in connected safety and environmental health software [2][4]. - Burke is recognized for embedding the Fortive Business System across teams and fostering a culture of continuous improvement, with prior leadership roles at Gilbarco Veeder-Root and Anderson-Negele [5]. Strategic Focus - Under Burke's leadership, Fluke aims to scale AI-driven solutions, precision measurement, and connected workflows to transition customers from reactive to predictive operations [4]. - Burke emphasizes the importance of Fluke's heritage of precision, safety, and innovation in addressing critical challenges faced by the industrial workforce [6].