Financial Data and Key Metrics Changes - In Q4, the company reported total revenue of $1.1 billion, an increase of just over 4.5% year-over-year on a reported basis and just over 3% on a core basis [13] - Adjusted EBITDA for Q4 was $358 million, up about 8% year-over-year, with an adjusted EBITDA margin expanding approximately 100 basis points to nearly 32% [14][15] - Adjusted EPS for Q4 was $0.90, reflecting a 13% year-over-year increase, contributing to a full-year adjusted EPS of $2.71, which represented over 12% growth [15][21] Business Line Data and Key Metrics Changes - Intelligent Operating Solutions (IOS) segment revenue grew just over 5% on a reported basis, with core revenue growth of about 4%, driven by strong performance in professional instrumentation and gas detection products [16] - Advanced Healthcare Solutions (AHS) segment revenue was $353 million, growing approximately 3% year-over-year, with adjusted EBITDA of $92 million and an adjusted EBITDA margin of 26% [18][19] Market Data and Key Metrics Changes - North America continued to be the strongest growth driver, with encouraging improvements noted in Europe and Latin America, while APAC growth remained steady [13][16] - The company observed solid customer demand and strong commercial execution across all regions, with particular strength in professional instrumentation and gas detection [13][16] Company Strategy and Development Direction - The company is focused on executing the Fortive Accelerated Strategy, which includes three pillars: accelerating profitable organic growth, disciplined capital allocation, and building investor trust [5][8] - The company is committed to investing in organic growth, pursuing bolt-on M&A, and maintaining a modestly growing dividend to maximize medium to long-term shareholder value [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, initiating full-year adjusted EPS guidance of $2.90-$3.00, representing approximately 9% year-over-year growth at the midpoint [21] - The management highlighted strong execution and operational rigor, with a focus on delivering benchmark-beating shareholder returns [5][24] Other Important Information - The company executed an additional $265 million in share repurchases in Q4, bringing total repurchases for the second half of the year to $1.3 billion [8][19] - The company finished the year with a gross debt to adjusted EBITDA ratio of 2.6x, indicating a strong balance sheet and ample capacity for capital deployment [20] Q&A Session Summary Question: Insights on Fluke's performance - Management noted strong demand and order growth at Fluke, with North America being the strongest region and encouraging improvements in EMEA and LATAM [32][34] Question: Price contribution and guidance - Price contributed about 2% to growth in Q4, with volume contributing roughly 1% [35] Question: First quarter expectations - Management indicated that January has started solidly, and they expect reported revenue and adjusted EBITDA to follow historical trends [41][43] Question: AHS segment margin pressures - Management clarified that margin pressures in AHS were localized in Q4 due to strategic investments, with expectations for margin improvement moving forward [44][45] Question: IOS organic growth sources - Management attributed the strong IOS growth to effective execution of the Fortive Business System strategy, with solid demand in data center applications and defense [72][74] Question: AI enhancements in software - Management highlighted that AI is seen as an opportunity, with strong customer demand for AI-enabled enhancements in their software offerings [53][76] Question: Future growth expectations for gas detection - Management expressed confidence in the gas detection business, anticipating strong performance in 2026 due to effective execution and market demand [95]

Financial Data and Key Metrics Changes - In Q4, the company reported total revenue of $1.1 billion, an increase of just over 4.5% year-over-year on a reported basis and just over 3% on a core basis [13] - Adjusted EBITDA for Q4 was $358 million, up about 8% year-over-year, with an adjusted EBITDA margin expanding approximately 100 basis points to nearly 32% [14] - Adjusted EPS for Q4 was $0.90, marking a 13% increase year-over-year, contributing to a full-year adjusted EPS of $2.71, which represented year-over-year growth of just over 12% [15][7] - The company generated about $315 million of free cash flow in Q4 and approximately $930 million for the full year, with free cash flow conversion on adjusted net income remaining nicely over 100% [20] Business Line Data and Key Metrics Changes - Intelligent Operating Solutions (IOS) segment revenue grew just over 5% on a reported basis, with core revenue growth of about 4%, driven by strong performance in professional instrumentation and gas detection products [16] - Advanced Healthcare Solutions (AHS) segment revenue grew approximately 3% year-over-year, with adjusted EBITDA in this segment at $92 million and an adjusted EBITDA margin of 26% [19] - Recurring revenue grew faster than consolidated revenue, driven by strength in Fluke's maintenance software and AI-enhanced software capabilities across IOS and AHS segments [10] Market Data and Key Metrics Changes - North America continued to be the strongest growth driver, with solid growth across all regions, including steady growth in APAC and an acceleration in Europe [13] - Latin American sales picked up pace, driven by strong performance in professional instrumentation [14] - The company noted early signs of improvement in Europe and positive trends in Latin America and Asia Pacific [16] Company Strategy and Development Direction - The company is focused on three strategic pillars: accelerating profitable organic growth, disciplined capital allocation, and building investor trust, aiming for benchmark-beating shareholder returns [5][8] - The company is committed to investing in organic growth, pursuing bolt-on M&A, and maintaining a modestly growing dividend [11] - The Fortive Accelerated Strategy is being diligently executed, with a focus on innovation and targeted investments in high-growth verticals [9][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, initiating full-year 2026 adjusted EPS guidance of $2.90-$3.00, representing approximately 9% year-over-year growth at the midpoint [21] - The company is confident in its ability to execute its strategy and deliver strong performance for shareholders, despite recognizing that there is more work to be done [25][24] - Management highlighted the importance of customer engagement and the positive impact of strategic investments on future growth [24][19] Other Important Information - The company executed an additional $265 million of share repurchases in Q4, bringing total second-half repurchases to $1.3 billion [8] - The balance sheet remains strong, finishing the year at 2.6x gross debt to adjusted EBITDA, with ample capacity for capital deployment priorities in 2026 [20] Q&A Session Summary Question: Insights on Fluke's performance and demand - Management noted strong demand in Fluke, with North America as the strongest region and encouraging improvements in EMEA and LATAM, with order growth continuing in Q4 [32][34] Question: Price contribution and guidance - Price contributed about 2% to growth in Q4, with volume contributing about 1%, and expectations for 2026 are broadly in line with this [35][36] Question: First quarter expectations and organic sales growth - Management indicated that Q1 is expected to follow historical patterns, with organic sales growth anticipated in the 2%-3% range for the full year [41][42] Question: AHS segment margin pressures - Management clarified that margin pressures in AHS were localized in Q4 due to strategic investments, with expectations for margin improvement moving forward [44][45] Question: IOS organic growth sources - The strong performance in IOS was attributed to effective execution of the Fortive Business System strategy, with solid demand in data center applications and defense [72][73] Question: AI enhancements in software businesses - Management highlighted that AI is seen as an opportunity, with strong customer demand for AI-enabled enhancements driving growth and improving customer experience [53][54] Question: Future growth expectations for gas detection - Management expressed confidence in the gas detection business, anticipating strong performance in 2026 due to effective execution and targeted investments [95][96]

Financial Data and Key Metrics Changes - In Q4, total revenue reached $1.1 billion, reflecting a year-over-year increase of just over 4.5% on a reported basis and over 3% on a core basis [12] - Adjusted EBITDA for Q4 was $358 million, up about 8% year-over-year, with an adjusted EBITDA margin expanding approximately 100 basis points to nearly 32% [13][14] - Adjusted EPS for Q4 was $0.90, marking a 13% increase year-over-year, contributing to a full-year adjusted EPS of $2.71, which represented over 12% growth [14][19] Business Line Data and Key Metrics Changes - Intelligent Operating Solutions (IOS) segment revenue grew just over 5% on a reported basis, with core revenue growth of about 4%, driven by strong performance in professional instrumentation and gas detection [15] - Advanced Healthcare Solutions (AHS) segment revenue grew approximately 3% year-over-year, with adjusted EBITDA in this segment at $92 million and an adjusted EBITDA margin of 26% [17][18] Market Data and Key Metrics Changes - North America continued to be the strongest growth driver, with encouraging signs of improvement in Europe and Latin America [12][15] - APAC growth remained steady, while Europe showed acceleration from Q3, indicating potential positive trends [12][13] Company Strategy and Development Direction - The company is focused on executing the Fortive Accelerated Strategy, which includes three pillars: accelerating profitable organic growth, disciplined capital allocation, and building investor trust [4][10] - The company is initiating full-year 2026 adjusted EPS guidance of $2.90-$3.00, representing approximately 9% year-over-year growth at the midpoint [6][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, highlighting strong execution and growth acceleration in the second half of 2025 [5][24] - The company is committed to maintaining a disciplined approach to capital allocation, with a focus on organic growth and targeted M&A opportunities [10][24] Other Important Information - The company executed an additional $265 million in share repurchases in Q4, bringing total repurchases for the second half of the year to $1.3 billion [6][18] - Free cash flow for Q4 was approximately $315 million, with full-year free cash flow at about $930 million, maintaining a conversion rate over 100% [14][19] Q&A Session Summary Question: Insights on Fluke's performance and demand - Management noted strong performance in Fluke, with North America as the strongest region and encouraging improvements in EMEA and LATAM, indicating solid demand overall [30][32] Question: Price contribution and guidance - Price contributed about 2% to growth in the quarter, with volume contributing roughly 1% [34] Question: First quarter expectations and organic sales growth - Management indicated that they expect reported revenue and adjusted EBITDA to follow historical trends, with a positive outlook for January [40][42] Question: AHS segment margin pressures - Management clarified that margin pressures in AHS were localized in Q4 due to strategic investments, with expectations for margin improvement moving forward [43][44] Question: IOS organic growth sources - The strong performance in IOS was attributed to effective execution of the Fortive Business System strategy, with all elements contributing positively [71][72] Question: AI enhancements in software businesses - Management highlighted that AI is seen as a meaningful accelerator for their software offerings, with strong customer demand for AI-enabled enhancements [52][53] Question: Future growth expectations for gas detection - Management expressed confidence in the gas detection business, anticipating strong performance in 2026 due to effective execution and market demand [94]