Fortive Corporation FY Conference Summary Company Overview - **Company**: Fortive Corporation (NYSE: FTV) - **Date of Conference**: February 18, 2026 Key Points Industry and Market Environment - **Demand Environment**: Fortive exited 2025 with strong core growth across both segments, indicating a positive demand environment as they entered 2026 [2][5] - **Short-Cycle Business**: The company noted strength in its short-cycle business, particularly in North America, driven by data center and distributed energy spending [9] - **Government Spending**: Government-related business accounted for about 8% of total revenue in 2025, with stable conditions expected in 2026 despite previous strong spending post-COVID [18][21] Financial Performance - **Q4 Performance**: Q4 2025 performance exceeded expectations, with broad-based strength across segments and no significant one-time events affecting results [6][7] - **2026 Outlook**: The company does not anticipate dramatic improvements in conditions affecting growth but feels positive about the setup from 2025 [8][21] Segment Insights - **Fluke Segment**: Fluke is recognized for its strong brand and market share potential, with ongoing innovation and a growing recurring revenue stream (15% of Fluke's revenue) [11][15][17] - **FAL Growth**: The FAL platform is expected to grow through innovation and commercial expansion, with a focus on capturing deferred maintenance spending from government agencies [22][29] - **AHS Segment**: The ASP business faced challenges in 2025 but is expected to improve in 2026 due to increased focus on innovation and customer loyalty [63][70] Strategic Initiatives - **Fortive Acceleration Strategy**: The company is focused on executing its Fortive Acceleration strategy to outperform market growth, emphasizing innovation, commercial investments, and recurring customer value [10][28] - **AI Integration**: Fortive has integrated AI capabilities across its businesses, enhancing customer operations and product development [62] Financial Management - **Cost Structure**: The company has a clear understanding of its cost structure, with no surprises post-spin-off from Ralliant, and is focused on margin expansion of 50-100 basis points annually [78][80] - **Capital Allocation**: Fortive emphasizes disciplined capital allocation, prioritizing organic growth investments while remaining open to small acquisitions that enhance existing brands [86][92] Market Position and Future Outlook - **Software Assets**: Fortive's software businesses are well-positioned with unique data assets and network effects, making them resilient in an AI-driven market [34][39] - **Acquisition Strategy**: The company is looking for bolt-on acquisitions that can help existing brands grow faster, with a high bar for software acquisitions due to current market conditions [92][98] Customer Engagement - **Customer Health Metrics**: Fortive monitors customer health scores and adoption rates of AI use cases to gauge satisfaction and potential churn [50][56] Additional Insights - **Geographic Performance**: North America remains the strongest region for Fortive, with signs of improvement in EMEA and steady performance in APAC [9] - **Recurring Revenue Growth**: The company is seeing double-digit growth in recurring revenue streams, particularly in the Fluke segment [15][17] This summary encapsulates the key insights and strategic directions discussed during the Fortive Corporation FY Conference, highlighting the company's performance, market conditions, and future growth strategies.

Company Overview - Fortive Corporation (FTV) is valued at a market cap of $16.5 billion and operates as a diversified industrial technology company, providing professional and engineered products, software, and services [1] - The company is based in Everett, Washington, and offers connected workflow solutions, including professional instrumentation, industrial automation, sensing, analytics software, and healthcare workflow tools under notable brands such as Fluke, Tektronix, Accruent, ServiceChannel, and Landauer [1] Market Position - FTV is classified as a "large-cap stock" due to its market cap exceeding $10 billion, highlighting its size, influence, and dominance in the scientific and technical instruments industry [2] - The company's portfolio includes well-known brands like Fluke, Industrial Scientific, Accruent, and Gordian, with offerings in industrial safety, productivity software, facility management, and healthcare compliance solutions [2] Stock Performance - Fortive's stock has experienced a significant decline, dropping 41.7% from its 52-week high of $83.32 reached on February 20, and has plunged 30.1% over the past three months, underperforming the broader Dow Jones Industrial Average, which rose by 8.7% during the same period [3] - Over the past 52 weeks, FTV's stock has declined by 34%, while the Dow Jones Industrial Average has increased by 10.9% [4] - Year-to-date, shares of FTV are down 35.3%, compared to a 7.9% uptick in the Dow Jones Industrial Average [4] Financial Performance - In the second quarter, Fortive reported revenue of approximately $1.02 billion from continuing operations, reflecting a slight year-over-year decline, with core revenue also slipping marginally [5] - Despite the modest sales decline, the company's profitability remained steady, with adjusted EPS improving to $0.58 from $0.56 in the prior year [5] Competitive Landscape - Fortive has underperformed compared to its rival, Cognex Corporation (CGNX), which saw a stock surge of 14.2% over the past 52 weeks and 23.2% on a year-to-date basis [6]