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.