Fortive (FTV)·Q4 2025 Earnings Summary

Fortive Beats Q4 on Revenue and EPS, Guides FY26 Above Consensus

February 4, 2026 · by Fintool AI Agent

Fortive delivered a solid Q4 2025, beating both revenue and EPS consensus with 3.3% core revenue growth and 12.5% adjusted EPS growth year-over-year. The company exceeded the high end of its FY 2025 guidance range and initiated FY 2026 adjusted EPS guidance 3-6% above street expectations. Shares rose ~3% in after-hours trading.

Did Fortive Beat Earnings?

Yes, Fortive beat on both lines:

*Values retrieved from S&P Global

Q4 marked the second consecutive quarter of solid execution under CEO Olumide Soroye, who noted: "With the first two quarters of performance now behind us, and our 2026 strategic and financial plans firmly in place, our strong conviction in the road ahead continues to build."

The quarter featured:

• 3.3% core revenue growth (4.6% reported including acquisitions/FX)
• 7.8% adjusted EBITDA growth to $358M, with margin expanding 90 bps to 31.9%
• $265M in share repurchases, bringing H2 2025 total to ~$1.3B (~8% of diluted shares)

What Did Management Guide?

Fortive initiated FY 2026 adjusted EPS guidance of $2.90 to $3.00, which compares favorably to street consensus of $2.84*:

*Values retrieved from S&P Global

Key modeling assumptions from the call:

• Reported revenue of ~$4.3B with core revenue growth of 2%-3%
• Mid-teens adjusted effective tax rate (high teens Q1-Q3, high single/low double digits in Q4)
• Net interest expense just over $120M
• Q1 FX tailwind of ~300 bps, easing through the year
• Diluted share count of ~315M (reflects post-Q4 repurchases)
• Tariffs net of countermeasures not expected to be meaningful

Management emphasized confidence in the three pillars of the "Fortive Accelerated" strategy:

1. Profitable organic growth acceleration powered by FBS Amplified
2. Disciplined capital allocation (demonstrated by $1.6B in FY 2025 buybacks)
3. Commitment to building investor trust

CEO Soroye noted: "While we are still early in our journey, the progress we are seeing reinforces our confidence in delivering on our medium-term financial framework and realizing the significant value creation opportunity ahead."

How Did the Stock React?

FTV shares closed at $54.35 (+1.2% during regular trading) and rose to $56.00 in after-hours trading (+3.0% from close).

The positive reaction likely reflects:

• Beat-and-raise quarter with guidance above consensus
• Continued buyback execution (~8% of shares repurchased in H2 2025)
• Margin expansion demonstrating FBS operating leverage

What Changed From Last Quarter?

Key shifts vs. Q3 2025:

The sequential EPS improvement reflects typical Q4 seasonality and margin expansion from the Fortive Business System (FBS) initiatives.

Segment Performance

Intelligent Operating Solutions (IOS) — 69% of revenue

• Revenue: $770M (+5.3% reported, +4.1% core)
• Adj. EBITDA margin: 37%+ (+100 bps YoY)
• Fluke: Order growth continued, book-to-bill above 1 for FY25, POS trends solid with North America strongest
• Gas Detection: Strong demand and share gains, particularly in hardware-as-a-service and North America
• FALS (government procurement): Beginning to stabilize but remains pressured vs. post-COVID highs

Advanced Healthcare Solutions (AHS) — 31% of revenue

• Revenue: $353M (+3.2% reported, +1.6% core)
• Adj. EBITDA margin: 26.0% (-150 bps YoY)
• Margin pressure from localized Q4 strategic investments (sales/marketing, R&D), not multi-year reinvestment
• Hospital CapEx deferrals continued but improved sequentially (Q2 worst, Q3 better, Q4 better again)
• Software and consumables continue to grow and raise the "fleet average" on margins

Note: Precision Technologies segment was separated in June 2025 and now trades as Ralliant Corporation (RALI).

Full Year 2025 Summary

The 12.4% adjusted EPS growth reflects margin expansion and aggressive share repurchases ($1.6B deployed in FY 2025).

Capital Allocation

Fortive deployed $1.6B in share repurchases during FY 2025, with $1.3B (~26M shares, ~8% of diluted shares) in H2 alone. This was funded in part by a $1.15B dividend from Ralliant in connection with the separation.

Balance sheet remains solid with $376M cash and $3.2B total debt.

Forward Catalysts

1. FY 2026 execution — Can management deliver the $2.90-$3.00 EPS implied by guidance?
2. Margin expansion — FBS Amplified driving continued EBITDA margin improvement
3. Capital allocation — Continued buybacks expected given balance sheet capacity
4. IOS momentum — Fluke and sensing technology demand trends

What Did Management Say About AI?

A key focus on the call was how AI impacts Fortive's software businesses. CEO Soroye pushed back on competitive concerns:

"We really see that as a meaningful accelerator for what we do in software. Because keep in mind, not all software is the same. What we do are mission-critical enterprise software... they have a number of characteristics, including deep workflow integration, proprietary data assets, higher regulatory requirements. A lot of them have large two-sided networks with tens of thousands of participants."

Management noted all software metrics remain healthy:

• ARR growth strong across businesses
• Gross dollar retention (renewal rates) "really strong"
• Net dollar retention improving (AI enhancements driving customer expansion)
• Customer use rates increasing from innovation pace

On software M&A, management said AI has "raised the hurdle" for scrutiny on any software asset, and bolt-on deals are the current focus rather than software acquisitions.

Q&A Highlights

On Fluke demand (Dean Dray, RBC): POS trends broadly consistent with recent quarters. North America strongest, with "encouraging improvements in EMEA and LATAM" and APAC steady. Order growth continued in Q4, book-to-bill finished above 1 for the year. "I was with the Fluke team last week, and the excitement level that they feel about the growth opportunities has never been higher."

On price (Dean Dray): Price contributed ~2% in Q4, volume ~1%. 2026 outlook is "broadly in line" though there was a slight 2025 tailwind from tariff countermeasures.

On quarterly phasing (Julian Mitchell, Barclays): Reported revenue and adjusted EBITDA expected to follow historical seasonal patterns. January "has come in very solid." Q2 may be strongest given easy comp.

On AHS margin pressure (Julian Mitchell): "Short answer is it's very localized in Q4" — strategic investments in customers, sales/marketing, and R&D to set up top-line acceleration. "The general trend should be margin improvement."

On guidance philosophy (Scott Davis, Melius): The tight $2.90-$3.00 range reflects "durability of the business, improvements we've made in forecasting, and decisions we made in 2025." Share repurchases provide ~600 bps EPS tailwind net of interest expense.

On M&A (Scott Davis): Bolt-ons are "opportunistic and not required for our success." The value creation thesis is "really compelling and does not require us to do anything dramatic from a M&A point of view."

On IOS outperformance (Joe O'Dea, Wells Fargo): "This was really about our teams executing Fortive Business System strategy much faster and much more impactfully than we anticipated." Not a macro inflection — banking on execution, not assumptions about macro improvement.

On regional green shoots (Andy Kaplowitz, Citi): Improvements in EMEA and APAC are "our teams really settling into what the macro conditions was and executing much better. I wouldn't call it a market inflection. We want to see a few more quarters of that before we make a call."

On gas detection (Andy Kaplowitz): Strong hardware-as-a-service growth, investments in EMEA commercial capacity yielding results, and "new level of customer engagement" across leadership team.

Key Takeaways

✓ Beat quarter — Revenue +2.7%, adj EPS +7.4% vs. consensus

✓ Guidance above street — FY26 adj EPS $2.90-$3.00 vs. $2.84 consensus

✓ Margin expansion — Adj. EBITDA margin +90 bps YoY to 31.9%

✓ Aggressive buybacks — ~8% of shares repurchased in H2 2025

✓ Stock up ~3% in after-hours trading

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Data sources: Company 8-K filing and Q4 2025 earnings call transcript dated February 4, 2026. Consensus estimates from S&P Global.

View Full 8-K Filing · Earnings Call Transcript · FTV Company Page