What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-30 compared with 2025-05-01 · 166 added, 146 removed, 232 unchanged (57% of the section changed)

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projections of revenue, expenses, profit, profit margins, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other financial measures;

management’s plans and strategies for future operations, including statements relating to anticipated operating performance, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions, divestitures, strategic opportunities, securities offerings, stock repurchases, dividends and executive compensation;

impact of government actions, including tariffs, other trade policies, government spending and tax laws;

growth, declines and other trends in markets we sell into, including the expected impact of trade and tariff policies;

our plans to separate into two independent, publicly traded companies;

new or modified laws, regulations and accounting pronouncements;

impact of climate-related events or transition activities;

outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities;

foreign currency exchange rates and fluctuations in those rates;

impact of changes to tax laws;

general economic and capital markets conditions, including expected impact of inflation or interest rate changes;

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• Conditions in the global economy, the markets we serve, and the financial markets may adversely affect our business and financial results.

• If we cannot adjust our manufacturing capacity, supply chain management or the purchases required for our manufacturing activities to reflect changes in market conditions, customer demand and supply chain disruptions, our

profitability may suffer.

In addition, our reliance upon sole or limited sources of supply for certain materials, components, and services could cause production interruptions, delays and inefficiencies.

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Risk Related to Our Acquisitions, Investments, and Dispositions

• Our plans to separate into two independent, publicly traded companies may not be completed on the currently contemplated timeline or at all and may not achieve the intended benefits, including the anticipated tax treatment.

• Any inability to consummate acquisitions at our anticipated rate and at appropriate prices, and to make appropriate investments that support our long-term strategy, could negatively impact our growth rate and stock price.

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• Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we have sold could adversely affect our financial results.

• Potential indemnification liabilities to Vontier Corporation (“Vontier”) pursuant to the separation agreement could materially and adversely affect our businesses, financial condition, results of operations, and cash flows.

• Potential indemnification liabilities to Ralliant Corporation (“Ralliant”) and Vontier Corporation (“Vontier”) pursuant to the respective separation agreements could materially and adversely affect our businesses, financial condition, results of operations, and cash flows.

Risk Related to Regulatory and Compliance Matters

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In addition, audits by tax authorities could result in additional tax payments for prior periods.

• We could incur significant liability if our separation from Danaher, our separation of our Automation and Specialty business or our separation of Vontier (collectively, the “Separation Transactions”) are determined to be a taxable transaction.

• We could incur significant liability if our separation from Danaher, our separation of our Automation and Specialty business, our separation of Ralliant, or our separation of Vontier (collectively, the “Separation Transactions”) is determined to be a taxable transaction.

• Changes in U.S.

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See “Item 1A.

Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and in this Quarterly Report on Form 10-Q for further discussion regarding reasons that actual results may differ materially from the results, developments, and business decisions contemplated by our forward-looking statements.

results, developments, and business decisions contemplated by our forward-looking statements.

Forward-looking statements speak only as of the date of the report, document, press release, webcast, call, materials or other communication in which they are made (or such earlier date as may be specified in such statement).

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Our individual businesses monitor key competitors and customers, including their sales, to the extent possible, to gauge relative performance and the outlook for the future.

As a result of our geographic and industry diversity, we face a variety of opportunities and challenges, including technological development in most of the markets we serve, the expansion and evolution of opportunities in high-growth markets, trends and costs associated with a global labor force, and consolidation of our competitors.

We define high-growth markets as developing markets of the world experiencing extended periods of accelerated growth in gross domestic product and infrastructure which include Eastern Europe, the Middle East, Africa, Latin America, and Asia with the exception of Japan and Australia.

As a result of our geographic and industry diversity, we face a variety of opportunities and challenges, including technological development in most of the markets we serve, the expansion and evolution of opportunities in growing markets, trends and costs associated with a global labor force, and consolidation of our competitors.

We operate in a highly competitive business environment in most markets, and our long-term growth and profitability will depend, in particular, on our ability to expand our business across geographies and market segments, identify, consummate, and integrate appropriate acquisitions, develop innovative and differentiated new products, services, and software, expand and improve the effectiveness of our sales force, continue to reduce costs and improve operating efficiency and quality, attract relevant talent and retain, grow, and empower our talented workforce, and effectively address the demands of an increasingly regulated environment.

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Segment Presentation

We operate and report our results in three segments, IOS, PT, and AHS, each of which is further described below.

Prior to the separation of Ralliant Corporation on June 28, 2025, we operated and reported our results in three segments, IOS, PT, and AHS.

The IOS segment provides advanced instrumentation, software and services to tens of thousands of customers enabling their mission-critical workflows.

The PT segment helps solve tough technical challenges to speed breakthroughs in a wide range of applications, from food and beverage production and manufacturing to next-generation electric vehicles and clean energy, as our customers seek new test solutions to enable the electrification and connectivity of everything.

The AHS segment supplies critical workflow solutions enabling healthcare providers to deliver exceptional patient care more efficiently.

Refer to Note 11 for further description of each segment.

In January 2024, we realigned Invetech from the AHS segment to the PT segment (the “Segment Realignment”) based on our strategic decision to divest the equipment design and manufacturing businesses of Invetech, while retaining the motion solution businesses (the “Motion Solution Business”) that are more closely aligned with the PT segment than the AHS segment.

In June 2024, we divested and transferred ownership of Invetech, excluding the Motion Solution Business, to its management team (the “Invetech Divestiture”).

Our IOS segment provides advanced instrumentation, software and services to tens of thousands of customers enabling their mission-critical workflows.

These offerings include electrical test & measurement, facility and asset lifecycle software applications, connected worker safety and compliance solutions across a range of vertical end markets, including manufacturing, process industries, healthcare, utilities and power, communications and electronics, among others.

Typical users of these safety, productivity and sustainability solutions include electrical engineers, electricians, electronic technicians, EHS professionals, network technicians, facility managers, first-responders, and maintenance professionals.

Our PT segment helps solve tough technical challenges to speed breakthroughs in a wide range of applications, from food and beverage production and manufacturing to next-generation electric vehicles and clean energy, as our customers seek new test solutions to enable the electrification and connectivity of everything.

Our expertise in materials, methods and measurements are reflected in our electrical test & measurement and sensing and material technologies offered to a broad set of customers and vertical end markets, including industrial, power and energy, automotive, medical equipment, food and beverage, aerospace and defense, semiconductor, and other general industries.

Customers for these products and services include design engineers for advanced electronic devices and equipment, process and quality engineers focused on improved process capability and productivity, facility maintenance managers driving increased uptime, and other customers for whom precise measurement, reliability, and compliance are critical in their applications.

Our AHS segment supplies critical workflow solutions enabling healthcare providers to deliver exceptional patient care more efficiently.

Our offerings include instrument sterilization solutions, instrument tracking, biomedical test tools, radiation detection and safety monitoring, and end-to-end clinical productivity software and solutions.

Our healthcare offerings help ensure critical safety standards are met, instruments and operating rooms are working at peak performance, and complex procedures are followed accurately in these mission-critical healthcare environments.

Non-GAAP Measures

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References to sales attributable to acquisitions or acquired businesses refer to GAAP sales from acquired businesses recorded prior to the first anniversary of the acquisition, less the amount of sales attributable to certain businesses or product lines that have been divested, or, at the time of reporting, are pending divestiture, but are not, and will not be, considered discontinued operations prior to the first anniversary of the divestiture.

The portion of sales attributable to the impact of currency translation is calculated as the difference between (a) the period-to-period change in sales (excluding sales impact from acquired businesses) and (b) the period-to-period change in sales (excluding sales impact from acquired businesses) after applying the current period foreign exchange rates to the prior year period.

Core revenue should be considered in addition to, and not as a replacement for or superior to, sales, and may not be comparable to similarly titled measures reported by other companies.

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References to sales volume from existing businesses refer to the impact of both price and unit sales.

Update on Pending Separation of the Precision Technologies Segment

On September 4, 2024, we announced our intention to separate our PT segment business into an independent publicly-traded company (the “Separation”), which has been incorporated under the name Ralliant Corporation.

The Separation will create (i) a technology solutions company, retaining the Fortive name, with a portfolio of the brands currently operating under Fortive’s IOS and AHS business segments, focused on resilient, high-quality recurring growth by delivering productivity and safety to customers, and (ii) a global technology company consisting of our brands currently operating under the PT segment with a focus on precision instruments and highly engineered products essential for breakthrough innovation and aligned to powerful secular trends.

The Separation is intended to qualify as a tax-free spin-off to Fortive shareholders for U.S.

federal income tax purposes.

The Company is currently targeting completion of the Separation by the end of the second quarter of 2025, subject to the satisfaction of certain conditions, including, among others, final approval of Fortive’s Board of Directors, or a delegated committee thereof, satisfactory completion of financing, receipt of a favorable opinion of legal counsel and/or a private letter ruling from the U.S.

Internal Revenue Service with respect to the tax treatment of the transaction for U.S.

federal income tax purposes, the effectiveness of a Form 10 registration statement filed with the SEC, and other regulatory approvals.

All assets, liabilities, revenues and expenses of Ralliant are included in the consolidated results of the Company in the accompanying consolidated condensed financial statements.

Fortive anticipates that Ralliant’s Form 10 registration statement will be filed publicly with the SEC in early May 2025.

On January 3, 2024, we acquired EA Elektro-Automatik Holding GmbH (“EA”), a leading supplier of high-power electronic test solutions for energy storage, mobility, hydrogen, and renewable energy applications.

The acquisition of EA will bolster our innovative portfolio of products and services for engineers with complementary test and measurement solutions enabling the global energy transition.

The total consideration paid was approximately $1.72 billion, net of acquired cash.

We recorded approximately $1.18 billion of goodwill within the PT segment related to the EA acquisition, which is not tax deductible.

We also anticipate future tax benefits as a result of the transaction.

Precision Technologies Separation

On June 28, 2025 (the “Distribution Date”), the Company completed the separation (the “Separation” or the “PT Separation”) of its former Precision Technologies segment by distributing to Fortive shareholders on a pro rata basis all of the issued and outstanding common stock of Ralliant Corporation (“Ralliant”), the entity incorporated to hold the PT businesses.

Beginning with the third quarter of 2025, the Company will classify Ralliant as a discontinued operation in its financial statements, as a result of the Separation.

Refer to Note 2 for additional information.

Business Performance and Outlook

Business Performance for the Period Ended March 28, 2025

During the three-month period ended March 28, 2025 (the “quarter” or the “first quarter” and “year-to-date period,” respectively), our sales decreased by 3.3%, primarily driven by a 1.7% decrease in our core revenue and a 1.2% decrease from unfavorable foreign currency exchange rates.

Core revenue growth in the first quarter included favorable pricing of 1.9%, offset by volume declines of 3.6%.

Geographically, in the first quarter, core revenue in developed markets decreased low single-digits, driven by low single-digit growth in North America, offset by a high-teens decline in Western Europe.

Core revenue in high growth markets decreased low single-digits in the first quarter, where we had high single-digit growth in Latin America, offset by a high single-digit decline in China.

Business Performance for the Period Ended June 27, 2025

During the three and six-month period ended June 27, 2025 (the “quarter” or the “second quarter” and “year-to-date period,” respectively), our sales decreased by 2.2% and 2.7%, respectively.

The year-over-year decrease in the second quarter was a result of a 2.5% decrease in our core revenue, which was comprised of favorable pricing of 2.9% including countermeasures to mitigate the unfavorable tariffs impact, offset by volume declines of 5.4%.

Additionally, there was a 0.9% increase from favorable foreign currency exchange rates and a 0.6% decrease from the effect of divested businesses.

Year-over-year decrease in the year-to-date period was primarily a result of a 2.1% decrease in our core revenue, which was comprised of favorable pricing of 2.4% including countermeasures to mitigate the unfavorable tariffs impact, offset by volume declines of 4.5%.

Additionally, there was a 0.5% decrease from the effect of divested businesses.

Geographically, in the second quarter, the core revenue decline was driven primarily by market dynamics in Western Europe largely in the PT segment.

North America and China also experienced softness in the quarter.

Geographically, in the year-to-date period, the core revenue decline was again driven primarily by the PT segment in Western Europe.

Further, declines in China were partially offset by growth in North America and Latin America.

For further detail, refer to the Intelligent Operating Solutions, Precision Technologies, and Advanced Healthcare Solutions sections below.

In 2025, the U.S.

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In response, China, in particular, and other countries have announced retaliatory tariffs against certain imports from the United States.

Currently, certain of these tariffs have been temporarily paused until August of 2025.

There may be additional changes to tariff levels, trade restrictions, and other aspects of global trade policy in the U.S.

and other countries due to global trade negotiations and other factors.

These changes to trade policies, retaliatory measures, and prolonged uncertainty in trade relationships negatively impact operations and financial results, including potential impairment of certain intangible assets, through resulting supply chain disruptions, delayed shipments, and increased operational complexities and costs.

We continue to evaluate what impact these tariffs may have on our financial results, as the application and imposition of these tariffs remains unpredictable.

We continue to evaluate the impact of tariffs on our financial results, as the application and imposition of these tariffs remains unpredictable.

For additional discussion of risks related to tariffs and trade relations, please refer to the risk factor, “Trade relations between the United States and other countries, including the imposition of new or increased tariffs and related uncertainty thereof, could have a material adverse effect on our business and financial results” in Part II, Item 1A.

Risk Factors of this Quarterly Report on Form 10-Q.

Risk Factors of the Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 2025.

We also expect foreign exchange rates to remain volatile throughout the year, which could continue to impact our financial results.

Additionally, our financial outlook is subject to various assumptions and risks, including but not limited to, ongoing geopolitical developments and events, global uncertainties related to governmental policies toward international trade, monetary and fiscal policies, including the current uncertainty about the future relationship between the United States and other regions with respect to tariffs as mentioned above, trade policies, treaties, government regulations and sanctions, increased economic nationalism, macroeconomic conditions in the United States, China, and other critical regions, impact from our pending separation into two independent publicly traded companies, and the impact of inflationary dynamics on our expenses or our ability to realize price increases and/or competitiveness in our sales, interest rates, market conditions in key product segments, and elective surgery rates.

Additionally, our financial outlook is subject to various assumptions and risks, including but not limited to, ongoing geopolitical developments and events, uncertainties related to governmental policies on international trade and healthcare, monetary and fiscal policies, including the current uncertainty about the future relationship between the United States and other regions with respect to tariffs as mentioned above, trade policies, treaties, government regulations and sanctions, reductions in spending by the U.S.

government as a result of the recently enacted One Big Beautiful Bill Act (“OBBBA”) and the formation of the Department of Government Efficiency, increased economic nationalism, macroeconomic conditions in the United States, China, and other critical regions, impact from our separation into two independent publicly traded companies, and the impact of inflationary dynamics on our expenses or our ability to realize price increases and/or competitiveness in our sales, interest rates, market conditions in key product segments, and elective surgery rates.

We continue to deploy the Fortive Business System (“FBS”), including tools and processes to leverage existing sourcing strategies and optimize production and logistics to actively manage these challenges and utilize pricing, cost and productivity actions and other countermeasures designed to offset the aforementioned dynamics.

We continue to monitor these conditions and potential adverse global economic trends and sentiments, monetary and fiscal policies, international trade policies and relations between the U.S., China and other nations, and investment and taxation policy initiatives being considered in the United States and by the Organization for Economic Co-operation and Development (“OECD”), including incremental impacts of the Pillar Two initiative.

In addition, we are continuing to assess the potential impact, including on our tax liabilities and our strategies, of the OBBBA.

Refer to Income Taxes below for further detail on the OECD initiatives and the OBBBA.

RESULTS OF OPERATIONS

The following table summarizes total aggregate year-over-year sales growth and the components thereof for the first quarter as compared to the comparable period of 2024:

The following table summarizes total aggregate year-over-year sales growth and the components thereof for the second quarter as compared to the comparable period of 2024:

Components of Sales Growth

% Change Three Months Ended March 28, 2025 vs.

% Change Three Months Ended June 27, 2025 vs.

Comparable 2024 Period

% Change Six Months Ended June 27, 2025 vs.

Comparable 2024 Period

Total revenue growth (GAAP) (2.2) % (2.7) %

Excluding impact of:

Acquisitions and divestitures 0.4 %

Currency exchange rates (0.9) % 0.1 %

Core revenue growth (Non-GAAP)

(2.5) % (2.1) %

Operating Profit Margins

Operating profit margin was 15.8% for the first quarter, representing a decrease of 400 basis points as compared to 19.8% in the comparable period of 2024.

Operating profit margin was 14.6% for the second quarter, representing a decrease of 480 basis points as compared to 19.4% in the comparable period of 2024.

Year-over-year changes in operating profit margin were comprised of the following:

• The year-over-year effect of the gain on sale of land and certain office buildings in the PT segment in the first quarter of 2024 — unfavorable 415 basis points

• Year-over-year increase in price, volume gains in IOS and AHS, and gains from productivity measures through our FBS initiatives, offset by volume declines in certain businesses and end markets within our PT segment, higher employee compensation and the impact from unfavorable foreign currency exchange rates — unfavorable 20 basis points

• The year-over-year effect of amortization from existing businesses — unfavorable 10 basis points

• The year-over-year net effect of costs related to the Separation during 2025 and acquisition and divestiture-related transaction costs incurred in 2024 — favorable 15 basis points

• The year-over-year net effect of acquired and divested businesses, including amortization, and acquisition-related fair value adjustments — favorable 55 basis points

• The year-over-year effect of costs relating to discrete restructuring plans — unfavorable 25 basis points

Business Segments

Sales by business segment for each of the periods indicated were as follows ($ in millions):

Three Months Ended

March 28, 2025 March 29, 2024

Intelligent Operating Solutions $ 671.4 $ 665.7

Precision Technologies 500.6 559.0

Advanced Healthcare Solutions 302.2 299.8

Total $ 1,474.2 $ 1,524.5

• The year-over-year increase in price and gains from productivity measures through our FBS initiatives were offset by overall volume declines, higher employee compensation, and unfavorable impacts from tariffs net of countermeasures — unfavorable 170 basis points

• The year-over year effect of all other items was an unfavorable 310 basis points comprised of -270 basis points from Separation, acquisition, and divestiture-related costs, -55 basis points in discrete restructuring charges, +30 basis points from the net effect of divested businesses, and -15 basis points from amortization of existing businesses

Operating profit margin was 15.2% for the year-to-date period, yielding a decrease of 440 basis points as compared to 19.6% in the comparable period of 2024.

Year-over-year changes in operating profit margin were comprised of the following:

• The year-over-year increase in price and gains from productivity measures were offset by volume declines, higher employee compensation, investments in growth initiatives, and the unfavorable impact from tariffs net of countermeasures — unfavorable 95 basis points

• The year-over year effect of all other items was an unfavorable 345 basis points comprised of -205 basis points from the gain on sale of property in PT in 2024, -125 basis points from Separation, acquisition, and divestiture-related costs, -40 basis points in discrete restructuring charges, +40 basis points from the net effect of acquired and divested businesses, and -15 basis points from amortization of existing businesses

INTELLIGENT OPERATING SOLUTIONS

Our IOS segment provides advanced instrumentation, software and services to tens of thousands of customers enabling their mission-critical workflows.

Intelligent Operating Solutions Selected Financial Data

Three Months Ended

($ in millions) March 28, 2025 March 29, 2024

Selected Financial Data

Three Months Ended Six Months Ended

($ in millions) June 27, 2025 June 28, 2024 June 27, 2025 June 28, 2024

Sales $ 675.7 $ 677.0 $ 1,347.1 $ 1,342.7

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Components of Sales Growth

% Change Three Months Ended March 28, 2025 vs.

% Change Three Months Ended June 27, 2025 vs.

Comparable 2024 Period

% Change Six Months Ended June 27, 2025 vs.

Comparable 2024 Period

Total revenue growth (GAAP) (0.2) % 0.3 %

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Core revenue growth (Non-GAAP)

Our sales growth in the first quarter was driven by favorable pricing across the segment and an increase in volume in our test and measurement instrumentation and gas detection products, partially offset by a decline in certain product lines in our facilities and asset lifecycle offerings, as well as unfavorable foreign currency exchange rates.

Geographically, core revenue in developed markets increased in the first quarter by mid-single-digits, driven by high single-digit growth in North America, partially offset by a high single-digit decline in Western Europe.

Core revenue in high growth markets decreased in the first quarter by low single-digits, driven primarily by a low double-digit decline in China, offset by high single-digit growth in India.

Year-over-year price increases in our IOS segment contributed 1.7% to sales growth during the first quarter and is reflected as a component of the change in core revenue.

Operating profit margin increased 120 basis points during the first quarter as compared to the comparable period of 2024.

(0.4) % 0.8 %

The sales results in both the second quarter and year-to-date period were driven by favorable pricing of 2.3% and 2.0%, respectively, including countermeasures to mitigate unfavorable tariff impacts, and volume increases in gas detection offerings.

These benefits were offset by modest declines in professional instrumentation.

Additionally, foreign currency exchange rates impacted sales results as indicated above.

Geographically, in the second quarter, the core revenue decline was driven primarily by lower sales in China in professional instrumentation, partially offset by growth in Latin America from gas detection offerings.

North America core revenue has remained stable despite tariff-related uncertainty and lower government procurement spend.

Geographically, in the year-to-date period, core revenue growth was driven primarily by expansion in North America across majority of the segment led by facility and asset lifecycle SaaS products and gas detection solutions, as well as Latin America from strong demand in professional instrumentation and gas detection.

This growth was partially offset by declines in Western Europe and China from softening demand in certain product lines in professional instrumentation and certain software and services in facility and asset lifecycle applications.

Operating profit margin decreased 90 basis points during the second quarter as compared to the comparable period of 2024.

Year-over-year changes in operating profit margin were comprised of the following:

• Year-over-year increase in price, a net increase in sales volume across the segment, and efficiency gains achieved through FBS measures, partially offset by higher employee compensation and the impact of unfavorable foreign currency exchange rates — favorable 150 basis points

• The year-over-year effect of amortization from existing businesses — favorable 20 basis points

• The year-over-year effect of costs relating to discrete restructuring plans — unfavorable 50 basis points

• The year-over-year increase in price and efficiency gains achieved from productivity measures through our FBS initiatives were offset by a net decrease in sales volume in the segment, higher employee compensation, investments in growth initiatives, and the unfavorable impact from tariffs net of countermeasures — unfavorable 30 basis points

• The year-over year effect of all other items was an unfavorable 60 basis points comprised of -85 basis points in discrete restructuring charges, +15 basis points from acquisition and divestiture-related costs, and +10 basis points from amortization of existing businesses

Operating profit margin increased 20 basis points during the year-to-date period, as compared to the comparable period of 2024.

Year-over-year changes in operating profit margin comparisons were comprised of the following:

• Year-over-year increase from favorable pricing and efficiency gains achieved from productivity through our FBS initiatives were partially offset by a net decrease in sales volume, higher employee compensation, and unfavorable impact from tariffs net of countermeasures — favorable 60 basis points

• The year-over year effect of all other items was an unfavorable 40 basis points comprised of -70 basis points in discrete restructuring charges, +20 basis points from amortization from existing businesses, and +10 basis points from acquisition and divestiture-related costs

PRECISION TECHNOLOGIES

Precision Technologies Selected Financial Data

Three Months Ended

($ in millions) March 28, 2025 March 29, 2024

Selected Financial Data

Three Months Ended Six Months Ended

($ in millions) June 27, 2025 June 28, 2024 June 27, 2025 June 28, 2024

Sales $ 523.6 $ 551.8 $ 1,024.2 $ 1,110.8

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C omponents of Sales Growth

% Change Three Months Ended March 28, 2025 vs.

% Change Three Months Ended June 27, 2025 vs.

Comparable 2024 Period

% Change Six Months Ended June 27, 2025 vs.

Comparable 2024 period

Total revenue growth (GAAP) (5.1) % (7.8) %

Excluding impact of:

Acquisitions and divestitures 1.0 %

Currency exchange rates (1.2) % (0.1) %

Core revenue growth (Non-GAAP) (5.3) % (6.9) %

The sales results for the first quarter were impacted by price increases across the segment and volume increases in utility sensing and solutions,which were more than offset by volume reductions in test and measurement, energetic materials, and industrial sensing products.

Additionally, there was an unfavorable impact from foreign currency exchange rates and the Invetech Divestiture.

Geographically, core revenue in developed markets decreased by low double-digits in the first quarter, driven by a mid-thirties decline in Western Europe and a mid-single-digit decline in North America.

Core revenue in high growth markets decreased by low single-digits in the first quarter, driven by a high single-digit decline in China, partially offset by low thirties growth in Latin America.

Year-over-year price increases in our PT segment contributed 1.8% to sales results for the first quarter and is reflected as a component of the change in core revenue.

Operating profit margin decreased 930 basis points for the first quarter as compared to the comparable period of 2024.

The sales results for the second quarter and year-to-date period were driven by favorable pricing of 3.5% and 2.6%, respectively, including countermeasures to mitigate unfavorable tariff impacts, and increased demand in the utilities sector for grid modernization.

These benefits were offset by volume reductions in test and measurement, energetic materials, and certain industrial sensing products, as well as the Invetech Divestiture.

Additionally, foreign currency exchange rates impacted sales results as indicated above.

Geographically, in the second quarter and the year-to-date period, core revenue declines were experienced in Western Europe, North America, and China, from slow downs in test and measurement amid tariff-related uncertainties and volume decline in energetic materials.

These declines were partially by growth in Latin America from increased demand in the utilities sector for grid modernization.

Operating profit margin decreased 310 basis points for the second quarter as compared to the comparable period of 2024.

Year-over-year changes in operating profit margin were comprised of the following:

• The year-over-year effect of the gain on sale of land and certain office buildings in the PT segment in the first quarter of 2024 — unfavorable 1,130 basis points

• Year-over-year increase in price, more than offset by net volume reductions, higher compensation costs and the impact of unfavorable foreign currency exchange rates — unfavorable 375 basis points

• The year-over-year effect of amortization from existing businesses — unfavorable 30 basis points

• The year-over-year net effect of acquisition and divestiture-related transaction costs incurred in 2024, primarily related to the EA acquisition — favorable 465 basis points

• The year-over-year net effect of acquired and divested businesses, including amortization, and acquisition-related fair value adjustments — favorable 150 basis points

• The year-over-year effect of costs relating to discrete restructuring plans — unfavorable 10 basis points

• Year-over-year increase in price and gains from productivity measures through our FBS initiatives were offset by net volume reductions, higher compensation costs, and unfavorable impacts from tariffs net of countermeasures— unfavorable 320 basis points

• The year-over year effect of all other items was a favorable 10 basis points comprised of +70 basis points from the Invetech Divestiture, -40 basis points from amortization of existing businesses, -15 basis points from acquisition and divestiture-related costs, and -5 basis points in discrete restructuring charges

Operating profit margin decreased 620 basis points during the year-to-date period as compared to the comparable period of 2024.

Year-over-year changes in operating profit margins were comprised of the following:

• Year-over-year increase in price from existing businesses and gains from productivity measures through our FBS initiatives were offset by net volume reduction in the segment, higher compensation costs, and unfavorable impacts from tariffs net of countermeasures — unfavorable 350 basis points

• The year-over year effect of all other items was an unfavorable 270 basis points comprised of -570 from the gain on sale of property in 2024, +225 basis points from acquisition and divestiture-related costs, +115 basis points from the Invetech Divestiture and acquisition-related fair value adjustments, -30 basis points from amortization of existing businesses, and -10 basis points in discrete restructuring charges

ADVANCED HEALTHCARE SOLUTIONS

Our AHS segment supplies critical workflow solutions enabling healthcare providers to deliver exceptional patient care more efficiently.

Advanced Healthcare Solutions Financial Data

Three Months Ended

($ in millions) March 28, 2025 March 29, 2024

Selected Financial Data

Three Months Ended Six Months Ended

($ in millions) June 27, 2025 June 28, 2024 June 27, 2025 June 28, 2024

Sales $ 319.5 $ 323.6 $ 621.7 $ 623.4

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Components of Sales Growth

% Change Three Months Ended March 28, 2025 vs.

% Change Three Months Ended June 27, 2025 vs.

Comparable 2024 period

% Change Six Months Ended June 27, 2025 vs.

Comparable 2024 Period

Total revenue growth (GAAP) (1.3) % (0.3) %

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Core revenue growth (Non-GAAP)

The sales results for the first quarter were driven by price increases across the segment and volume increases in dosimetry services, and software products, all partially offset by a decline in biomedical test tools and unfavorable foreign currency exchange rates.

Geographically, core revenue in developed markets increased by mid-single-digits in the first quarter, driven by mid-single-digit growth in North America and a low single-digit decline in Western Europe.

In high growth markets, core revenue decreased slightly in the first quarter, driven by mid-single-digit growth in Latin America, partially offset by a mid-single-digit decline in China.

Year-over-year price increases in our AHS segment contributed 2.3% to sales growth during the first quarter and is reflected as a component of the change in core revenue.

Operating profit margin decreased 50 basis points during the first quarter, as compared to the comparable period of 2024.

(1.9) % 0.2 %

The sales results for the second quarter and year-to-date period were driven by favorable pricing of 2.9% and 2.6%, respectively, and volume increases in software products and dosimetry services.

These benefits were offset by a decline in sterilization healthcare equipment and biomedical test tools.

Additionally, foreign currency exchange rates impacted sales results as indicated above.

Geographically, in the second quarter, the core revenue decline was driven primarily by weakness in Latin America from sterilization healthcare equipment due to government healthcare budgetary restraints.

Western Europe also observed sales declines in certain biomedical test products.

In North America, healthcare software experienced increased demand, mitigating the unfavorable impact of softening healthcare equipment sales driven by healthcare policy uncertainty.

Geographically, in the year-to-date period, core revenue was stable, which was driven primarily by growth in North America where increased demand in software products and dosimetry services mitigated the weakness in sterilization healthcare equipment sales.

This growth was mostly offset by declines in Latin America, Western Europe and China, from demand weakness in sterilization healthcare equipment and certain biomedical and radiation detection products.

Operating profit margin decreased 20 basis points during the second quarter, as compared to the comparable period of 2024.

Year-over-year changes in operating profit margin were comprised of the following:

• Year-over-year increases due to favorable price and gains from productivity measures through our FBS initiatives, offset by higher employee compensation and the impact of foreign currency exchange rate — unfavorable 70 basis points

• Year-over-year increases due to favorable pricing, gains from productivity measures through our FBS initiatives, offset by a net volume decline in the segment, higher employee compensation, and investments in growth initiatives — unfavorable 10 basis points

• The year-over-year effect of amortization from existing businesses — unfavorable 10 basis points

Operating profit margin decreased 40 basis points during the year-to-date period as compared to the comparable period of 2024.

Year-over-year changes in operating profit margin were comprised of the following:

• Year-over-year increase due to favorable pricing and gains from productivity measures, offset by a net volume decline, higher employee compensation, and higher costs to support product innovation — unfavorable 50 basis points

• The year-over-year effect of amortization from existing businesses — favorable 10 basis points

COST OF SALES AND GROSS PROFIT

Three Months Ended

($ in millions) March 28, 2025 March 29, 2024

Three Months Ended Six Months Ended

($ in millions) June 27, 2025 June 28, 2024 June 27, 2025 June 28, 2024

Sales $ 1,518.8 $ 1,552.4 $ 2,993.0 $ 3,076.9

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Gross profit margin 59.0 % 59.8 % 59.4 % 59.6 %

The year-over-year decrease in gross profit during the first quarter was a result of favorable pricing from existing businesses and increased volume in IOS, partially offset by net volume reduction in the PT segment, higher employee compensation, and unfavorable foreign currency exchange rates.

The year-over-year decrease in gross profit during both the second quarter and year-to-date period was due to an overall volume decline, higher employee compensation, discrete restructuring charges, and the unfavorable impact from tariffs net of countermeasures.

These impacts were partially offset by favorable pricing, gains from productivity measures and FBS initiatives.

Additionally, the effect of foreign currency exchanges rates was favorable in the second quarter but unfavorable in the year-to-date period.

OPERATING EXPENSES

Three Months Ended

Three Months Ended Six Months Ended

($ in millions)

March 28, 2025 March 29, 2024

June 27, 2025 June 28, 2024 June 27, 2025 June 28, 2024

Sales $ 1,518.8 $ 1,552.4 $ 2,993.0 $ 3,076.9

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R&D as a % of sales 7.2 % 6.5 % 7.2 % 6.7 %

The year-over-year decrease in SG&A during the first quarter was due to lower year-over-year transaction expenses related to our EA acquisition in 2024 offset by separation costs in 2025, and benefits from productivity measures through our FBS initiatives, partially offset by higher employee compensation.

R&D, consisting principally of internal and contract engineering personnel costs, increased slightly during the first quarter as compared to the comparable period of 2024 due to ongoing investments in innovation.

The year-over-year increase in SG&A during both the second quarter and year-to-date period were primarily due to costs incurred in 2025 related to the Separation, higher employee compensation, investment for growth initiatives, and discrete restructuring charges, all partially offset by benefits from productivity measures through our FBS initiatives.

Additionally, in the year-to-date period, there were lower costs incurred related to acquisitions when compared to last year.

R&D, consisting principally of internal and contract engineering personnel costs, increased during the second quarter and the year-to-date period as compared to the comparable periods of 2024 due to ongoing investments in innovation and higher compensation.

NON-OPERATING INCOME (EXPENSE), NET

Interest costs

Net interest expense for the first quarter was $32.0 million as compared to $44.0 million in the comparable periods in 2024.

Net interest expense for the second quarter and year-to-date period was $32.1 million and $64.1 million as compared to $38.7 million and $82.7 million in the comparable periods in 2024.

The year-over-year decrease in net interest expense was primarily due to overall debt mix consisting of lower fixed rate debt instruments, and lower interest rate on floating rate debt instruments.

For discussion of our outstanding indebtedness, refer to Note 5 to the consolidated condensed financial statements.

Other non-operating expense, net

Other non-operating expense for the first quarter was $0.2 million, as compared to $24.2 million in the comparable period in 2024.

The year-over-year decrease was due to a charitable contribution made in the first quarter of 2024.

Loss from divestiture

During the three and six-month periods ended June 28, 2024, we recognized a net realized loss of $25.6 million related to the Invetech Divestiture.

For further discussion of this transaction, refer to Note 1 to the consolidated condensed financial statements.

Other non-operating income (expense), net

Other non-operating income for the second quarter and year-to-date period was $1.9 million and $1.7 million, as compared to expense of $8.8 million and $33.0 million in the comparable periods in 2024.

The year-over-year change in both the second quarter and year-to-date was primarily due to losses from our equity investments recognized in the comparable prior year periods.

Additionally there was a charitable contribution made in the first quarter of 2024.

For further discussion of the charitable contribution, refer to Note 1 to the consolidated condensed financial statements.

Our effective tax rate for the three-month period ended March 28, 2025 was 14.6% as compared to 11.4%, for the three-month period ended March 29, 2024.

The increase in the effective tax rate for the three-month period ended March 28, 2025 as compared to the three-month period ended March 29, 2024 was primarily related to a discrete tax credit in the comparable prior year period from cash repatriation.

Our effective tax rate for the three-month period ended March 28, 2025, differs from the U.S.

Our effective tax rate for the three and six-month period ended June 27, 2025 was 13.2% and 14.0%, respectively, as compared to 14.7% and 13.0%, respectively, for the three and six-month period ended June 28, 2024.

The decrease in the effective tax rate for the three-month period ended June 27, 2025 as compared to the three-month period ended June 28, 2024 was primarily related to a change in mix of earnings in the comparable prior year period.

The increase in the effective tax rate for the six-month period ended June 27, 2025 as compared to the six-month period ended June 28, 2024 was primarily related to a discrete tax credit in the comparable prior year period from cash repatriation.

Our effective tax rate for the three and six-month period ended June 27, 2025 , differs from the U.S.

federal statutory rate of 21% due primarily to the impact of credits and deductions provided by law, including those associated with state income taxes, and changes in our uncertain tax position reserves.

The OECD has published the framework for a “Pillar Two” global minimum corporate income tax rate of fifteen percent (15%).

For the current year, portions of Pillar Two are effective in certain countries where the Company conducts business, and the impact has been included within the provision for income taxes.

The Company continues to monitor for further corporate tax legislative developments and changes to the Pillar Two framework.

Globally, the Company monitors legislative action and OECD initiatives related to global taxation.

The impact of the OECD framework for a “Pillar Two” global minimum corporate income tax rate of fifteen percent (15%) has been included within the provision for income taxes.

On June 28, 2025, the OECD released a statement recognizing an agreement between OECD and the G20 to recognize the U.S.

minimum tax rules to exempt U.S.

multinationals certain portions of the Pillar Two framework.

We continue to monitor further guidance and legislative developments related to the Pillar Two framework.

The One Big Beautiful Bill Act (“OBBBA”) enacted in the U.S on July 4, 2025 resulted in significant income tax provisions with effective dates spanning from 2025 through 2027.

Changes from OBBBA include modifications to allow for immediate expensing of certain business investments and provides certain permanent extensions and modifications to the U.S.

international tax framework.

We are currently assessing the impact of OBBBA on our consolidated financial statements.

COMPREHENSIVE INCOME

Comprehensive income increased by $111 million during the first quarter as compared to the comparable period in 2024 due primarily to favorable changes in foreign currency translation adjustments of $147 million, partially offset by a $36 million decrease in net income.

Comprehensive income increased by $101 million during the second quarter as compared to the comparable period in 2024 due to favorable changes in foreign currency translation of $129 million, partially offset by a $29 million decrease in net income.

Comprehensive income increased by $212 million during the year-to-date period as compared to the comparable period in 2024 due primarily to favorable changes in foreign currency translation adjustments of $276 million, partially offset by a $64 million decrease in net income.

LIQUIDITY AND CAPITAL RESOURCES

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dollar and Euro-denominated commercial paper programs (“Commercial Paper Programs”).

Credit support for the Commercial Paper Programs is provided by a five-year $2.0 billion senior unsecured revolving credit facility that expires on October 18, 2027 (the “Revolving Credit Facility”) which, to the extent not otherwise providing credit support for the commercial paper programs, can also be used for working capital and other general corporate purposes.

As of March 28, 2025, no borrowings were outstanding under the Revolving Credit Facility.

support for the commercial paper programs, can also be used for working capital and other general corporate purposes.

As of June 27, 2025, no borrowings were outstanding under the Revolving Credit Facility.

The availability of the Revolving Credit Facility as a standby liquidity facility to repay maturing commercial paper is an important factor in maintaining the existing credit ratings of the Commercial Paper Programs when we have outstanding borrowings.

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If changes in financial markets or other areas of the economy or downgrade in our credit rating adversely affect our access to the capital markets and other financing sources, we would expect to rely on a combination of available cash and existing available capacity under our credit facilities to provide short-term funding.

Refer to Note 5 of the consolidated condensed financial statements for additional information regarding our financing activities and indebtedness.

Overview of Cash Flows and Liquidity

Following is an overview of our cash flows and liquidity ($ in millions):

Three Months Ended

March 28, 2025 March 29, 2024

Six Months Ended

June 27, 2025 June 28, 2024

Net cash provided by operating activities $ 552.9 $ 565.6

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Cash paid for acquisitions, net of cash received — (1,721.8)

Cash infusion into divestiture — (14.0)

All other investing activities 10.9 (1.6)

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The year-over-year change in operating cash flows was primarily attributable to the following factors:

• Year-over-year increase of $24 million in Operating cash flows from net earnings, net of non-cash items (Amortization, Depreciation, Stock-based compensation, and Gain on sale of property).

• Year-over-year decrease of $25 million in Operating cash flows from net earnings, net of non-cash items (Amortization, Depreciation, Stock-based compensation, Gain on sale of property, and Loss from divestiture).

• The aggregate changes in accounts receivable, inventories, and trade accounts payable generated $32 million of cash during the year-to-date period as compared to generating $43 million in the comparable period of 2024.

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• The aggregate changes in prepaid expenses and other assets, and accrued expenses and other liabilities used $145 million of cash in the year-to-date period as compared to using $169 million of cash in the comparable period of 2024.

The year-over-year changes were driven by timing differences related to contract assets, contract liabilities, and payments of employee compensation, income taxes and interest.

The year-over-year changes were driven by timing differences related to payments of employee compensation, income taxes, interest.

Investing Activities

Cash outflows from investing activities declined $1.71 billion when compared with the prior year, which had outflows related to acquisitions, net of cash acquired, partially offset by proceeds from the sale of property.

Cash outflows from investing activities declined $1.73 billion when compared with the prior year, which had outflows related to the EA acquisition, net of cash acquired, and cash infusion into divestiture.

Capital expenditures are made primarily for increasing production capacity, replacing aged equipment, supporting product development initiatives for hardware and software offerings, improving information technology systems, and purchasing equipment that is used in revenue arrangements with customers.

For the current year, we expect capital spending to be between approximately $120-$140 million, though actual expenditures will ultimately depend on business conditions.

Financing Activities and Indebtedness

Cash flows from financing activities consist primarily of cash flows associated with the issuance and repayment of debt and commercial paper, payments of cash dividends to shareholders and share repurchases.

In the year-to-date period, financing activities used cash of $141 million, reflecting the following transactions:

• We incurred $81 million in net commercial paper borrowings.

In the year-to-date period, financing activities generated cash of $509 million, reflecting the following transactions:

• We repaid $253 million in net commercial paper borrowings.

• We repurchased 4.4 million shares of our common stock for approximately $345 million, under our share repurchase program.

• We made dividend payments to common shareholders totaling $54 million.

In the comparable 2024 period, financing activities generated cash of $307 million, reflecting the following transaction:

• On June 27, 2025, in preparation for the Separation, Ralliant, a wholly-owned, consolidated subsidiary prior to the Separation, borrowed $1.15 billion in aggregate principal amount of USD Term Loans due 2026 and 2028 (the “Ralliant Debt”).

In the comparable 2024 period, financing activities used cash of $15 million, reflecting the following transaction:

• We repaid $572 million in net commercial paper borrowings.

• On January 2, 2024, we drew down $450 million from the $1.3 billion Delayed-Draw Term Loan due 2024 as part of the funding for the acquisition of EA.

• On January 2, 2024, we drew down an additional $450 million of the Delayed-Draw Term Loan due 2024 as part of the funding for the acquisition of EA.

• On February 13, 2024, we completed the sale of our registered offering of the 2026 Notes and the 2029 Notes, yielding net proceeds of approximately $1.3 billion.

• On February 13 2024, we repaid $1.0 billion in outstanding principal of the Delayed-Draw Term Loan due 2024, using net proceeds from the 2026 Notes and 2029 Notes.

• On February 13 2024, Fortive repaid $1.0 billion in outstanding principal of the Delayed-Draw Term Loan due 2024, using net proceeds from the 2026 Notes and 2029 Notes.

• We repurchased 2 million shares of our common stock for approximately $153 million under our share repurchase program.

• We made dividend payments to common shareholders totaling $56 million.

Refer to Note 5 of the consolidated condensed financial statements for additional information regarding our financing activities and indebtedness.

Cash and Cash Requirements

As of March 28, 2025, we held approximately $892 million of cash and equivalents that were invested in highly liquid investment-grade instruments with a maturity of 90 days or less, of which approximately 87% was held outside of the United States.

As of June 27, 2025, we held approximately $1,833 million of cash and equivalents, including the proceeds from the Ralliant Dividend, that were invested in highly liquid investment-grade instruments with a maturity of 90 days or less, of which approximately 32% was held outside of the United States.

We have cash requirements to support working capital needs, capital expenditures and acquisitions, pay interest and service debt, pay taxes and any related interest or penalties, fund our pension plans as required, pay dividends to shareholders, and support other business needs or objectives.

With respect to our cash requirements, we generally intend to use available cash and internally generated funds to meet these cash requirements, but in the event that additional liquidity is required, particularly in connection with acquisitions and repayment of maturing debt, we may also borrow under our commercial paper programs or credit facilities or enter into new credit facilities and either borrow directly thereunder or use such credit facilities to backstop additional borrowing capacity under our commercial paper programs.

additional borrowing capacity under our commercial paper programs.

We also may from time to time access the capital markets, including to take advantage of favorable interest rate environments or other market conditions.

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The amount of foreign remittance taxes that may be applicable to such earnings is not readily determinable given local law restrictions that may apply to a portion of such earnings, unknown changes in foreign tax law that may occur during the applicable restriction periods caused by applicable local corporate law for cash repatriation, and the various tax planning alternatives we could employ if we repatriated these earnings.

As of March 28, 2025, we expect to have sufficient liquidity to satisfy our cash needs for the foreseeable future.

As of June 27, 2025, we expect to have sufficient liquidity to satisfy our cash needs for the foreseeable future.

CRITICAL ACCOUNTING ESTIMATES

There were no material changes during the three-month periods ended March 28, 2025 to the items we disclosed as our critical accounting estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Annual Report on Form 10-K.

There were no material changes during the three and six-month periods ended June 27, 2025 to the items we disclosed as our critical accounting estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Annual Report on Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis