Ralliant Corp 10-Q

ITEM 1. FINANCIAL STATEMENTS RALLIANT CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS ($ and shares in millions, except per share amounts) April 3, 2026 December 31, 2025 (Unaudited) ASSETS Current assets: Cash and equivalents $ 268.0 $ 318.8 Accounts receivable less allowance for credit losses of $ 8.5 and $ 7.8 , respectively 277.2 285.3 Inventories: Finished goods 64.0 63.5 Work in process 133.1 119.5 Raw materials 124.2 118.6 Inventories, net 321.3 301.6 Prepaid expenses and other current assets 63.0 70.4 Total current assets 929.5 976.1 Property, plant and equipment, net of accumulated depreciation of $ 471.9 and $ 468.7 , respectively 214.8 214.2 Other assets 172.7 163.7 Goodwill 1,617.3 1,672.4 Other intangible assets, net 762.5 795.2 Total assets $ 3,696.8 $ 3,821.6 LIABILITIES AND EQUITY Current liabilities: Current portion of long-term debt $ — $ 530.4 Trade accounts payable 248.8 263.7 Accrued expenses and other current liabilities 330.2 365.6 Total current liabilities 579.0 1,159.7 Long-term debt 1,148.3 618.4 Other long-term liabilities 404.0 409.2 Total liabilities 2,131.3 2,187.3 Commitments and contingencies (Note 9) Equity: Common stock: $ 0.01 par value, 1,300.0 shares authorized; 113.1 and 112.9 issued; and 111.9 and 112.9 outstanding, respectively 1.1 1.1 Preferred stock: $ 0.01 par value, 10.0 shares authorized; no shares issued and outstanding — — Additional paid-in capital 3,232.2 3,223.4 Treasury stock, at cost ( 50.5 ) — Accumulated deficit ( 1,306.7 ) ( 1,345.3 ) Accumulated other comprehensive loss ( 310.6 ) ( 244.9 ) Total equity 1,565.5 1,634.3 Total liabilities and equity $ 3,696.8 $ 3,821.6 See the accompanying Notes to Consolidated and Combined Condensed Financial Statements. 1 RALLIANT CORPORATION AND SUBSIDIARIES CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF EARNINGS ($ and shares in millions, except per share amounts) (Unaudited) Three Months Ended April 3, 2026 March 28, 2025 Sales $ 534.6 $ 481.8 Cost of sales ( 262.3 ) ( 238.4 ) Gross profit 272.3 243.4 Operating expenses: Selling, general and administrative ( 160.5 ) ( 128.3 ) Research and development ( 43.7 ) ( 41.3 ) Operating profit 68.1 73.8 Non-operating expense, net: Interest expense, net ( 14.7 ) — Other non-operating expenses, net ( 0.5 ) ( 0.5 ) Earnings before income taxes 52.9 73.3 Income tax expense ( 8.7 ) ( 9.4 ) Net earnings $ 44.2 $ 63.9 Net earnings per share: Basic $ 0.39 $ 0.57 Diluted $ 0.39 $ 0.57 Average common stock and common equivalent shares outstanding: Basic 112.4 112.7 Diluted 113.2 112.7 See the accompanying Notes to Consolidated and Combined Condensed Financial Statements. 2 RALLIANT CORPORATION AND SUBSIDIARIES CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME ($ in millions) (Unaudited) Three Months Ended April 3, 2026 March 28, 2025 Net earnings $ 44.2 $ 63.9 Other comprehensive (loss) income, net of income taxes: Foreign currency translation adjustments ( 65.9 ) 85.8 Pension and post-retirement plan benefit adjustments 0.2 0.2 Total other comprehensive (loss) income, net of income taxes ( 65.7 ) 86.0 Comprehensive (loss) income $ ( 21.5 ) $ 149.9 See the accompanying Notes to Consolidated and Combined Condensed Financial Statements. 3 RALLIANT CORPORATION AND SUBSIDIARIES CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF CHANGES IN EQUITY ($ and shares in millions) (Unaudited) Common Stock Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Net Former Parent Investment Total Equity Shares Outstanding Amount Balance, December 31, 2025 112.9 $ 1.1 $ 3,223.4 $ — $ ( 1,345.3 ) $ ( 244.9 ) $ — $ 1,634.3 Net earnings — — — — 44.2 — — 44.2 Other comprehensive income — — — — ( 65.7 ) — ( 65.7 ) Dividends to common stockholders ($ 0.05 per common stock) — — — — ( 5.6 ) — — ( 5.6 ) Stock-based compensation 0.2 — 13.5 — — — — 13.5 Common stock repurchases ( 1.2 ) — ( 50.5 ) — — — ( 50.5 ) Shares withheld for taxes — — ( 4.7 ) — — — — ( 4.7 ) Balance, April 3, 2026 111.9 $ 1.1 $ 3,232.2 $ ( 50.5 ) $ ( 1,306.7 ) $ ( 310.6 ) $ — $ 1,565.5 Common Stock Additional Paid-In Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Loss Net Former Parent Investment Total Former Parent’s Equity Shares Outstanding Amount Balance, December 31, 2024 — $ — $ — $ — $ — $ ( 491.3 ) $ 4,254.1 $ 3,762.8 Net earnings — — — — — — 63.9 63.9 Net transfers to Former Parent — — — — — — ( 72.6 ) ( 72.6 ) Other comprehensive loss — — — — — 86.0 — 86.0 Stock-based compensation — — — — — — 6.5 6.5 Balance, March 28, 2025 — $ — $ — $ — $ — $ ( 405.3 ) $ 4,251.9 $ 3,846.6 See the accompanying Notes to Consolidated and Combined Condensed Financial Statements. 4 RALLIANT CORPORATION AND SUBSIDIARIES CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF CASH FLOWS ($ in millions) (Unaudited) Three Months Ended April 3, 2026 March 28, 2025 Cash flows from operating activities: Net earnings $ 44.2 $ 63.9 Adjustments to reconcile net earnings to net cash provided by operating activities: Amortization 22.3 20.3 Depreciation 7.4 6.6 Stock-based compensation 11.1 6.5 Change in accounts receivable, net 6.7 5.0 Change in inventories ( 20.6 ) 2.6 Change in trade accounts payable ( 14.8 ) ( 17.0 ) Change in prepaid expenses and other assets 3.3 ( 6.1 ) Change in accrued expenses and other liabilities ( 40.5 ) ( 9.8 ) Net cash provided by operating activities 19.1 72.0 Cash flows from investing activities: Purchases of property, plant and equipment ( 8.7 ) ( 5.6 ) Proceeds from sale of property — 1.5 Net cash used in investing activities ( 8.7 ) ( 4.1 ) Cash flows from financing activities: Payments of debt issuance costs ( 0.8 ) — Net transfers to Former Parent — ( 72.6 ) Repurchase of common shares ( 50.5 ) — Dividends paid ( 5.6 ) — Other financing activities ( 2.2 ) — Net cash used in financing activities ( 59.1 ) ( 72.6 ) Effect of exchange rate changes on cash and equivalents ( 2.1 ) 4.7 Net change in cash and equivalents ( 50.8 ) — Beginning balance of cash and equivalents 318.8 — Ending balance of cash and equivalents $ 268.0 $ — See the accompanying Notes to Consolidated and Combined Condensed Financial Statements. 5 RALLIANT CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS ($ and shares in millions, except per share amounts, unless otherwise noted) (Unaudited) NOTE 1. BUSINESS OVERVIEW Ralliant Corporation (“Ralliant,” the “Company,” or “it”) is a global technology company with businesses that design, develop, manufacture, and service precision instruments and highly engineered products. The Company empowers engineers with precision technologies essential for breakthrough innovation in an electrified and digital world, enabling its customers to bring advanced technologies to market faster and more efficiently. Its strategic segments – Sensors and Safety Systems and Test and Measurement – include well-known brands with prominent positions across a range of attractive end markets. Separation from Fortive Corporation Ralliant completed its separation from Fortive Corporation (“Fortive” or the “Former Parent”) on June 28, 2025 (“the Separation”), the first day of the Company’s third fiscal quarter. The Separation was completed on such date in the form of a pro rata distribution to Fortive shareholders of record as of the close of business on June 16, 2025 (the “Record Date”) of all of the issued and outstanding shares of Ralliant common stock held by Fortive. Each Fortive shareholder as of the Record Date received one share of Ralliant common stock for every three shares of Fortive common stock held on the Record Date. Ralliant’s common stock began “regular way” trading on the New York Stock Exchange under the ticker symbol “RAL” on June 30, 2025. For further discussion of the Separation refer to Note 1 of the Notes to the Consolidated and Combined Financial Statements included in the Company’s 2025 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2026 (the “Form 10-K”). Basis of Presentation Ralliant has historically operated as part of Fortive and not as a separate, publicly traded company. For the periods prior to the Separation, the accompanying unaudited combined condensed financial statements have been derived from Fortive’s historical accounting records of its Precision Technologies segment and are presented on a carve-out basis. All revenues and costs as well as assets and liabilities directly associated with the business activity of Ralliant are included as a component of the financial statements. The financial statements also include allocations of certain general, administrative, sales and marketing expenses and cost of sales from Fortive’s corporate office and from other Fortive businesses to Ralliant and allocations of related assets, liabilities, and Net Former Parent investment, as applicable. The allocations have been determined on a reasonable basis; however, the amounts are not necessarily representative of the amounts that would have been reflected in the financial statements had Ralliant been an entity that operated independently of Fortive. Related-party allocations are discussed further in Note 12. Following the Separation, the consolidated financial statements included the accounts of Ralliant and its wholly-owned subsidiaries and no longer included any allocations from Fortive. Accordingly: • The Consolidated Condensed Balance Sheets at April 3, 2026 and December 31, 2025 consisted of Ralliant’s consolidated balances. • The Consolidated Condensed Statements of Earnings, Statements of Comprehensive Income, Statements of Changes in Equity, and Statements of Cash Flows for the three months ended April 3, 2026 consisted of Ralliant’s consolidated results. The Combined Condensed Statements of Earnings, Statements of Comprehensive Income, Statements of Changes in Equity, and Statements of Cash Flows for the three months ended March 28, 2025 consisted of the combined results of the Ralliant businesses. Prior to the Separation, Ralliant was dependent upon Fortive for all of its working capital and financing requirements under Fortive’s centralized approach to cash management and financing of its operations. Because the Company was part of Fortive during the three months ended March 28, 2025, only cash, cash equivalents, and borrowings clearly associated with Ralliant and related to the Separation have been included in these combined condensed financial statements. Other financial transactions relating to the business operations of the Company during the three months ended March 28, 2025 were accounted for through the Net Former Parent investment account of the Company. 6 Net Former Parent investment, which includes retained earnings prior to the Separation, represents Fortive’s interest in the recorded net assets of Ralliant. All significant transactions between Ralliant and Fortive have been included in the accompanying combined condensed financial statements for the three months ended March 28, 2025. Transactions with Fortive are reflected in the accompanying combined condensed statement of changes in equity as “Net transfers to Former Parent.” All significant intercompany accounts and transactions between the operations comprising Ralliant have been eliminated in the accompanying Consolidated and Combined Condensed Statements of Earnings for the three months ended April 3, 2026 and March 28, 2025 and the Consolidated Condensed Balance Sheets as of April 3, 2026 and December 31, 2025. The Company prepared the unaudited consolidated and combined condensed financial statements included herein in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the SEC applicable for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations; however, the Company believes the disclosures are adequate to make the information presented not misleading. The unaudited consolidated and combined condensed financial statements included herein should be read in conjunction with the audited consolidated and combined financial statements and the notes thereto included within the Form 10-K. In the Company’s opinion, the accompanying financial statements contain all adjustments, which consist of normal and recurring accruals necessary to fairly present its financial position, results of operations, comprehensive income, equity, and cash flows for such period. During the first quarter of 2026, the Company reclassified sales by geography to better align sales to the end customer. Prior year information has been recast to conform to current year presentation. Such change to the Company’s reporting process is not material to the Company’s consolidated and combined financial statements. The consolidated and combined condensed financial statements contained herein may not be indicative of future performance and the combined condensed financial statements for the three months ended March 28, 2025 do not necessarily reflect what the combined condensed statement of earnings and combined condensed statement of cash flows would have been had the Company operated as a separate business entirely during such period. Segment Presentation Ralliant operates through two reportable segments that are also its two operating segments Sensors and Safety Systems, which provides leading power grid monitoring solutions, safety systems for mission critical aero, defense, and space applications, and sensing solutions for critical environments where uptime, precision, and reliability are essential, and Test and Measurement, which provides precision test and measurement instruments, systems, and services. Allowances for Credit Losses All trade accounts and unbilled receivables are recorded in the Consolidated Condensed Balance Sheets and were adjusted for any write-offs and net of allowances for credit losses. The allowances for credit losses represent management’s best estimate of the credit losses expected from unbilled and trade accounts receivable portfolios over the life of the underlying assets. Additions to the allowances are charged to current period earnings, amounts determined to be uncollectible are charged directly against the allowances, while amounts recovered on previously written-off accounts increase the allowances. During the three months ended April 3, 2026 and March 28, 2025, the activity was immaterial. 7 New Accounting Pronouncements Issued and Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740) — Improvements to Income Tax Disclosures (“ASU 2023-09”), which amends certain disclosure requirements related to income taxes on an annual basis. This standard is effective for fiscal year ending December 31, 2025, and interim periods thereafter. For the year ended December 31, 2025, the Company adopted ASU 2023-09 using a prospective basis and updated the applicable annual disclosure to align with the new standard in Note 7. In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) — Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides all entities with a practical expedient in developing reasonable and supportable forecasts as part of estimating expected credit losses. An entity may elect the practical expedient when measuring credit losses, to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. This standard is effective for the fiscal year ending December 31, 2026 and interim periods beginning with the first quarter of 2026, with early adoption permitted, and should be applied prospectively. On January 1, 2026, the Company adopted the practical expedient described in ASU 2025-05 using a prospective approach and updated the allowance for credit losses recorded on the Consolidated Condensed Balance Sheet as of April 3, 2026 to align with the new standard. The adoption did not have a material impact on the consolidated financial statements. Issued But Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) — Disaggregation of Income Statement Expenses , which amends the disclosure requirements related to certain costs and expenses on an interim and annual basis. This standard is effective for fiscal year ending December 31, 2027, and interim periods within fiscal year ending December 31, 2028. This standard should be applied either on a prospective basis or retrospective basis. The adoption of the standard is not expected to impact the Company’s consolidated and combined financial statements; however, the Company is currently evaluating the impact of the new disclosure requirements on the notes to the consolidated and combined financial statements. Upon adoption, the Company will update the applicable annual and interim disclosures to align with the new standard. In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) — Targeted Improvements to the Accounting for Internal-Use Software , which replaces the previous stage-based model for capitalizing internal-use software development costs, with requirements where capitalization begins when management authorizes and commits to funding a project and it is probable the project will be completed and used as intended. This standard is effective for the fiscal year ending December 31, 2028 and interim periods beginning with the first quarter of 2028, with early adoption permitted. The entity can elect to apply the new guidance through a prospective, modified transition, or retrospective approach. The Company is currently evaluating the effects of this standard on its consolidated and combined financial statements. NOTE 2. GOODWILL The following is a rollforward of the Company’s carrying value of goodwill by segment: Sensors and Safety Systems Test and Measurement Total Balance, December 31, 2025 $ 771.1 $ 901.3 $ 1,672.4 Foreign currency translation ( 1.1 ) ( 54.0 ) ( 55.1 ) Balance, April 3, 2026 $ 770.0 $ 847.3 $ 1,617.3 8 NOTE 3. FAIR VALUE MEASUREMENTS Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value for assets and liabilities required to be carried at fair value, and provide for certain disclosures related to the valuation methods used within the valuation hierarchy as established within the accounting standards. This hierarchy prioritizes the inputs into three broad levels as follows: • Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation. • Level 3 inputs are unobservable inputs based on the Company’s assumptions. A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Financial assets and liabilities that are measured at fair value on a recurring basis were as follows: Quoted Prices in Active Market (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total April 3, 2026 Deferred compensation liabilities $ — $ 10.1 $ — $ 10.1 December 31, 2025 Deferred compensation liabilities $ — $ 9.3 $ — $ 9.3 Certain management employees participate in the Company’s nonqualified deferred compensation program that permits such employees to defer a portion of their compensation, on a pretax basis, until after their termination of employment. All amounts deferred under such plan are unfunded, unsecured obligations. These amounts are recorded as a component of the Company’s compensation and other post-retirement benefits accruals within Other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets. Participants may choose among alternative earning rates for the amounts they defer, which are primarily based on investment options within Ralliant’s defined contribution plans for the benefit of U.S. employees (except that the earnings rates for amounts contributed unilaterally by the Company are entirely based on changes in the value of Ralliant common stock). Changes in the deferred compensation liability under these programs are recognized based on changes in the fair value of the participants’ accounts and are recorded within Selling, general and administrative expenses in the Consolidated and Combined Condensed Statements of Earnings and impact cash flows from operating activities. Non-recurring Fair Value Measurements Certain non-financial assets, primarily property, plant, and equipment, goodwill, and intangible assets, are not required to be measured at fair value on a recurring basis and are reported at their carrying value. However, these assets are required to be assessed for impairment, at least annually for goodwill and other indefinite-lived intangible assets, or whenever events or circumstances indicate that their carrying value may not be fully recoverable. The Company evaluated events or circumstances that may indicate the carrying value of its non-financial assets may not be fully recoverable during the three months ended April 3, 2026 and March 28, 2025, and recorded no impairments. Fair Value of Financial Instruments As of April 3, 2026 and December 31, 2025, the Company’s long-term debt was categorized as Level 2. The Company’s fair value of long-term borrowings approximates their carrying amount due to the variable market-based interest rate. The fair value of cash and equivalents, trade accounts receivable, net, and trade accounts payable, approximates their carrying amount due to the short-term maturities of these instruments. 9 NOTE 4. FINANCING The components of the Company’s long-term debt were as follows: Effective Interest Rate April 3, 2026 December 31, 2025 USD Term Loan due March 2029 4.95 % $ 550.0 $ 530.8 USD Term Loan due June 2028 4.83 % 600.0 619.2 Long-term debt, principal amounts 1,150.0 1,150.0 Less: aggregate unamortized debt discounts, premiums, and issuance costs 1.7 1.2 Long-term debt, carrying value $ 1,148.3 $ 1,148.8 Less: current portion of long-term debt, carrying value — 530.4 Long-term debt, net of current maturities $ 1,148.3 $ 618.4 Amendment to Credit Agreement On March 30, 2026, Ralliant entered into Amendment No. 2 (the “Second Amendment”) to the Credit Agreement dated as of May 15, 2025 (the “Credit Agreement”). The Second Amendment, among other things, (i) refinanced the $ 530.8 million then outstanding under the term loan due December 2026 with a $ 550.0 million term loan due March 2029 that includes an applicable borrowing rate thereunder that is 12.5 basis points higher than that of the previous rate; (ii) reduced the amount outstanding under the then outstanding term loan due June 2028 from $ 619.2 million to $ 600.0 million, and decreased the applicable borrowing rate thereunder by 12.5 basis points; and (iii) removed the 85 % cap on netting cash and cash equivalents outside of the United States for purposes of calculating the Company’s consolidated net leverage ratio. Ralliant incurred immaterial debt issuance costs associated with the Second Amendment. All other material terms of the Credit Agreement, as previously amended by Amendment No. 1 thereto, remain unchanged. Refer to Note 9 in the Company’s Notes to the Consolidated and Combined Financial Statements included in the Form 10-K for additional details. The term loans under the Credit Agreement contain customary covenants. None of these covenants are considered restrictive to Ralliant’s operations. As of April 3, 2026, Ralliant was in compliance with all of the covenants under the Credit Agreement, as amended. 10 NOTE 5. ACCUMULATED OTHER COMPREHENSIVE INCOME Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. The changes in Accumulated Other Comprehensive Income (Loss) (“AOCI”) by component are summarized below: Foreign currency translation adjustments Pension & post-retirement plan benefit adjustments (a) Total For the Three Months Ended April 3, 2026: Balance, December 31, 2025 $ ( 229.8 ) $ ( 15.1 ) $ ( 244.9 ) Other comprehensive income before reclassifications: Decrease ( 68.5 ) — ( 68.5 ) Income tax impact 2.6 — 2.6 Other comprehensive loss before reclassifications, net of income tax expense ( 65.9 ) — ( 65.9 ) Amounts reclassified from AOCI into income: Increase — 0.2 0.2 Income tax impact — — (c) — Amounts reclassified from AOCI into income, net of income tax expense — 0.2 0.2 Net current period other comprehensive (loss) income ( 65.9 ) 0.2 ( 65.7 ) Balance, April 3, 2026 $ ( 295.7 ) $ ( 14.9 ) $ ( 310.6 ) For the Three Months Ended March 28, 2025: Balance, December 31, 2024 $ ( 474.5 ) $ ( 16.8 ) $ ( 491.3 ) Other comprehensive income before reclassifications: Increase 94.3 — 94.3 Income tax impact ( 8.5 ) — ( 8.5 ) Other comprehensive income before reclassifications, net of income tax expense 85.8 — 85.8 Amounts reclassified from AOCI into income: Increase — 0.2 (b) 0.2 Income tax impact — — (c) — Amounts reclassified from AOCI into income, net of income tax expense — 0.2 0.2 Net current period other comprehensive income 85.8 0.2 86.0 Balance, March 28, 2025 $ ( 388.7 ) $ ( 16.6 ) $ ( 405.3 ) (a) Includes balances relating to defined benefit plans, supplemental executive retirement plans, and other postretirement employee benefit plans. (b) This component of AOCI is included in the computation of net periodic pension cost (refer to Note 10 in the Company’s Notes to the Consolidated and Combined Financial Statements included in the Form 10-K for additional details). (c) The income tax impact amount was rounded to zero. NOTE 6. SALES Ralliant derives revenue primarily from the sale of products, with additional revenue from the sale of services. Revenue is recognized when control of promised products or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services. Product sales include revenue from the sale of products and equipment. Service sales include revenues from extended warranties, maintenance contracts or services, and services related to previously sold products. 11 Contract Liabilities — The Company’s contract liabilities consist of deferred revenue generally related to customer deposits received in advance of performance under the contract, extended warranty sales, and product maintenance agreements, where the Company generally receives up-front payment and recognizes revenue over the service or support term. The Company classifies deferred revenue as current or noncurrent based on the timing of when it expects to recognize revenue. The noncurrent portion of deferred revenue is recorded within Other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets. The Company’s contract liabilities consisted of the following: April 3, 2026 December 31, 2025 Deferred revenue - current $ 159.8 $ 154.6 Deferred revenue - noncurrent 39.9 38.7 Total contract liabilities $ 199.7 $ 193.3 In the three months ended April 3, 2026, the Company recognized $ 44.4 million of revenue related to its contract liabilities at December 31, 2025. The change in the Company’s contract liabilities from December 31, 2025 to April 3, 2026 was primarily due to revenue recognized as products were delivered to customers. Remaining Performance Obligations — Ralliant’s remaining performance obligations represent the transaction price of firm, non-cancelable orders, for which work has not yet been performed. The Company has excluded performance obligations with an original expected duration of one year or less from the amounts below. The aggregate remaining performance obligations by segment were: April 3, 2026 Test and Measurement $ 54.2 Sensors and Safety Systems 3.8 Total remaining performance obligations $ 58.0 The majority of remaining performance obligations are related to service and support contracts, which the Company expects to fulfill approximately 60 % within the next two years , approximately 75 % within the next three years , and substantially all within four years . Disaggregation of Revenue The Company disaggregates revenue from contracts with customers by geographic locations and end markets for each of its segments as the Company believes it best depicts how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors. For the three months ended April 3, 2026 and March 28, 2025, no country other than those presented had material sales individually. 12 Disaggregation of revenue for the three months ended April 3, 2026 was: Total Sensors and Safety Systems Test and Measurement Geographic: United States $ 286.0 $ 203.4 $ 82.6 China 78.4 30.8 47.6 All other 170.2 90.2 80.0 Total $ 534.6 $ 324.4 $ 210.2 End markets: Industrial manufacturing $ 108.7 $ 108.7 $ — Defense and space 93.0 93.0 — Utilities 73.5 73.5 — Other 49.2 49.2 — Diversified electronics 110.8 — 110.8 Communications 63.2 — 63.2 Semiconductors 36.2 — 36.2 Total $ 534.6 $ 324.4 $ 210.2 Disaggregation of revenue for the three months ended March 28, 2025 was: Total Sensors and Safety Systems Test and Measurement Geographic: United States $ 244.2 $ 179.5 $ 64.7 China 72.4 28.3 44.1 All other 165.2 85.5 79.7 Total $ 481.8 $ 293.3 $ 188.5 End markets: Industrial manufacturing $ 101.3 $ 101.3 $ — Defense and space 77.2 77.2 — Utilities 70.9 70.9 — Other 43.9 43.9 — Diversified electronics 96.1 — 96.1 Communications 53.9 — 53.9 Semiconductors 38.5 — 38.5 Total $ 481.8 $ 293.3 $ 188.5 NOTE 7. INCOME TAXES Ralliant’s effective tax rate was 16.5 % for the three months ended April 3, 2026 compared with 12.8 % for the three months ended March 28, 2025. The increase in the effective tax rate for the three months ended April 3, 2026 compared with the three months ended March 28, 2025 was primarily attributable to the effects of various tax credits and deductions provided by law, including those associated with state income taxes, U.S. international taxes, non-deductible executive compensation, and changes in the Company’s uncertain tax position reserves. Ralliant’s effective tax rate for the three months ended April 3, 2026 differs from the U.S. federal statutory rate of 21% due primarily to credits and deductions provided by law. 13 NOTE 8. STOCK-BASED COMPENSATION The Ralliant Corporation 2025 Stock Incentive Plan (the “Stock Plan”) provides for the grants of stock appreciation rights, restricted stock units (“RSUs”) and performance stock units (“PSUs”) (collectively, “Stock Awards”), stock options, or any other stock-based awards. For a full description of the Stock Plan, refer to the disclosures in Note 15 of the Notes to the Consolidated and Combined Financial Statements included in the Form 10-K. Changes with respect to Stock Awards granted under the Stock Plan are described below. Stock Awards Granted Ralliant granted PSUs under the Stock Plan for the first time during the three months ended April 3, 2026. PSUs are subject to both market and performance-based conditions. For awards granted after the Separation under the Stock Plan, the fair values of RSUs and PSUs subject to performance-based conditions were measured using the closing price of Ralliant’s common stock on the date of grant. The fair value of the market-based portion of PSUs was determined using a Monte Carlo pricing model. PSUs are entitled to dividend equivalent rights, which are subject to the same performance and vesting conditions as the underlying awards. Dividend equivalent rights do not carry voting rights, and shares underlying PSUs are not considered issued or outstanding until the awards vest and shares are issued. For RSUs granted prior to 2026, the grant-date fair value was adjusted for the absence of dividend rights during the vesting period. Beginning in 2026, RSUs are entitled to dividend equivalent rights during the vesting period, which are subject to the same vesting conditions as the underlying awards; accordingly, the fair value of RSUs granted in 2026 and thereafter is not adjusted for dividends forgone prior to vesting. No stock options were granted during the three months ended April 3, 2026. Under the Stock Plan, the Company granted the following Stock Awards during the three months ended April 3, 2026: RSUs: Number of awards 0.6 Fair value per share $ 45.89 PSUs: Number of awards 0.2 Weighted-average fair value per share $ 46.76 The estimated fair value for the market-based portion of PSUs was calculated using a Monte Carlo pricing model based on the following assumptions for those granted in the three months ended April 3, 2026: Risk-free interest rate 3.3 % Volatility (a) 39.1 % Dividend yield — % (a) Expected volatility is the measure of the amount by which the stock price has fluctuated or is expected to fluctuate. As the Company does not have sufficient historical data, peer volatility was used instead, which was calculated using an average of the expected term-matching lookback volatilities of peer companies as of the grant date. Stock-Based Compensation Expense Ralliant recognizes compensation expense for stock-based awards over the requisite service period, which is generally the vesting period, but may be shorter if an employee becomes retirement eligible prior to the end of the stated vesting period. Ralliant estimates pre-vesting forfeitures at the time of grant based on historical experience and revises those estimates in subsequent periods as actual forfeitures experience differs. Ultimately, the total compensation expense recognized will equal the grant date fair value of awards that actually vest. 14 PSUs provide for the issuance of shares of Ralliant’s common stock at no cost to the holder and vest between 0 % and 200 % of the target number of shares based on achievement of specified performance conditions. PSUs granted in 2026 vest based on achievement of a combination of an internal growth metric and relative total stockholder return compared with the Standard & Poor’s 400 Mid Cap Index, each measured over a three-year performance period. PSUs will vest following the end of the performance period based on achievement and certification of the performance conditions. Stock-based compensation has been recognized as a component of Selling, general and administrative expenses in the Consolidated and Combined Condensed Statements of Earnings based on the portion of the awards that are ultimately expected to vest. NOTE 9. COMMITMENTS AND CONTINGENCIES Legal Proceedings Ralliant is, from time to time, subject to a variety of litigation and other proceedings incidental to Ralliant’s business, including lawsuits involving claims for damages arising out of the use of its products and services, claims relating to intellectual property matters, employment matters, commercial disputes, and personal injury as well as regulatory investigations or enforcement. Ralliant may also become subject to lawsuits as a result of past or future acquisitions or as a result of liabilities retained from, or representations, warranties, or indemnities provided in connection with divested businesses. Some of these lawsuits may include claims for punitive and consequential as well as compensatory damages. Based upon Ralliant’s experience, current information, and applicable law, Ralliant does not believe that any currently pending legal proceedings or claims will have a material adverse effect on Ralliant’s financial position, results of operations, or cash flows. There have been no material changes to the disclosures in Note 14 of the Notes to the Consolidated and Combined Financial Statements included in the Form 10-K. Warranty Costs Ralliant generally accrues estimated warranty costs at the time of sale. In general, manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly, and appropriately maintained. Warranty period terms depend on the nature of the product and range from 90 days up to the life of the product. The amount of the accrued warranty liability is determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor, and, in certain instances, estimated property damage. The accrued warranty liability is reviewed on a quarterly basis and may be adjusted as additional information regarding expected warranty costs becomes known. During the three months ended April 3, 2026 and March 28, 2025, warranty related activity was immaterial. Leases Operating lease costs for each period are presented as follows: Three Months Ended April 3, 2026 March 28, 2025 Operating lease costs $ 5.0 $ 5.0 Supplemental balance sheet and cash flow information related to operating leases for each period is presented as follows: April 3, 2026 December 31, 2025 Right-of-use (“ROU”) assets (a) $ 73.6 $ 68.4 Operating lease liabilities (b) $ 77.9 $ 74.2 (a) ROU assets are recorded in the Consolidated Condensed Balance Sheets within Other assets. (b) Operating lease liabilities are recorded in the Consolidated Condensed Balance Sheets within Accrued expenses and other current liabilities and Other long-term liabilities. 15 The increase in ROU assets and operating lease liabilities was primarily related to the commencement of the corporate headquarters lease during the three months ended April 3, 2026. Three Months Ended April 3, 2026 March 28, 2025 Cash paid for operating leases $ 4.6 $ 4.0 ROU assets obtained in exchange for operating lease obligations $ 9.9 $ 0.4 NOTE 10. NET EARNINGS PER SHARE Net Earnings per Common Share Basic net earnings per share (“EPS”) is calculated by dividing net earnings attributable to common stockholders by the weighted average number of shares of common stock outstanding for the applicable period. Diluted EPS is similarly calculated, except that the calculation includes the dilutive effect of the assumed issuance of shares under stock-based compensation plans under the treasury stock method, except where the inclusion of such shares would have an anti-dilutive impact. Anti-dilutive options excluded from the diluted EPS calculation for the three months ended April 3, 2026 were 0.6 million. For the three months ended March 28, 2025, there were no anti-dilutive options. The total number of shares outstanding at the time of the Separation was 112.7 million and is utilized for the calculation of both basic and diluted EPS for all periods prior to the Separation. Information related to the calculation of net earnings per share of common stock is summarized as follows: Three Months Ended April 3, 2026 March 28, 2025 Numerator Net earnings $ 44.2 $ 63.9 Denominator Weighted average common shares outstanding used in basic earnings per share 112.4 112.7 Incremental common shares from: Assumed exercise of dilutive options and vesting of dilutive Stock Awards 0.8 — Weighted average common shares outstanding used in diluted earnings per share 113.2 112.7 Net earnings per common share - Basic $ 0.39 $ 0.57 Net earnings per common share - Diluted $ 0.39 $ 0.57 Share Repurchase Authorization On June 28, 2025, the Company’s Board of Directors (the “Board”) approved a share repurchase authorization of up to $ 200.0 million of the Company’s common stock. During the three months ended April 3, 2026, the Company repurchased 1.2 million shares of its common stock at an average price of $ 42.40 per share for a total cost of $ 50.5 million (including $ 0.5 million in taxes and fees), leaving $ 150.0 million remaining under the share repurchase authorization. Share repurchases are recorded within Treasury stock, at cost, in the Consolidated Condensed Balance Sheets. On May 8, 2026, the Board raised the share repurchase authorization to $ 500.0 million. The share repurchase authorization has no expiration date, does not obligate the Company to acquire any particular amount of shares, and may be suspended or discontinued at any time. 16 NOTE 11. SEGMENT INFORMATION Ralliant reports its results in two reportable segments that are also its two operating segments, consisting of Sensors and Safety Systems and Test and Measurement. Ralliant’s operating segments were determined based primarily on how the chief operating decision maker (“CODM”) views and evaluates the Company’s operations. Other factors including products and services, end markets served, and business cycle were also considered in determining the formation of operating segments. The Company's CODM is the chief executive officer. The CODM uses operating profit at the segment level as the measure of profitability to assess performance and allocate resources, including merger and acquisition targets. The CODM also compares the actual results to expectations in assessing the performance of the segments. Operating profit represents total revenue, less cost of sales, and operating expenses. Operating expenses generally include Selling, general, and administrative expenses and Research and development expenses, which are the significant expense categories regularly provided to the CODM. Depreciation expense is recorded within both Cost of sales and Selling, general, and administrative expenses. Amortization expense is recorded within Selling, general, and administrative expenses. Goodwill impairment, when incurred, is also separately disclosed by segment. The identifiable assets by segment are those used in each segment’s operations. Inter-segment amounts are not significant and are eliminated in the consolidated and combined totals. Unallocated costs and other costs are not considered part of the Company’s evaluation of reportable segment operating performance. The Sensors and Safety Systems segment provides leading power grid monitoring solutions, safety systems for mission critical aero, defense, and space applications, and sensing solutions for critical environments where uptime, precision, and reliability are essential. This includes advanced monitoring, protection, and diagnostic solutions for high-voltage electrical assets in power generation, transmission, and distribution. Sensors and Safety Systems’ energetic materials, ignition safety systems, and precision pyrotechnic devices are used in mission-critical applications such as satellite deployment, rocket propulsion initiation, aerial vehicle safety systems, and military defense systems. The Sensors and Safety Systems segment also provides premium sensing products encompassing liquid level, flow, and pressure sensors, motion sensors and components, and hygienic sensors. The Test and Measurement segment provides precision test and measurement instruments, systems, and services. Through its portfolio of industry leading solutions, including oscilloscopes, probes, source measuring units, semiconductor test systems, high-power bi-directional power supplies, and measurement analysis software packages, the Test and Measurement segment empowers scientists, engineers, and technicians to create and realize technological advances with greater efficiency, speed, and accuracy. Segment results for the three months ended April 3, 2026 were: Total Sensors and Safety Systems Test and Measurement Unallocated Corporate Costs and Other (a) Sales $ 534.6 $ 324.4 $ 210.2 $ — Cost of sales ( 262.3 ) ( 169.5 ) ( 92.8 ) — Operating expenses ( 204.2 ) ( 66.2 ) ( 120.6 ) ( 17.4 ) Operating profit (loss) 68.1 88.7 ( 3.2 ) ( 17.4 ) Non-operating income (expense), net Interest (expense) income, net ( 14.7 ) ( 0.1 ) 0.3 ( 14.9 ) Other non-operating expenses, net ( 0.5 ) — — ( 0.5 ) Earnings (loss) before income taxes $ 52.9 $ 88.6 $ ( 2.9 ) $ ( 32.8 ) Depreciation and amortization expenses $ ( 29.7 ) $ ( 3.3 ) $ ( 26.3 ) $ ( 0.1 ) Capital expenditures $ ( 8.7 ) $ ( 5.2 ) $ ( 2.4 ) $ ( 1.1 ) (a) Amounts primarily related to standalone public company costs. 17 Segment results for the three months ended March 28, 2025 were: Total Sensors and Safety Systems Test and Measurement Unallocated Corporate Costs and Other Sales $ 481.8 $ 293.3 $ 188.5 $ — Cost of sales ( 238.4 ) ( 151.4 ) ( 87.0 ) — Operating expenses ( 169.6 ) ( 54.9 ) ( 113.4 ) ( 1.3 ) Operating profit (loss) 73.8 87.0 ( 11.9 ) ( 1.3 ) Non-operating expense, net Other non-operating (expenses) income, net ( 0.5 ) ( 0.2 ) ( 0.3 ) — Earnings before income taxes $ 73.3 $ 86.8 $ ( 12.2 ) $ ( 1.3 ) Depreciation and amortization expenses $ ( 26.9 ) $ ( 3.4 ) $ ( 23.5 ) $ — Capital expenditures $ ( 5.6 ) $ ( 2.7 ) $ ( 2.9 ) $ — Segment Assets: April 3, 2026 December 31, 2025 Sensors and Safety Systems $ 1,319.5 $ 1,306.4 Test and Measurement 2,058.0 2,149.3 Total segment assets 3,377.5 3,455.7 Other (a) 319.3 365.9 Total assets $ 3,696.8 $ 3,821.6 (a) Other represents corporate assets which consist primarily of cash and income tax assets. NOTE 12. RELATED-PARTY TRANSACTIONS In connection with the Separation, on June 27, 2025, Fortive and Ralliant entered into a Separation and Distribution Agreement as well as various other related agreements (collectively the “Agreements”) that govern the Separation and the relationships between Fortive and Ralliant going forward, including an employee matters agreement, a tax matters agreement, a transition services agreement, an intellectual property matters agreement, a Fortive Business System (“FBS”) license agreement, and a Fort Solutions license agreement. The Agreements provide for the allocation of assets, employees, liabilities, and obligations (including investments, property, employee benefits, and tax-related assets and liabilities) between Fortive and Ralliant attributable to periods prior to, at, and after the Separation and govern certain relationships between Fortive and Ralliant after the Separation. Such Agreements are described further in the Form 10-K. Tax Matters Agreement In connection with the Separation, the Company entered into the Tax Matters Agreement with Fortive, that governs the parties’ respective rights, responsibilities and obligations with respect to taxes, including responsibility for tax liabilities, entitlement to tax refunds and other tax benefits, allocation of tax attributes, preparation and filing of tax returns, control of audits and other tax proceedings and other matters relating to taxes. Pursuant to the terms of the Tax Matters Agreement, Ralliant is required to reimburse Fortive or pay taxing authorities directly for an amount contractually agreed with Fortive of approximately $ 51.0 million, of which substantially all was paid in 2025. During the three months ended April 3, 2026, $ 0.8 million of tax transaction costs was paid. 18 Transition Services Agreement In connection with the Separation, the Company entered into the Transition Services Agreement with Fortive, pursuant to which Fortive and the Company will provide to each other certain specified services on a temporary basis, including various information technology, financial, and administrative services. The cost of these services are negotiated between the Company and Fortive as set forth in the Transition Services Agreement and were immaterial during the three months ended April 3, 2026. Allocations of Expenses Prior to the Separation Prior to the Separation, certain shared costs were allocated to Ralliant by Fortive, and were reflected as expenses in the Combined Condensed Statement of Earnings. For a full description of these related party expenses, refer to Note 18 in the Form 10-K. The amounts of related party expenses allocated to Ralliant from Fortive and its non-Ralliant subsidiaries were as follows: Three Months Ended March 28, 2025 Allocated corporate expenses $ 10.2 Directly attributable expenses: Insurance programs expenses 1.8 Medical insurance programs expenses 15.6 Deferred compensation program expenses 0.7 Total related party expenses $ 28.3 Revenue and Other Transactions Entered into in the Ordinary Course of Business Certain of Ralliant’s revenue transactions are related to contracts entered into in the ordinary course of business with Fortive and its affiliates. Ralliant’s sales to and purchases from Fortive were not material during the three months ended April 3, 2026 and March 28, 2025.