What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-27 compared with 2025-02-28 · 206 added, 167 removed, 260 unchanged (59% of the section changed)

2 unchanged sentences

The following discussion and analysis provides information management believes to be relevant to understanding the financial condition and results of operations of Solventum for the years ended December 31, 2025 and 2024.

Discussion, analysis and comparisons of the year ended December 31, 2023 that are not included in this Annual Report on Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Annual Report on Form 10-K for the year ended December 31, 2024 filed on February 28, 2025.

This discussion contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances.

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dollars, unless otherwise indicated.

Certain columns and rows within tables may not add up due to the use of rounded numbers.

Amounts reported within this Annual Report are rounded to the nearest million and the sum of the components may not equal the total amount reported due to rounding.

Additionally, certain columns and rows within tables may not sum due to rounding.

Unless the context otherwise requires, references to "Solventum" and the "Company" refer to (i) 3M’s Health Care Business prior to the Spin-Off as a carve-out business of 3M and (ii) Solventum Corporation and its subsidiaries following the Spin-Off.

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Operating Segments and Sales Change Information

Solventum manages its operations in four business segments:

MedSurg, Dental Solutions, Health Information Systems, and Purification and Filtration.

Solventum manages its operations in three reportable business segments:

MedSurg, Dental Solutions, and Health Information Systems.

On February 25, 2025, the Company entered into a Transaction Agreement to sell its Purification and Filtration business to Thermo Fisher Scientific Inc.

On June 25, 2025, the Company and Buyer entered into an Amended and Restated Transaction Agreement to exclude the Company’s drinking water filtration business (the "Water Business") from the scope of the Purification and Filtration business to be acquired by Buyer (such acquired business, the "Business").

On September 1, 2025, Solventum completed the sale of the Business to the Buyer in accordance with the terms of the Agreement.

The cash consideration paid to Solventum at closing was approximately $4 billion.

Refer to Note 3, "Acquisitions and Divestitures" for additional information.

References are made to organic sales change, which is defined as the change in net sales, absent the separate impacts on sales from foreign currency translation and acquisitions, net of divestitures.

Constant currency, as reflected in the tables below, is defined as the change in net sales absent the impact on sales from foreign currency translation.

Other, as comprised in the tables below, includes acquisition and divestiture-related activities.

Acquisitions include non-health care related supply agreements that conveyed from 3M to the Company at Spin-Off and sales from new supply agreements with 3M that commenced at Spin-Off.

Divestiture impacts include lost sales from the Company’s dental anesthetics business that was sold in August 2023 as well as lost sales from certain health care businesses retained by 3M India in connection with the Spin-Off.

Acquisitions include sales from Acera that was acquired in December 2025, non-health care related supply agreements that conveyed from 3M to the Company at Spin-Off and sales from new supply agreements with 3M that commenced at Spin-Off.

Divestiture impacts include lost sales from the Company’s Purification and Filtration business that was sold in September 2025, certain health care businesses retained by 3M India in connection with the Spin-Off, as well as impacts from other immaterial divested businesses.

Solventum believes this information is useful to investors and management in understanding ongoing operations and in analysis of ongoing operating trends.

Healthcare Market Drivers

Changing demographics

An aging population, the prevalence and incidence rates of chronic conditions, and a rising middle class are driving the demand for improved access to quality care.

Optimizing workflows to improve care quality and operational efficiency

Of the $5.3 trillion in annual U.S.

healthcare spending, an estimated 25% represents administrative costs that do not contribute to health outcomes and which we believe to be potentially wasteful based on overall spending data reported by the Centers for Medicare & Medicaid Services in the NHE Fact Sheet (available on CMS.gov as of January 14, 2026) and administrative spending estimates published in JAMA (Shrank et.

al., Waste in the US Health Care System:

Estimated Costs and Potential for Savings , published October 7, 2019).

As healthcare providers and payers face increasing reimbursement constraints and evolving payment models, the need to reduce avoidable administrative costs has become more acute.

Our solutions are designed to optimize workflows, enabling clinicians to be more productive by spending less time on administrative tasks and more time focused on improving the patient care experience.

Our solutions also support reducing infections and complications that lead to an increase in avoidable administrative and clinical costs.

Increasing digital technology and data-driven care delivery

Both clinicians and patients have shifted their preferences towards utilizing digitally enabled solutions to provide data-driven care.

Whether it is interactions with patients through a digital interface or the use of data, analytics, and artificial intelligence (AI) to support informed health decisions, the need for digital tools in the healthcare industry has grown over time.

Our solutions integrate digital processes, AI-enabled capabilities and data in multiple ways and across different parts of the healthcare industry and are intended to enable efficient and effective delivery of care.

Shifting care from the hospital to lower-cost care sites

Although hospitals continue to be a core site for delivery of care, patients are increasingly looking for flexibility of care when and where they need it.

Alternative care sites, such as ambulatory surgery centers, wound care clinics, retail pharmacies, and the home, are more affordable and accessible to patients.

We believe our solutions enable clinicians to extend their care delivery from acute to ambulatory to home settings without compromising the quality of care and while reducing the total cost of care.

Increasing demand for personalized care

Engaging patients in a personalized way allows clinicians to provide a better care experience while improving outcomes and reducing costs.

This spans several areas of healthcare, including customized orthodontic aligner treatments, and follow-up wound care at home.

We believe our solutions deliver personalized care options in a way that is patient-centric, scalable, and cost-effective.

Our ability to take advantage of these market opportunities will be subject to various risks, including general economic, business and market dynamic risks, the impact of our separation from 3M;

and the cost to service the debt we incurred in connection with the separation.

See Part I, Item 1A, "Risk Factors" in this Annual Report on Form 10-K, for a discussion of these risks, which you should consider carefully.

Sales and operating income by business segment:

The following tables contain sales and operating results by business segment for all periods presented.

The Company’s use of the term “NM” reflects results considered not material due to not having material activity in comparable prior years.

Refer to the section entitled "—Performance by Business Segment" below for discussion of sales change and operating performance.

Refer to Note 17 to the consolidated financial statements for additional information on business segments.

Refer to Note 18 to the consolidated financial statements for additional information on the Company's business segments.

Segment and Total Company Net Sales

Year ended December 31,

(Dollars in millions) 2024 2023 Total

Currency Impact

Other Organic

(Millions) 2025 2024 Reported Growth Currency Impact

Constant Currency Other Organic Growth

Segment Sales

Advanced Wound Care $ 1,883 $ 1,835 2.6 % 0.5 % 2.1 % 0.1 % 2.0 %

Infection Prevention and Surgical Solutions 2,934 2,802 4.7 0.5 4.2 (0.4) 4.5

MedSurg 4,817 4,637 3.9 0.6 3.3 (0.2) 3.5

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Purification and Filtration 497 709 (29.9) 1.1 (31.0) (36.5) 5.5

Corporate and Unallocated 59 — NM NM NM NM

All Other 302 306 (1.5) 0.3 (1.8) 4.3 (6.1)

Total Company $ 8,325 $ 8,254 0.9 % 0.6 % 0.3 % (3.0) % 3.3 %

Year ended December 31,

(Dollars in millions) 2023 2022 Total

Currency Impact

Other Organic

(Millions) 2024 2023 Reported Growth Currency Impact

Constant Currency Other Organic Growth

Segment Sales

Advanced Wound Care $ 1,835 $ 1,826 0.5 % (0.3) % 0.8 % (0.1) % 0.9 %

Infection Prevention and Surgical Solutions 2,802 2,805 (0.1) (0.8) 0.7 (0.7) 1.4

MedSurg 4,637 4,632 0.1 (0.6) 0.7 (0.5) 1.2

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Purification and Filtration 709 689 3.0 (0.6) 3.7 (0.9) 4.6

Corporate and Unallocated — — — — — —

All Other 306 262 16.7 (0.9) 17.6 18.8 (1.2)

Total Company $ 8,254 $ 8,197 0.7 % (0.5) % 1.2 % — % 1.2 %

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Year ended December 31,

(Dollars in millions) 2024 2023 2024 vs 2023 change

(Millions) 2025 2024 2025 vs 2024 change

Segment Operating Income

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Purification and Filtration 96 74 29.7

All Other 42 30 40.0

Corporate and Unallocated 390 (736) 153.0

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Year ended December 31,

(Dollars in millions) 2023 2022 2023 vs 2022 change

(Millions) 2024 2023 2024 vs 2023 change

Segment Operating Income

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Purification and Filtration 74 111 (33.3)

All Other 30 51 (41.2)

Corporate and Unallocated (736) (442) 66.5

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While the Company manages its businesses globally and believes its business segment results are the most relevant measure of performance, the Company also utilizes geographic area data as a secondary performance measure.

Sales are generally reported within the geographic area that originated the invoice to the Company's customer.

Sales are generally reported within the geographic area based on the location of the customer taking possession of the products or in which services are rendered.

Additional geographic financial information related to the Company’s operations is provided in Note 18 in the accompanying consolidated financial statements.

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Year ended December 31, 2025

United States International Worldwide

Net sales (millions) $ 4,749 $ 3,505 $ 8,254

(Millions) United States International Worldwide

Net sales $ 4,668 $ 3,657 $ 8,325

% of worldwide sales 56.1 % 43.9 % 100.0 %

Increase/(decrease)

3.2 % (2.5) % 0.7 %

Currency Impact — (1.2) (0.5)

Organic growth 3.7 % 2.7 % 3.3 %

Other (1.3) (5.1) (3.0)

1.7 % 0.6 % 1.2 %

Constant Currency 2.4 (2.4) 0.3

Currency Impact — 1.4 0.6

Reported Growth 2.4 % (1.0) % 0.9 %

Year ended December 31, 2024

United States International Worldwide

Net sales (millions) $ 4,603 $ 3,594 $ 8,197

(Millions) United States International Worldwide

Net sales $ 4,559 $ 3,695 $ 8,254

% of worldwide sales 55.2 % 44.8 % 100.0 %

Increase/(decrease)

3.4 % (2.3) % 0.8 %

Currency Impact — (1.0) (0.4)

Organic growth 1.2 % 1.4 % 1.2 %

Other 0.8 (1.0) —

3.4 % (0.9) % 1.4 %

Constant Currency 2.0 0.4 1.2

Currency Impact — (1.2) (0.5)

Reported Growth 2.0 % (0.8) % 0.7 %

Additional information beyond what is included in the preceding table is as follows:

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Organic growth was led by MedSurg and Health Information Systems.

• In the International geographic area, total sales decreased while organic sales increased.

Organic growth was led by Purification and Filtration.

Other is comprised of lost sales due to the divestiture of the Purification and Filtration business in September 2025.

• In the International geographic area, total sales declined while organic sales increased.

Organic growth was led by MedSurg and Dental Solutions.

Other is comprised of lost sales due to the divestiture of the Purification and Filtration business in September 2025.

Year ended 2024 results

• In the United States geographic area, all business segments saw organic sales growth year on year, led by Health Information Systems and MedSurg.

• In the International geographic area, total sales growth and organic sales growth decreased.

Organic growth decline in Purification and Filtration was partially offset by organic growth in MedSurg and Dental Solutions.

• In the United States geographic area, both total sales and organic sales increased.

Organic growth was led by MedSurg and Health Information Systems.

• In the International geographic area, total sales decreased while organic sales increased.

Organic growth was led by MedSurg and Purification and Filtration.

Managing currency risks

Prior to April 1, 2024, Solventum indirectly participated in 3M’s centrally managed hedging program, which utilizes a number of tools to manage currency risk including natural hedges such as pricing, productivity, hard currency, hard currency-indexed billings, and localizing source of supply.

3M also used financial hedges to mitigate currency risk.

Prior to April 1, 2024, Solventum indirectly participated in 3M’s centrally managed hedging program.

Starting in the second quarter of 2024, Solventum established its own hedging program.

Refer to Note 11 to the consolidated financial statements for additional details.

Foreign currency had a positive worldwide impact on sales for the year ended December 31, 2025 compared to 2024.

Solventum estimates that year-on-year foreign currency transaction effects, including hedging impacts, increased pre-tax income by approximately $6 million in 2025.

The stronger U.S.

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Costs of Product

Costs of product includes manufacturing, engineering and freight costs.

Costs of product includes manufacturing, engineering and logistics costs.

The Company operates a global supply chain and sourcing organization, including product sourced under master supply and transition manufacturing agreements with 3M.

As a result, the Company is impacted by changes in the global regulatory and economic environment, including tariffs.

The evolving regulatory and economic environment may impact our cost or ability to source products.

To the extent possible the Company takes actions to offset these costs or identify alternative sources of supply.

Costs of product, measured as a percent of sales of product, increased in 2025 when compared to 2024.

The increase was driven by increased costs due to the impact of higher costs on inventory sourced under the master supply and transition manufacturing agreements with 3M and due to the cost of other transition support provided by 3M.

The increase was driven by the impact of new tariffs of approximately $55 million, the full year impact from inventory sourced under the master supply and transition manufacturing agreements with 3M, and higher logistics costs, partially offset by benefits from cost savings programs.

Costs of product, measured as a percent of sales of product, increased in 2024 when compared to 2023.

Material and labor inflation, partially offset by benefits from both price and logistics costs, drove an increase of 0.7%.

The material and labor inflation was primarily driven by a 1.4% impact from a higher cost of inventory produced in 2022 but sold in 2023.

Costs of Software and Rentals

Costs of software and rentals includes compensation-related costs associated with installation, training and maintenance for our software products, and depreciation, maintenance and refurbishment costs and freight costs related to our hardware rental units.

Costs of software and rentals includes compensation-related costs associated with installation, training and maintenance for our software products, and depreciation, maintenance and refurbishment costs and logistics costs related to our hardware rental units.

Costs of software and rentals, measured as a percent of sales of software and rentals, decreased in 2025 as compared to 2024.

The decrease was due to the impact of lower external license fees, price and sales mix, primarily driven by higher sales of our revenue cycle management solution.

Costs of software and rentals, measured as a percent of sales of software and rentals, increased in 2024 as compared to 2023.

This increase was driven by higher compensation costs.

Costs of software and rentals, measured as a percent of sales of software and rentals, decreased in 2023 as compared to 2022 due to product mix from higher software sales.

Operating Expenses

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Research and development (R&D) 8.9 9.4 9.2 (0.5) 0.2

Gain on sale of business 18.6 — 0.7 18.6 (0.7)

Operating Income 26.2 12.6 20.6 13.6 (8.0)

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SG&A, measured as a percent of total net sales, increased in 2025 when compared to 2024.

The increase was driven by costs incurred to separate the Purification and Filtration business, higher compensation, including equity-based awards, and higher costs associated with both initial stand-up and ongoing operations to support a standalone company.

SG&A, measured as a percent of total net sales, increased in 2024 when compared to 2023.

The increase was driven by higher compensation, including equity-based awards, and higher costs associated with both initial stand-up and ongoing operations to support a standalone company.

SG&A, measured as a percent of total net sales, decreased slightly in 2023 when compared to 2022.

This decrease was driven by the impact of the gain related to the sale of the Company’s dental local anesthetic business of 0.7%, partially offset by higher expense due to restructuring charges of 0.5%.

Research and Development

R&D, measured as a percent of total net sales, decreased slightly in 2025 when compared to 2024 primarily due to reimbursement of a portion of our technical development costs from 3M related to our supply chain separation.

R&D, measured as a percent of total net sales, increased slightly in 2024 when compared to 2023 due to initial stand-up costs.

The Company continues to prioritize investment initiatives.

R&D, measured as a percent of total net sales, decreased slightly in 2023 when compared to 2022 as the Company prioritized investment initiatives.

Interest Expense, Net and Other Expense (Income), Net

Gain on Sale of Business

The gain on sale of business primarily relates to the Company's completed sale of the Purification and Filtration business in the third quarter of 2025, which resulted in a net gain of $1.5 billion for 2025.

Interest Expense, Net, Loss on Debt Extinguishment, Net, and Other Expense (Income), Net

Year ended December 31,

(Dollars in millions) 2024 2023 2022

(Millions) 2025 2024 2023

Interest expense, net $ 347 $ 367 $ —

Loss on debt extinguishment, net 82 — —

Other expense (income), net 39 64 25

Interest expense, net includes interest accrued on debt obligations, offset by interest income from cash and marketable securities.

Interest expense, net decreased in 2025 as compared to 2024 due to lower interest expense as a result of lower debt outstanding.

Interest expense, net increased in 2024 as compared to 2023 due to interest incurred on the February 2024 issuance of senior notes and March 2024 draw on the senior term loan credit facilities.

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This increase was partially offset by interest earned from cash and marketable securities held during the period.

There was no material activity in the years ended December 31, 2023 or 2022.

Other expense (income), net includes the non-service component of periodic pension cost, investment gains and losses, and currency-related impacts from foreign currency translation.

Loss on debt extinguishment, net includes charges incurred in the third quarter of 2025 from the differential between carrying value and the amount paid to acquire the tendered Senior Notes and related expenses.

Refer to Note 9 to the consolidated financial statements for additional information.

These charges were partially offset by the gain from interest rate swaps entered into and subsequently settled in connection with the sale of the Purification and Filtration business.

Refer to Note 11 to the consolidated financial statements for additional information.

Other expense (income), net includes the non-service component of periodic pension cost, investment gains and losses, and foreign currency transaction gain (loss).

Other expense (income), net decreased in 2025 as compared to 2024 primarily due to charges associated with the substantial liquidation of foreign operations completed as part of our separation from 3M.

Other expense (income), net increased in 2024 as compared to 2023 resulting from charges associated with the substantial liquidation of foreign operations completed as part of our separation from 3M in addition to foreign currency impacts and investment losses.

Other expense (income), net increased in 2023 as compared to 2022 due to investment losses and higher foreign currency transaction losses.

Provision (benefit) for Income Taxes:

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Effective tax rate 9.2 % 20.9 % 19.3 %

Refer to Note 7 to the consolidated financial statements for further discussion of income taxes.

The change in the effective tax rate in 2025 when compared to 2024 was primarily driven by impacts associated with the sale of the Purification and Filtration business.

Refer to Note 8 to the consolidated financial statements for additional detail on the Company's effective tax rate.

Performance by Business Segment

Note 17 to the consolidated financial statements provides an overview of Solventum’s business segments in addition to disclosures relating to Solventum’s segments.

We manage our operations in four business segments.

The reportable segments are MedSurg, Dental Solutions, Health Information Systems, and Purification and Filtration.

Note 18 to the consolidated financial statements provides an overview of Solventum’s reportable business segments.

Upon closing the sale of our Purification and Filtration business, we primarily manage our operations in three business segments:

MedSurg, Dental Solutions, and Health Information Systems.

Our Chief Operating Decision Maker evaluates segment operating performance using net sales and business segment operating income.

All Other primarily consists of the Water Business that was retained after the sale of the Purification and Filtration Business.

All Other also includes sales and cost of sales related to our agreements to supply 3M and other supply agreements assumed by the Company at Spin-Off related to legacy 3M businesses, which were historically included within Corporate and Unallocated.

Corporate and Unallocated

Certain items are maintained at the corporate level and not allocated to the segments ("Corporate and Unallocated").

Prior to Spin-Off, Corporate and Unallocated primarily included amortization of acquired intangible assets, restructuring and related charges, and benefits or costs related to capitalized manufacturing variances.

Corporate and Unallocated also includes Spin-Off and separation related costs.

Corporate and Unallocated primarily includes amortization of acquired intangible assets, restructuring and related charges, timing related benefits or costs associated with capitalized manufacturing variances, charges and recoveries related to certain litigation, transaction and employee retention costs related to the acquisition of Acera, and gains on sale of businesses.

In addition, Corporate and Unallocated includes Spin-Off and separation related costs.

Spin-Off and separation related costs include any costs incurred as part of our separation from 3M and costs to setup operations as a standalone company, including system implementations, manufacturing relocations, legal entity separations, certain equity awards granted as part of the Spin-Off, profit mark-ups on transition service arrangements with 3M and other one-time costs.

Corporate and Unallocated also includes sales and cost of sales related to our supply agreements with 3M and other supply agreements assumed by the Company at Spin-Off related to legacy 3M businesses.

Corporate and Unallocated also includes income and costs related to transition service agreements entered into in connection with the sale of the Purification and Filtration business.

Because Corporate and Unallocated includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis.

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Year ended December 31,

2024 2023 2022

Net sales (millions)

$ 4,637 $ 4,632 $ 4,585

(Millions) 2025 2024 2023

Net sales $ 4,817 $ 4,637 $ 4,632

Increase/(decrease)

1.2 % 1.6 % 2.7 %

Organic growth 3.5 % 1.2 %

Constant currency 3.3 0.7

Currency impact 0.6 (0.6)

0.1 % 1.0 % (1.0 %)

Reported growth 3.9 % 0.1 %

Business segment operating income (millions)

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Sales in MedSurg were up 3.9%:

• Organic growth was driven by volumes in our Infection Prevention and Surgical Solutions business, led by I.V.

site management.

Growth within our Advanced Wound Care business was led by volume growth in negative pressure wound therapy.

• Other primarily includes lost sales from certain health care businesses retained by 3M India in connection with the Spin-Off.

• Foreign currency translation positively impacted sales by 0.6%.

Business segment operating income margin decreased when compared to the same period last year.

The decrease was primarily driven by the impact of higher product costs due to tariffs, logistics and a full year of supply agreement mark-ups from 3M.

Year 2024 results:

Sales in MedSurg were up 0.1%:

• Organic sales growth of 1.2% was driven by volumes, primarily due to benefits from medical OEM products, I.V.

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The decrease was driven by higher costs to stand-up and operate our standalone structure after Spin-Off.

Year 2023 results:

Sales in MedSurg were up 1.0%:

• Organic sales growth of 1.6% was driven by price partially offset by lower volume.

Volume declines from our microfluidics and hand hygiene product lines, which benefited from higher sales during the pandemic, negatively impacted growth by 1.1%.

Business segment operating income margin increased when compared to the same period last year.

The increase was driven by spending control and price partially offset by material inflation.

Dental Solutions (16.2% of consolidated sales for the year ended December 31, 2025)

Year ended December 31,

2024 2023 2022

Net sales (millions)

$ 1,295 $ 1,329 $ 1,327

(Millions) 2025 2024 2023

Net sales $ 1,349 $ 1,295 $ 1,329

Increase/(decrease)

(0.4) % 1.6 % (0.1) %

(1.5) (1.0) —

Organic growth 3.3 % (0.4) %

Constant currency 3.1 (2.0)

Currency impact 1.1 (0.7)

(2.6) % 0.2 % (4.9) %

Business segment operating income (millions) $ 350 $ 442 $ 437

Reported growth 4.2 % (2.6) %

Business segment operating income $ 346 $ 350 $ 442

Percent change (1.1) % (20.8) %

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Year 2025 results:

Sales in Dental Solutions were up 4.2%:

• Organic growth was primarily driven by new product volume growth in restorative and prevention solutions, partially offset by a decline in traditional orthodontic products.

• Other is driven by lost sales from certain health care businesses retained by 3M India in connection with the Spin-Off.

• Foreign currency translation positively impacted sales by 1.1%.

Business segment operating income margin decreased when compared to the same period last year as a result of higher logistics costs, tariffs and other costs to operate our standalone structure after Spin-Off.

Year 2024 results:

Sales in Dental Solutions were down (2.6%):

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Business segment operating income margin decreased when compared to the same period last year as a result of higher costs to stand-up and operate our standalone structure after Spin-Off.

Year 2023 results:

Sales in Dental Solutions were up 0.2%:

• Positive volume and price growth of 3.5% from dental products were partially offset by declines in traditional orthodontic products.

• Other was negatively impacted by 1.1% due to the exit of Health Care operations in Russia.

Business segment operating income margin increased slightly when compared to the same period last year as price increases offset the cost of material inflation.

Health Information Systems (16.3% of consolidated sales for year ended December 31, 2025)

Year ended December 31,

2024 2023 2022

Net sales (millions)

$ 1,306 $ 1,285 $ 1,227

(Millions) 2025 2024 2023

Net sales $ 1,360 $ 1,306 $ 1,285

Increase/(decrease)

1.6 % 4.7 % 6.6 %

Organic growth 4.0 % 1.6 %

Constant currency 3.9 1.6

Currency impact 0.2 —

1.6 % 4.7 % 5.8 %

Business segment operating income (millions) $ 431 $ 423 $ 359

Reported growth 4.1 % 1.6 %

Business segment operating income $ 496 $ 431 $ 423

Percent change 15.0 % 1.9 %

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Sales in Health Information Systems were up 4.1%:

• Positive sales growth was driven by continued adoption of our 3M TM 360 Encompass TM .

• Positive organic growth was driven by expanded adoption of our Solventum™ 360 Encompass TM and performance management solutions.

• Clinician productivity solutions declined primarily due to impacts from changing market conditions.

Business segment operating income margin increased slightly when compared to the same period last year as product mix benefit due to higher software sales and lower professional services was partially offset by higher compensation costs.

• Foreign currency translation positively impacted sales by 0.2%.

Business segment operating income margin increased when compared to the same period last year, driven by sales price growth, product mix and lower external license fees.

Year 2024 results:

Sales in Health Information Systems were up 1.6%:

• Sales growth was broadly driven across the portfolio, including revenue cycle management, performance management and clinician productivity solutions.

Growth was driven by both new customers and product upgrades at existing customers.

• Sales growth was negatively impacted by delays to customers’ investments in IT, which were driven by ongoing stress on hospital budgets.

Business segment operating income margin increased when compared to the same period last year driven by both price increases and lower spending, partially offset by wage inflation.

Volume growth into higher margin products drove mix benefit.

• Positive sales growth was driven by continued adoption of our 3M TM 360 Encompass TM .

• Clinician productivity solutions declined primarily due to impacts from changing market conditions.

Purification and Filtration (6.0% of consolidated sales for the year ended December 31, 2025)

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Increase/(decrease)

2.1 % (3.6) % 7.1 %

Organic growth 5.5 % 4.6 %

Constant currency (31.0) 3.7

Currency impact 1.1 (0.6)

0.6 % (4.0) % 0.8 %

Reported growth (29.9) % 3.0 %

Business segment operating income (millions) $ 96 $ 74 $ 111

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Year 2025 results:

Sales in Purification and Filtration were down (29.9)%:

• Organic growth was driven by growth in both bioprocessing filtration and industrial filtration, which benefited from added production capacity, partially offset by declines in membrane OEM products.

• Other is driven by lost sales after the business was sold in September 2025.

• Foreign currency translation positively impacted sales by 1.1%.

Business segment operating income margin increased due to volume growth, favorable sales mix and a benefit resulting from the Company stopping depreciation on assets classified as held for sale, partially offset by higher costs to operate our standalone structure after Spin-Off.

Year 2024 results:

Sales in Purification and Filtration were up 3.0%:

• Primarily driven by higher volume growth in our bioprocessing filtration product category.

This growth was partially offset by our membranes OEM and drinking water filtration product categories.

This growth was partially offset by our membranes OEM.

• Other includes lost sales from certain health care businesses retained by 3M India in connection with the Spin-Off.

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Business segment operating income margin decreased primarily due to the negative impact from costs to stand-up and operate our standalone structure after Spin-Off.

Year 2023 results:

Sales in Purification and Filtration were down 4.0%.

• Sales growth was primarily impacted by inventory rebalancing at our bioprocessing filtration customers, which reduced sales by 5.4%.

This decline was partially offset by growth in our separation products.

Business segment operating income margin decreased primarily due to the negative impact of product mix from lower bioprocessing filtration sales.

Geographic Area Supplemental Information

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Total Company 20,584 21,981 22,007 $ 379 $ 380 $ 290 $ 1,326 $ 1,622 $ 1,457

Employment decreased slightly in 2024 when compared to 2023 and increased in 2023 when compared to 2022.

The above table includes the impact of acquisitions and other actions.

Employment decreased in 2025 when compared to 2024 and decreased slightly in 2024 when compared to 2023.

The above table includes the impact of acquisitions, divestitures, and other actions.

Capital Spending and Property, Plant and Equipment - Net:

Investments in property, plant and equipment enable growth across many diverse markets, helping to meet product demand and increasing manufacturing efficiency.

throughout the world with proprietary, automated, efficient, safe and sustainable processes.

The Company is increasing its investment in manufacturing and sourcing capability in order to more closely align its production capability with its sales in major geographic areas in order to best serve its customers throughout the world with proprietary, automated, efficient, safe and sustainable processes.

Capital spending is discussed in more detail below in the section entitled "—Cash Flows from Investing Activities."

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Please refer to the section entitled "Process for Disclosure and Recording of Liabilities Related to Legal Proceedings" (contained in "Legal Proceedings" in Note 12 to the accompanying consolidated financial statements) for additional information about such estimates.

Goodwill and Intangible Assets

The Company makes certain estimates and judgments in impairment assessments of goodwill.

Goodwill is tested for impairment annually in the fourth quarter of each year, as further discussed below, and is tested between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired.

The Company may assess qualitative factors for its reporting units to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount including goodwill.

Alternatively, the Company may bypass this qualitative assessment and perform a quantitative goodwill impairment test.

Impairment testing for goodwill is done at a reporting unit level, with all goodwill assigned to a reporting unit.

The Company's reporting units correspond to a business segment as this represents the lowest level of discrete financial information below sales that is available and is regularly reviewed by segment management.

An impairment loss would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit.

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As of December 31, 2025, goodwill totaled approximately $5.7 billion.

The Company has four reporting units, with the MedSurg reporting unit accounting for approximately 56 percent of the goodwill.

Based on the annual tests in the fourth quarter of 2024, 2023, and 2022, no goodwill impairment was indicated for any of the Company's reporting units.

Further, there were no events or changes in circumstances during the year ended December 31, 2024 that would indicate the carrying amount of a reporting unit may be impaired.

The Company has four reporting units that are assigned goodwill, with the MedSurg reporting unit accounting for approximately 74 percent of the goodwill balance.

In connection with our annual testing in the fourth quarter of 2025, no qualitative indicators of impairment were identified for any of the Company's reporting units.

For reporting units where quantitative testing was completed, the fair value exceeded the carrying value of the reporting unit by at least 65 percent.

On December 23, 2025, subsequent to our annual impairment test, the Company completed the acquisition of Acera.

Preliminary goodwill related to the acquisition was recognized and is included in the balance of our MedSurg reporting unit at December 31, 2025.

The Company will continue to monitor its reporting units for any triggering events or other indicators of impairment.

The Company acquires intangible assets in connection with business combinations, primarily developed technology, trade names, and customer relationships.

These acquired intangible assets are recorded at their estimated fair value as of the acquisition date.

The fair values of acquired intangible assets are determined using information available on the acquisition date and are based on estimates and assumptions that management believes are reasonable.

These estimates may include the amount

and timing of projected future cash flows attributable to each class of intangible asset, the discount rates used to present value those cash flows, and the assessment of the asset’s expected life cycle.

Significant assumptions vary by the class of intangible asset and the valuation technique applied.

New Accounting Pronouncements

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Financial Condition and Liquidity

The strength and stability of Solventum’s operating model and strong free cash flow capability provides financial flexibility and enables the Company to invest through business cycles.

Historically, Solventum generated positive operating cash flows and a majority of such cash flows were transferred to 3M as part of 3M’s cash pooling arrangements, the effect of which is presented as Net transfers to 3M in our consolidated financial statements.

Upon completion of the Spin-Off, Solventum has ceased participation in 3M's cash pooling arrangement and our cash and cash equivalents are held and used solely for our own operations.

As a result, the Company's capital structure, long-term commitments and sources of liquidity have changed significantly.

Solventum's principal sources of liquidity are our existing cash and cash equivalents, cash generated from operations, and access to both our revolving credit facility and commercial paper program, which the Company believes will satisfy our foreseeable operating needs, capital expenditures, and debt service requirements.

Discretionary cash may be allocated to strategic acquisitions, share repurchases, or repayment of debt obligations.

The Company's cash position reflects business results and a global cash management strategy that leverages liquidity management along with analyzing economic factors and tax considerations.

Debt and Credit Facilities

On February 16, 2024, the Company entered into a five-year $2.0 billion unsecured revolving credit facility expiring in 2029, an 18-month senior unsecured term loan facility of $500 million and a three-year senior unsecured term loan facility of $1.0 billion (collectively, the “ Facilities ” ).

In March 2024, the Company withdrew $1.48 billion under the Facilities.

The funds from the Facilities were transferred to 3M as partial consideration for the Spin-Off.

On February 27, 2024, Solventum issued $6.9 billion of Senior Notes in preparation for the payment of partial consideration to 3M in connection with the Spin-Off.

In August 2024, the Company prepaid $200 million of the outstanding principal amount from the 18-month senior unsecured term loan credit facility.

In December 2024, the Company prepaid an additional $100 million of the outstanding principal amount from the same facility.

The Company also had approximately $40 million in bank guarantees, surety bonds, and other similar instruments issued and outstanding at December 31, 2024.

These instruments are utilized in connection with normal business activities.

Refer to Note 9 of the Company's consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information.

The Company had approximately $82 million in bank guarantees, surety bonds, and other similar instruments issued and outstanding at December 31, 2025.

These instruments are utilized in connection with normal business activities.

Commercial Paper

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Any such issuance will mature within 364 days from date of issue.

There was no commercial paper outstanding as of December 31, 2024.

There was no commercial paper outstanding at December 31, 2025.

Cash, cash equivalents and marketable securities

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These balances are invested in bank instruments and other high-quality fixed income securities.

As of December 31, 2023, Solventum had $194 million of cash and cash equivalents, of which approximately $150 million was held by the Company’s foreign subsidiaries and $44 million was held in the United States.

There were immaterial amounts of marketable securities at both December 31, 2024 and December 31, 2023.

The increase from December 31, 2023 resulted from both cash retained by the Company at Spin-Off and operating cash flow generated by the Company subsequent to the Spin-Off.

Cash flows from operating, investing and financing activities are provided in the tables that follow.

There was an immaterial amount of marketable securities at December 31, 2025.

Cash flows from operating, investing and financing activities are provided in the table that follows.

Individual amounts in the consolidated statements of cash flows exclude the effect of exchange rate impacts on cash and cash equivalents, which are presented separately in the cash flows.

Thus, the amounts presented in the following operating, investing and financing activities tables reflect changes in balances from period to period adjusted for these effects.

Cash Flows from Operating Activities:

Year Ended December 31,

(Millions) 2025 2024 2023

Cash Flows from Operating Activities

Net income $ 479 $ 1,346 $ 1,343

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization 555 561 578

Postretirement benefit plan expense 34 41 64

Stock-based compensation expense 112 39 37

Gain on business divestitures — (56) —

Deferred income taxes (155) (142) (141)

Changes in assets and liabilities

Accounts receivable 43 (129) (32)

Due from related parties

Inventories (132) 23 (82)

Accounts payable 266 105 25

Due to related parties

All other operating activities 315 127 (113)

Net cash provided by operating activities $ 1,185 $ 1,915 1,679

Cash provided by (used in):

Operating activities $ 369 $ 1,185 $ 1,915

Investing activities 2,797 (380) (230)

Financing activities (3,057) (240) (1,552)

Effect of exchange rate changes on cash and cash equivalents 7 3 —

Net increase (decrease) in cash and cash equivalents $ 116 $ 568 $ 133

Operating Activities

In 2025, cash flows provided by operating activities decreased compared to 2024 primarily due to lower net income, excluding the gain on sale of the Purification and Filtration business, driven by higher costs to separate from 3M as well as higher transaction related activity including costs incurred in connection with closing the Purification and Filtration divestiture and higher receivables and other assets required to support the related transition service agreements.

In 2024, cash flows provided by operating activities decreased compared to 2023 primarily due to lower net income.

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This activity includes settlement of payables and receivables transferred at Spin-Off related to operating transactions between 3M and Solventum entities that occurred prior to the Spin-Off and transactions under the transition agreements with 3M.

In 2023, cash flows provided by operating activities increased compared to 2022 primarily due to decreases in inventories, increases in accounts payable, and higher year over year accrued compensation, partially offset by increases in accounts receivables.

The lower cash outflows from inventory was driven by supply chain stabilization.

Cash Flows from Investing Activities:

Year ended December 31,

(Millions) 2024 2023 2022

Cash Flows from Investing Activities

Purchases of property, plant and equipment $ (380) $ (290) (251)

Proceeds from sale of business — 60 —

Other — net — — (2)

Net cash used in investing activities $ (380) $ (230) (253)

Investing Activities

The increase in investing activities is related to proceeds from sale of the Purification and Filtration business in September 2025, partially offset by the payment to acquire Acera in December 2025.

Purchases of property, plant and equipment remained flat in 2025 as compared to 2024.

The company continues to focus capital spending on separation related activities as the Company relocates manufacturing and source of supply from 3M.

Purchases of property, plant and equipment increased in 2024 as compared to 2023.

The increase is primarily driven by additional separation related capital spending as the Company relocates manufacturing and source of supply from 3M.

In addition, the Company is focused on investments to support growth, renewal and maintenance programs, and environmental health services.

Overall property, plant and equipment spending increased in 2023 as compared to 2022 as the Company continues to invest in growth, productivity and sustainability.

Proceeds from sale of businesses include the sale of assets associated with the Company’s dental local anesthetic business.

Cash Flows from Financing Activities:

Year ended December 31,

(Millions) 2024 2023 2022

Cash Flows from Financing Activities

Repayment of debt $ (300) $ — —

Net transfers to 3M (8,251) (1,553) (1,456)

Proceeds from long-term debt, net of issuance costs 8,303 —

Other — net 8 1 (4)

Net cash provided by (used in) financing activities $ (240) $ (1,552) (1,460)

Financing Activities

Financing cash outflows increased in 2025 primarily due to the Company's repayment of $2.0 billion of senior notes via tender offers, including extinguishment costs, upon completion of the sale of the Purification and Filtration business and $870 million repayment of outstanding principal issued under the three year senior unsecured term loan credit facility.

In addition, the Company repaid the remaining $200 million aggregate principal amount outstanding under the eighteen month senior unsecured term loan credit facility.

2024 proceeds from long-term debt of $8.3 billion were related to the first quarter issuance of $6.9 billion in senior notes and $1.5 billion in senior term loan credit facilities.

The proceeds from these financing transactions were transferred to 3M in connection with the Spin-Off transaction, other than the amounts retained in order to achieve the $600 million retained cash target.

The Company repaid $300 million outstanding principle issued under the senior term loan credit facilities.

Financing cash outflows increased in 2023 due to higher net transfers to 3M.

During 2024, the Company repaid $300 million outstanding principal issued under the senior term loan credit facilities.

Material Cash Requirements from Known Contractual and Other Obligations:

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In limited circumstances, in the normal course of business, the Company enters into unconditional purchase obligations with various vendors that may take the form of, for example, take or pay contracts in which the Company guarantees payment to ensure availability of certain materials or services or to ensure ongoing efforts on capital projects.

Additionally, the Company enters into contractual obligations for cloud storage solutions, enterprise resource planning and other IT-related services.

The Company expects to receive underlying materials or services for these purchase obligations.

To the extent the limited amount of these purchase obligations fluctuates, it largely trends with normal-course changes in regular operating activities.

To the extent these purchase obligations fluctuate, it largely trends with normal-course changes in regular operating activities.

Additionally, contractual capital commitments represent a small part of the Company’s expected capital spending.

As of December 31, 2025, unconditional purchase obligations aggregated to approximately $330 million over the next five years, primarily comprised of IT-related obligations.

Financial Instruments

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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-K

Item 7. Management’s Discussion and Analysis