Fortive Raises 2026 EPS Guidance as Q3 Core Revenue Grows 7.2%

Fortive Corp. (NYSE: FTV) raised its full-year 2026 adjusted earnings guidance after third-quarter revenue increased 7.8%, led by strong growth in its Intelligent Operating Solutions segment. The company now expects adjusted earnings per share of $3.10 to $3.14, representing about 15% year-over-year growth at the midpoint.

Revenue for the quarter ended October 2 rose to $1.11 billion from $1.03 billion a year earlier. Core revenue, which excludes acquisition, divestiture and currency effects, grew 7.2%, comprising a 4.9% contribution from volume and 2.3% from price.

Adjusted EBITDA increased 9.5% to $338.8 million, while the adjusted EBITDA margin expanded by about 50 basis points to 30.6%. Fortive attributed the gain to adjusted gross-profit growth, operating leverage and structural cost savings, partly offset by investments intended to support growth.

Adjusted diluted EPS from continuing operations rose 13.2% to $0.77. Adjusted EBITDA growth and a lower share count following repurchases supported the increase, while higher interest and tax expense provided offsets. On a GAAP basis, net earnings from continuing operations were $172.5 million, or $0.57 per diluted share, compared with $117 million, or $0.35 per share, a year earlier.

Adjusted gross profit increased 6.5% to $692.6 million, but the adjusted gross margin contracted by about 80 basis points to 62.5%, primarily because of product mix. Operating leverage partly mitigated that pressure.

Intelligent Operating Solutions leads growth

Intelligent Operating Solutions generated revenue of $767.1 million, up 9.8% on a reported basis and 9.1% on a core basis. Fortive said the performance reflected growth in professional instrumentation, facilities and asset-lifecycle solutions, and gas detection.

The segment’s adjusted EBITDA rose 13.6% to $274.7 million, with its margin expanding by about 120 basis points to 35.8%. Adjusted gross-margin pressure from product mix was more than offset at the EBITDA level by gross-profit growth, operating leverage and structural cost savings, partly counterbalanced by growth investments.

Advanced Healthcare Solutions posted revenue of $340.4 million, an increase of 3.7% as reported and 3.1% on a core basis. Demand for healthcare consumables and software-as-a-service offerings supported the result, while capital equipment recorded modest growth.

The healthcare segment’s adjusted EBITDA declined 4.8% to $87.9 million, and its margin fell to 25.8% from 28.1% a year earlier. Fortive cited growth investments and the comparison with discrete cost benefits recorded in the third quarter of 2025, partly offset by operating leverage. Adjusted gross margin declined by about 90 basis points to 57.5%, mainly due to product mix.

Cash flow supports capital deployment

Fortive generated $283.8 million of free cash flow during the quarter. Trailing-12-month free cash flow reached $1.06 billion, equivalent to 109.5% of adjusted net income from continuing operations.

The company spent about $300 million to repurchase roughly 5 million shares during the quarter at an average price of $60.14. Since the July 2025 launch of the reconfigured Fortive following the separation of its former Precision Technologies segment, total repurchases have reached about $2.3 billion, covering approximately 43 million shares. Fortive also increased its regular quarterly dividend by about 17% year over year in the third quarter.

As of October 2, Fortive held $377.3 million in cash and equivalents and had $3.53 billion of debt on a principal basis. Net debt was $3.15 billion, while gross and net leverage stood at approximately 2.6 times and 2.4 times trailing adjusted EBITDA, respectively.

Management said its Fortive Accelerated strategy remains focused on organic growth through innovation, commercial investments and recurring customer value. Its capital-allocation priorities include organic investment, smaller bolt-on acquisitions, share repurchases and a modestly growing dividend.

The outlook remains subject to risks identified by the company, including economic instability, tariffs and trade restrictions, geopolitical conflicts, supply-chain constraints, currency movements, higher debt-related costs, cybersecurity incidents, regulation and Fortive’s ability to introduce new products, integrate acquisitions and execute its strategy. The company also cited potential obligations connected with the Ralliant separation. Historical results in the presentation treat Ralliant as a discontinued operation, with Fortive’s reported operating results referring to continuing operations unless otherwise indicated.