Fortive NYSE: FTV executives said the company posted a “strong start to the year” in the first quarter of 2026, supported by broad-based demand, continued progress on its Fortive Accelerated strategy, and a significant pace of share repurchases. Management reaffirmed full-year adjusted earnings guidance of $2.90 to $3.00 per share, while indicating results are trending toward the upper half of that range based on first-quarter performance and recent trends.
First-quarter results: revenue up, margins pressured by tariffs, EPS boosted by buybacks
President and CEO Olumide Soroye said Fortive delivered consolidated core revenue growth of “just over 5%,” adjusted EBITDA growth of 13%, and adjusted EPS growth of “over 25%.” He noted that core revenue growth was helped by roughly 150 basis points from additional year-over-year selling days in the quarter.
CFO Mark Okerstrom said Fortive reported nearly $1.1 billion in total revenue, up almost 8% year-over-year on a reported basis and up just over 5% on a core basis, also citing the selling-days tailwind. Okerstrom said price and volume grew in both segments and highlighted “strong growth in software revenue,” which he attributed to customer demand for “increasingly AI-driven new product releases.”
Profitability improved at the EBITDA level, but tariffs continued to weigh on gross margins. Okerstrom said adjusted gross margin was “just over 63%,” down about 100 basis points, driven “mostly by the net impact of tariffs that were introduced last year.” Adjusted EBITDA rose to $314 million, with adjusted EBITDA margin expanding about 140 basis points to “just over 29%,” driven by operating leverage, structural cost savings, and favorable foreign exchange, partly offset by continued investments in innovation and commercial initiatives.
Adjusted EPS was $0.70, up more than 25% year-over-year, which Okerstrom said reflected adjusted EBITDA growth and the year-over-year benefit of share repurchases. Fortive generated $194 million of free cash flow in the quarter, and Okerstrom said trailing 12-month free cash flow conversion remains “north of 100%.”
Segment performance: IOS steady; AHS sees software strength and modest capital improvement
In Intelligent Operating Solutions (IOS), Okerstrom said revenue rose about 8% reported and about 5% core, “modestly ahead of our expectations.” He estimated a roughly 100 basis point benefit from selling days for IOS, making normalized growth broadly consistent with the prior quarter. Okerstrom said core growth was driven by both price and volume, with solid performance across professional instrumentation, facility and asset lifecycle solutions, and gas detection.
At Fluke, Okerstrom said order volume was strong and “orders growth outpacing revenue growth,” with North America the strongest region and “another quarter of sequential improvement in Europe.” He also said facilities and asset lifecycle solutions growth accelerated versus the fourth quarter, supported by strength in multi-site facility maintenance and marketplace software in North America.
Gas detection also contributed to segment growth. Okerstrom said the business was buoyed by demand and share gains in its hardware-as-a-service line across North America, Europe, and the Middle East.
IOS adjusted gross margin was “just over 65%,” down about 150 basis points year-over-year, primarily due to mix and the net effect of tariffs. Segment adjusted EBITDA grew 8% to $255 million, while adjusted EBITDA margin was “just over 34%,” roughly in line with the prior-year period.
In Advanced Healthcare Solutions (AHS), Fortive reported revenue of $326 million, up about 8% reported and about 6% core. Okerstrom said the segment benefited from roughly 300 basis points of selling-days tailwind, and on a normalized basis the company saw “slight acceleration in growth versus last quarter.”
Growth was driven by demand for healthcare consumables, services, and software in North America. Okerstrom said low-temperature sterilization capital demand improved “modestly” in the quarter, though hospital spending pressures persist. He also said software products delivered “strong growth” due to demand for Fortive’s gastrointestinal case documentation solution.
AHS adjusted gross margin was about 59%, in line with the prior year, with modest operating leverage offset by tariffs. Segment adjusted EBITDA increased about 18% to $84 million, and adjusted EBITDA margin expanded about 200 basis points to “just under 26%.”
Strategy updates: AI-enabled launches, data center push, and recurring revenue initiatives
Soroye framed the quarter around the three pillars of the Fortive Accelerated strategy: faster profitable organic growth, disciplined capital allocation, and building investor trust. On growth, he said the company is increasing “innovation velocity” with new product launches, including Fluke’s CertiFiber Max data center testing solution introduced in late Q4. Soroye said customer response “continues to significantly exceed our expectations” and described pull-through into other Fluke offerings, including power quality, battery testing, imaging, and calibration solutions used in data center build-out and operations.
In healthcare, Soroye highlighted the launch of Provation Mira Documentation Assist, described as a real-time AI-powered, voice-driven documentation capability embedded in gastrointestinal procedural workflows.
Recurring revenue efforts also featured prominently. Soroye said recurring revenue grew faster than consolidated revenue in both segments, citing double-digit services growth at Fluke and “strong growth and share gains” in Industrial Scientific’s hardware-as-a-service product line.
During Q&A, Soroye said the company views AI as “a disruptive technology” and argued Fortive is using it to drive growth, citing facility and asset lifecycle (FAL) as an example. He said FAL grew faster than IOS core growth and that all operating brands contributed, “with ServiceChannel leading the pack,” particularly in North America. Soroye also pointed to “good” trends in metrics such as ARR, GDR, and NDR.
Data center exposure and end-market signals: strong orders, normal inventories, Middle East demand
Executives repeatedly pointed to data centers as a key opportunity for Fluke. In response to an analyst question, Soroye said Fortive is focused not only on construction and build-out, but the “larger and more durable opportunity for ongoing operations and maintenance” of data centers. He said Fluke already participates broadly in the “tool belt” for data centers and that emerging technologies such as optical switching could create incremental demand for products already in the portfolio.
On demand and orders, Soroye said first-quarter orders grew faster than revenue and were “broad-based across the two segments,” naming IOS businesses including Fluke, FAL, and Industrial Scientific, as well as AHS, including Advanced Sterilization Products (ASP). He said point-of-sale trends at Fluke were “solid,” book-to-bill was above one, backlogs were healthy, and channel inventories were “relatively normal” in the U.S. and “continue to get better outside the U.S.” For ASP consumables, he said low-temperature sterilization consumables remained durable even adjusting for selling days.
Asked about the Middle East, Soroye said gas detection demand was strong globally and that the company is seeing “increased demand” in the Middle East, adding, “We don’t think the rebuild is at the peak yet.” He emphasized, however, that Middle East sales are a “small part” of Fortive overall, representing a low single-digit percentage of total revenue.
Outlook and capital allocation: guidance reaffirmed; buybacks continue; tariffs expected to fade later in year
Fortive reaffirmed full-year 2026 adjusted EPS guidance of $2.90 to $3.00. Soroye said results are trending toward the upper half of the range. Okerstrom said the outlook assumes a continuation of Q1 market dynamics and reflects current tariff rates. He also said that based on current foreign exchange rates, Fortive expects full-year reported revenue of around $4.3 billion and continues to expect core growth of 2% to 3%, with results trending toward the upper end due to “strong order patterns.”
Okerstrom provided several modeling considerations, including a fourth-quarter headwind from four fewer year-over-year selling days, which he said would reduce revenue by $15 million to $20 million. He also outlined expected quarterly effective tax rates and said full-year net interest expense is expected to be “just over $135 million.” Based on what the company sees “today,” he said Q2 and Q3 adjusted EPS are expected to be broadly similar to Q1.
On tariffs and price/cost, Okerstrom said price/cost was “north of one” in the first quarter and that the company expects that to persist. He said tariffs have been a headwind to gross margin “even though they’re completely countermeasured from a bottom line perspective,” and he expects the gross margin headwind to persist “through partway through the third quarter” before dissipating as the company laps over countermeasures in the fourth quarter.
Capital allocation remained a major focus. Soroye said Fortive completed about $500 million of share repurchases in Q1 and has reduced its share count by “just over 10%” since the launch of “new Fortive” in July 2025. Okerstrom said the company finished the quarter at 2.8x gross debt to adjusted EBITDA after a modest increase in commercial paper to fund buybacks. He also said integration and value-creation plans for two small bolt-on acquisitions completed in Q4 are tracking to plan.
On M&A, Okerstrom said the company has revamped its approach with a focus on bolt-ons and rebuilt the team. He also said Corbin Walburger will join to lead corporate development globally. Okerstrom said Fortive is building pipeline and intends to deploy capital across organic growth, M&A, repurchases, and a “modest growing dividend” based on “best relative returns.”
About Fortive NYSE: FTV
Fortive Corporation NYSE: FTV is a diversified industrial technology company headquartered in Everett, Washington. The company was created through a spin‑off from Danaher Corporation in 2016 and has since focused on building a portfolio of professional instrumentation and industrial technology businesses. In 2020 Fortive completed a further portfolio separation with the spin‑off of Vontier, concentrating Fortive's activities on higher‑margin instrumentation, software and services.
Fortive's operations center on professional test and measurement, sensing and monitoring, software‑enabled solutions, and lifecycle services that support industrial and commercial customers.
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