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Fortive reported third-quarter revenue of $1.11 billion, above the consensus estimate of $1.05 billion. Adjusted earnings per share were $0.77, compared with the consensus estimate of $0.70.
The company reported revenue of $1.1 billion on a rounded basis, compared with $1.0 billion a year earlier. CFO Mark Okerstrom said price and volume grew in both segments, with demand for professional instruments, facilities software and gas detection products contributing to growth. Advanced Healthcare Solutions revenue grew 3.7% year over year, supported by sterilization equipment and consumables, biomedical testing and radiation monitoring.
Fortive’s operating margin rose to 21.3% from 15.5%. Its filing attributed part of the increase to prior-year separation-related stock compensation costs and tariff refunds. Free cash flow rose to $283.7 million from $135.8 million; Okerstrom said the quarter included an $18 million tariff-refund benefit in both GAAP earnings and free cash flow.
In July, Fortive had expected third-quarter adjusted EPS to rise very slightly year over year; Okerstrom said it rose over 13%.
| Q3 FY2026 | Q3 FY2025 | Change | |
|---|---|---|---|
| Revenue | $1.1 billion | $1.0 billion | 7.83% |
| Diluted EPS | $0.57 | $0.16 | 254.8% |
| Gross margin | 64.2% | 63.2% | 1.0 percentage point |
| Operating margin | 21.3% | 15.5% | 5.8 percentage points |
| Free cash flow | $283.7 million | $135.8 million | 108.9% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $0.74 | $0.71 | Beat by 4.23% |
| Revenue | $1.1 billion | $1.1 billion | Beat by 3.88% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
| Against its own guidance | For | Guided | Reported | Result |
|---|---|---|---|---|
| Revenue growth | Q2 FY2026 | 1.50% | 7.91% | Above the guide |
What management said on the call
CEO Olumide Soroye said Fortive’s investments in products, sales capabilities and recurring customer services were contributing to growth. In response to an analyst’s question about recurring revenue, he said both recurring and non-recurring sales grew in the quarter, with non-recurring revenue growing faster because of Fluke’s performance. He added that replacement cycles can give hardware revenue durability.
CFO Mark Okerstrom said Fluke’s order growth accelerated from the second quarter and its book-to-bill remained above one. He said growth in facilities and asset lifecycle software accelerated, led by ServiceChannel and Gordian. Soroye said customers were adopting AI-enabled features at ServiceChannel, while Provation was using its data to develop insights for healthcare customers.
Asked about data centers, Soroye said Fortive serves both construction and ongoing maintenance and is developing products for newer facilities. He said the company was adding specialized sales capacity globally but was constrained by the talent and capacity it wanted to build.
On healthcare, Soroye said U.S. hospital capital spending was improving but remained somewhat constrained, while procedure volumes remained healthy. He said Fortive was investing in its sterilization equipment installed base, sales capacity and product development to support growth in Advanced Healthcare Solutions.
Okerstrom said adjusted gross margin declined as some lower-margin products grew faster. Asked about inflation, he cited electrical and electronic components and freight, but said pricing and productivity measures more than offset those costs. He also explained that ServiceChannel’s role as merchant of record in some maintenance arrangements increases reported revenue and costs.
For the quarter ahead, Okerstrom said fewer selling days would weigh on reported revenue and core growth. He said Fortive expected Intelligent Operating Solutions core growth to exceed healthcare growth on a normalized basis.
Guidance
Fortive raised its full-year 2026 adjusted EPS guidance to $3.10–$3.14 from $2.95–$3.05. Okerstrom said the outlook assumes the market conditions experienced in the third quarter continue and reflects current tariff rates.
Fortive now expects full-year core revenue growth just north of 5%, compared with its earlier expectation of approximately 4%.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Revenue, Ahs Core | FY2026 | Fortive expects full-year core revenue growth to accelerate in its AHS business in FY2026. | — | — |
| Revenue, Ios Core | Q4 FY2026 | Fortive expects IOS core revenue growth to outperform AHS on a normalized basis in Q4 FY2026. | — | — |
| Tax rate | Q4 FY2026 | Fortive expects a Q4 FY2026 effective tax rate in the low double digits. | — | — |
| Revenue | FY2026 | $4.4 billion | $4.4 billion | Raised |
| EPS, non-GAAP | FY2026 | $3.10–$3.14 | $2.95–$3.05 | Raised |
| Revenue, Selling Days | Q4 FY2026 | $15.0 million–$20.0 million | — | New |
| EPS | FY2026 | $2.95–$3.05 | $2.90–$3.00 | Raised |
| Revenue | Q4 FY2026 | $15.0 million–$20.0 million | — | New |
| Revenue growth | FY2026 | 2.00%–3.00% | — | New |