Fortive Corporation

My name is Shamali and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to Fortive Corporation's fourth quarter and full year 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, press star then the number two. I would now like to turn the call over to Ms. Christina Jones, Vice President of Investor Relations. Ms. Jones, you may begin your conference.

Thank you, and thank you, everyone, for joining us on today's call. I am joined today by Illumide Chiroye, Fortis President and CEO, and Mark Okerstrom, Fortis CFO. During today's call, we present certain non-GAAP financial measures. Information required by Regulation G is available on the Investors section of our website at fortiv.com. We will also make forward-looking statements, including statements regarding events or developments that we expect or anticipate will or may occur in the future. These forward-looking statements are subject to a number of risks, and actual results might differ materially from any forward-looking statements that we make today. Information regarding these risk factors is available in our SEC filings, including our annual report on Form 10-K and the subsequent quarterly reports on Form 10-Q. These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements. Our statements on period-to-period increases or decreases refer to year-over-year comparisons unless otherwise specified, and our results and outlook discussed today are on a continuing operations basis. With that, I'll turn the call over to Olimide.

Thank you, Christina. Let me begin on slide three. Q4 was another quarter of solid execution by our new 40 team. With the first two quarters of performance now behind us and our 2026 strategic and financial plans firmly in place, our strong conviction in the road ahead continues to build. In July, we began our journey as new 40. united by one mission, aligned around two segments serving attractive end markets with strong circular tailwinds, and guided by a clear strategy with three pillars. Accelerate profitable organic growth, allocate capital with discipline, and build and maintain investor trust, all with the goal of delivering benchmark beating shareholder returns in the years ahead. Our Q3 and Q4 results reinforce our conviction in this path, While we are still early in the journey, we are diligently executing the Fortive Accelerator Strategy and sustaining the operational rigor that Fortive is known for. We enter 2026 with optimism, enthusiasm, and an unrelenting focus on execution. I have five key messages to cover today. First, our teams continue to execute well with the power of our Fortive business system. driving solid Q4 results ahead of our expectations. In Q4, we delivered core growth of just over 3%, adjusted EBITDA growth of 8%, and adjusted EPS growth of about 13%. We were pleased to see another quarter of growth acceleration in the business, knowing that we have even more growth upside ahead of us. Second, our strong key for earnings performance resulted in full-year adjusted EPS of $2.71, exceeding the high end of our guidance range of $2.63 to $2.67. Third, we continue to deploy capital in accordance with our disciplined approach, anchored in optimizing shareholder returns over the medium to long term. In the fourth quarter, we executed an additional $265 million of share repurchases, bringing total second half repurchases to $1.3 billion. Fourth, we are diligently progressing our 40 accelerated strategy to deliver benchmark beating shareholder returns. I'll spend a few minutes on this in the next slide. Finally, as we turn our focus to 2026, we are initiating full year 2026 adjusted EPS guidance of $2.90 to $3, representing approximately 9% year-over-year growth at a midpoint. Moving to slide four. Before we turn to our Q4 results, I'd like to highlight the progress we've made on each of the three 40 accelerated pillars. beginning with our focus on driving faster, profitable, organic growth. In terms of innovation acceleration, this quarter we continue to accelerate new product introduction velocity, including offerings aimed at high growth verticals. At Fluke, we launched a new data center testing solution, CertiFiberMax, with the fastest reporting industry, helping customers test and validate complex fiber systems quickly and accurately. At Service Channel, our third major product release of the year went live in Q4. This release enhances maintenance professional onboarding, work order visibility, compliance, and payment efficiency. On the commercial front, we continue to intensify our focus on faster growing end markets and regions where we have been making deliberate targeted investments. This quarter, we saw early signs that our targeted actions are resonating in the areas we've prioritized. Fluke delivered another strong quarter in data center. Industrial Scientific's expanded commercial coverage drove acceleration in EMEA, and our investment in a broader sales team for Fluke and ASP in India directly contributed to strong growth in the region. We also made progress in advancing the recurring elements of our portfolio, enhancing customer engagement and strengthening the durability of our revenue streams. In Q4, recurring revenue again grew faster than consolidated revenue, driven by continued strength in Flux maintenance software and deeply embedded data, as well as AI-enhanced software capabilities across iOS and AHS segments. Moving to the second pillar, disciplined capital allocation is an integral component of our 45-star strategy. Consistent with our priorities, in the second half of 2025, we'll repurchase about 26 million shares, or roughly 8% of our diluted shares outstanding. We also continue to refine our M&A funnel and processes to reflect our go-forward strategy, prioritizing our creative bolt-on deals that meet our rigorous strategic and financial criteria. In the second half of the year, we closed two small transactions that met this high bar, enabling us to actively strengthen our M&A muscle. As we look to 2026 and beyond, our capital deployment priorities for New 40 remain crystal clear. Invest in organic growth, pursue bolt-on M&A where the risk-adjusted returns exceed other uses of capital, return capital through share repurchases, and maintain a modest growing dividend, all with a focus on best relative returns and maximizing medium to long-term shareholder value. Moving to our final pillar, building and maintaining investor trust. We were pleased to deliver performance ahead of expectations in Q3 and Q4, including adjusted EPS that surpassed the high end of our guidance range. We recognize there is more work to do here, and we remain confident and focused on delivering the 2026-2027 financial framework and further acceleration that we committed to at our investor day in June 2025. With that, I'll turn it over to Mark to walk through our financial results for the fourth quarter.