Fortive Corporation

My name is Darrell, and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to Fordham Corporation's second quarter 2026 earnings results 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, please 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 Olumide Soroye, 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 investor section of our website at fordiv.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 files, 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 Olumide.

Thank you, Christina, and thank you all for joining our call today. Let me begin on slide three. You two marked another quarter of strong results and execution of the 40th Accelerated Strategy by our 40th team. Four key messages from the quarter. First, our teams delivered strong financial performance across both segments. On a consolidated basis, we delivered core revenue growth of 6.7%, adjusted EBITDA growth of 12%, and adjusted EPS growth of 28%. Importantly, our results reflect continued progress on our objective of driving faster, profitable organic growth powered by our 40 business system amplified. Second, we remain disciplined in our capital allocation approach. with relentless focus on optimizing shareholder returns over the medium to long term. This quarter, we executed a small bolt-on acquisition and deployed another roughly $200 million to share repurchases, bringing total share repurchases since our launch of New Forty a year ago to approximately 38 million shares or 11% of shares outstanding. We continue to execute our 40th accelerated strategy, and we are pleased to see evidence that our investments in innovation, commercial and recurring customer value are contributing to accelerating growth, margin expansion, and earnings performance, reinforcing our confidence in our medium-term financial framework and value creation opportunity. Finally, we are raising our full year 2026 adjusted EPS guidance to $2.95 to $3.05, reflecting our solid first half performance and our confidence in the trajectory of the business. Moving to slide four, let me highlight some of the progress we are making in executing the three pillars of our 40th Accelerated Strategy. Starting with the first pillar, delivering faster, profitable organic growth. Overall, we remain encouraged by the progress we're seeing across innovation, commercial and recurring customer value, all of which are building the foundation for durable, faster organic growth. This quarter, our accelerating innovation velocity again translated into faster growth. At Fluke, our innovation funnel is steadily expanding with new product introductions tightly aligned to strategic growth areas such as data centers, Defense, and early in career technicians. Demand for 30 fiber masks continues to exceed expectations, helping establish Fluke's position in the rapidly growing data center commissioning and maintenance market and driving pull through of the broader Fluke portfolio into this high growth area. In facilities and asset lifecycle solutions, we are expanding our AI-enabled predictive maintenance portfolio, our service channel, and our current, including tools that help field service technicians diagnose and fix issues more accurately in the field. At Guardian, our Flash AI solution launched in Q1 is now in production across many of our strategic accounts and running well above plan. cutting construction costs estimating time from days to minutes and creating measurable value for customers and for guardian. In healthcare, ASP received FDA clearance for a 50-pound expanded steroid load capacity for the strength in our position in robotic assisted surgery applications, one of the faster growing areas within the operating room environment. On the commercial side, we maintain our focus on faster growing end markets and regions where we've made deliberate targeted investments to capture growth. At Fluke, investments in data center expertise drove incremental demand for our networks, power quality, and battery testing product lines. Additionally, we continue to see strong momentum in India, where our localized service and support investments are strengthening customer relationships and helping drive growth. Service Channel is investing in commercial and marketing resources across Europe to capture the meaningful international opportunity in the business. At Guardian, Our investment in growing contractual engagement is reinforcing the competitive differentiation of our two-sided procurement marketplace. In healthcare, we continue to deepen our engagement with enterprise health systems and ambulatory surgical center networks through coordinated commercial efforts across ASP, Census, and our other advanced healthcare solutions operating brands. On our recurring customer value initiatives, we made further progress on deepening customer lifecycle engagement and improving revenue durability. In Q2, recurring revenue growth remained strong across both segments. At Fluke, recurring revenue growth was driven by strong performance in services and software offerings. and early customer feedback on AI-enabled capabilities recently introduced within Fluke's eMain platform has been very encouraging. ASP consumables and services had another quarter of strong growth with solid growth contributions from every major region. Moving to the second pillar, discipline capital allocation is an integral component of our four-deep accelerator strategy. Consistent with our priorities, we deployed another roughly $200 million to share repurchases in Q2. Since the spin-off, we have deployed nearly $2 billion to share repurchases, representing 38 million shares, or approximately 11% of diluted shares outstanding. Our revamped Bolton M&A engine and team is now in place, and we are continually evaluating opportunities for high-quality are creative bolt-on acquisitions that meet our rigorous strategic and financial criteria. This quarter, we completed the acquisition of a majority stake in UVsmart, an innovative company whose complimentary UVC high-level disinfection technology expands ASP's portfolio and enables more efficient disinfection of specialized instruments. Looking forward, our capital allocation priorities remain clear. Invest in organic growth, pursue Bolton M&A where 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 are pleased to deliver strong performance ahead of expectations for a fourth consecutive quarter as New 40. We remain laser focused on executing against our 2026 financial and strategic plan and continue to have strong confidence in our medium term financial framework that we shared at our last investor day. With that, I'll turn it over to Mark to walk through our financial results for the second quarter in more detail.