Fortive Posts Strong Q4, Eyes Growth in 2026 as 'New Fortive' Strategy Takes Hold

Fortive's Strategic Pivot Delivers Growth Momentum Into 2026

EVERETT, Wash. – Fortive Corporation (NYSE: FTV) reported fourth-quarter earnings that signaled a strengthening trajectory for the industrial technology conglomerate. In its first full reporting period since a major operating model overhaul last July, the self-styled "New Fortive" demonstrated accelerating core growth, significant margin expansion, and a aggressive capital return program, setting a confident tone for the year ahead.

For the quarter, Fortive posted revenue of $1.1 billion, a 4.5% increase year-over-year. More importantly, the company highlighted a return to volume growth and solid performance across all geographic regions. Adjusted earnings per share jumped 13% to $0.90, marking the second consecutive quarter of double-digit EPS growth.

"Our second-half performance reflects the early benefits of our refined strategy and operating model," said President and CEO Olumide Soroye during the earnings call. "We are seeing encouraging signs across our portfolio, particularly in our Intelligent Operating Solutions segment."

Segment Performance: A Tale of Two Divisions

The company's performance was driven by its Intelligent Operating Solutions (IOS) unit, which saw revenue grow over 5%. Management repeatedly pointed to the flagship Fluke business as a key contributor, noting strong point-of-sale trends in North America and improving conditions in Europe and Latin America. The gas detection product line also showed strength, benefiting from market share gains and demand for its hardware-as-a-service offerings.

The Advanced Healthcare Solutions (AHS) segment faced headwinds, with revenue up a modest 3%. Executives acknowledged ongoing pressure from U.S. hospital capital expenditure deferrals due to reimbursement changes. However, they expressed optimism about a recovering demand trend and a strong pipeline for the company's sterilization products.

Capital Allocation Takes Center Stage

Perhaps the most striking figure from the report was the scale of Fortive's share repurchase program. The company bought back $265 million of its own stock in Q4 alone, bringing the total for the second half of 2025 to a substantial $1.3 billion. This represents roughly 8% of its diluted shares outstanding.

"Our disciplined capital allocation framework is a core pillar of our strategy," stated CFO Mark Okerstrom. "The strength of our balance sheet and cash flow generation gives us ample capacity to invest for organic growth while returning significant capital to shareholders." The company ended the year with a gross debt to adjusted EBITDA ratio of 2.6x, which management characterized as providing flexibility for 2026 priorities.

Looking Ahead: Guidance and Strategic Pillars

Fortive initiated 2026 adjusted EPS guidance of $2.90 to $3.00, implying approximately 9% growth at the midpoint. The outlook assumes a continuation of fourth-quarter market dynamics and incorporates current tariff structures, which are not expected to materially impact the bottom line.

Soroye framed the company's forward strategy around three pillars: accelerating profitable organic growth, disciplined capital allocation, and building investor trust. He highlighted innovation momentum, pointing to new product releases from Fluke and ServiceChannel, and emphasized the growing importance of recurring revenue—which again outpaced total revenue growth—driven by software maintenance and AI-enhanced capabilities.

"Customers are actively seeking agentic and generative AI enhancements in our mission-critical software," Soroye noted, addressing analyst questions on the topic. "We are seeing this translate into strong renewal rates and growing customer usage."

While encouraged by the progress, Soroye concluded with a note of determined focus: "We have significant unfinished business and untapped potential as we enter 2026. Execution remains our paramount objective."

Market Voices: Analyst & Investor Reactions

Eleanor Vance, Portfolio Manager at Ridgecrest Capital: "This was a clean quarter that should bolster confidence. The buyback magnitude is a clear signal of self-assuredness in their cash flow stability. The IOS segment is firing on all cylinders, and if the healthcare headwinds abate, there's meaningful upside to the 2026 guide."

David Chen, Senior Analyst at TechStreet Research: "The 'New Fortive' narrative is gaining tangible evidence. The operational leverage is showing up in the EBITDA margin expansion. My focus is on the recurring revenue acceleration and how their embedded AI features translate into pricing power and reduced churn over the next few quarters."

Marcus Thorne, Independent Investor & Frequent Commentator: "Let's not get carried away. A 4.5% top-line growth in this environment is adequate, not exceptional. They're buying back stock aggressively, but what about organic investment? The healthcare segment is still a drag, and the 'targeted investments' excuse for margin compression is getting old. Show me the true innovation, not just financial engineering."

Priya Sharma, Managing Director at Horizon Strategic Advisors: "The strategic clarity is the real story here. They've simplified the portfolio, focused the model, and are now executing with discipline. The capital allocation is textbook—funding growth initiatives while directly rewarding shareholders. The guidance appears conservative, which is a prudent approach given the macroeconomic crosscurrents."

Fortive is a diversified industrial technology company spun off from Danaher in 2016. Its operations focus on professional instrumentation, sensing, and software-enabled workflow solutions for industrial and commercial customers.