Fortive FTV Form 10-Q filing Q2 FY2026

FORM 10-Q

PART I - FINANCIAL INFORMATION Page

Item 1. Financial Statements

Consolidated Condensed Balance Sheets 4

Consolidated Condensed Statements of Earnings 5

Consolidated Condensed Statements of Comprehensive Income 6

Consolidated Condensed Statements of Changes in Equity 7

Consolidated Condensed Statements of Cash Flows 8

Notes to Consolidated Condensed Financial Statements 9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 24

Item 3. Quantitative and Qualitative Disclosures About Market Risk 34

Item 4. Controls and Procedures 34

PART II - OTHER INFORMATION

Item 1A. Risk Factors 35

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 35

Item 5. Other Information 35

Item 6. Exhibits 36

Signatures 37

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FORTIVE CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

($ and shares in millions, except per share amounts)

See the accompanying Notes to Consolidated Condensed Financial Statements.

FORTIVE CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

($ and shares in millions, except per share amounts)

(unaudited)

See the accompanying Notes to Consolidated Condensed Financial Statements.

FORTIVE CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

($ in millions)

(unaudited)

See the accompanying Notes to Consolidated Condensed Financial Statements.

FORTIVE CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY

($ and shares in millions)

(unaudited)

See the accompanying Notes to Consolidated Condensed Financial Statements.

FORTIVE CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

($ in millions)

(unaudited)

See the accompanying Notes to Consolidated Condensed Financial Statements.

FORTIVE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

NOTE 1. BUSINESS OVERVIEW

Fortive Corporation (“Fortive,” “the Company,” “we,” “us,” or “our”) innovates essential technologies to keep our world safe and productive. Our strategic segments - Intelligent Operating Solutions (“IOS”) and Advanced Healthcare Solutions (“AHS”) - include iconic inventor brands with leading positions in their markets. Our businesses design, develop, manufacture, and market products, software, and services, building upon leading brand names, innovative technologies, and strong market positions. Our research and development, manufacturing, sales, distribution, service, and administrative facilities are located in approximately 50 countries around the world.

We prepared the unaudited consolidated condensed financial statements included herein in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) applicable for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations; however, we believe the disclosures are adequate to make the information presented not misleading. Reclassifications of certain prior year amounts in the Consolidated Statements of Cash Flows have been made to conform to current year presentation. The unaudited consolidated condensed financial statements included herein should be read in conjunction with the audited annual consolidated financial statements as of and for the year ended December 31, 2025 and the footnotes (“Notes”) thereto included within our 2025 Annual Report on Form 10-K. Certain of our operations have been presented as discontinued operations. We present businesses whose disposal represents a strategic shift that has, or will have, a major effect on our operations and financial results as discontinued operations when the components meet the criteria for held for sale, are sold, or spun-off.

In our opinion, the accompanying financial statements contain all adjustments, which consist of only normal, recurring accruals necessary to fairly present our financial position, results of operations, comprehensive income, stockholders’ equity, and cash flows for the periods presented. The results of operations for the three and six months ended July 3, 2026, are not necessarily indicative of the results for the full year.

Segment Presentation

We operate and report our results in two segments, Intelligent Operating Solutions and Advanced Healthcare Solutions, each of which is further described below.

The IOS segment provides advanced instrumentation, software and services to tens of thousands of customers enabling their mission-critical workflows. These offerings include professional instruments used in applications including maintenance, repair, measurement and condition monitoring, facility and asset lifecycle software applications, connected worker safety and compliance solutions across a range of vertical end markets, including manufacturing, process industries, healthcare, utilities and power, communications and electronics, among others. Typical users of these safety, productivity and sustainability solutions include electrical engineers, electricians, electronic technicians, EHS professionals, network technicians, facility managers, first-responders, and maintenance professionals.

The AHS segment supplies critical workflow solutions enabling healthcare providers to deliver exceptional patient care more efficiently. Our offerings include instrument sterilization solutions, instrument tracking, biomedical test tools, radiation detection and safety monitoring, and end-to-end clinical productivity software and solutions. Our healthcare offerings help ensure critical safety standards are met, instruments and operating rooms are working at peak performance, and complex procedures are followed accurately in these mission-critical healthcare environments.

Precision Technologies Separation

On June 28, 2025 (the “Distribution Date”), the Company completed the separation (the “Separation” or the “PT Separation”) of its former Precision Technologies segment by distributing to Fortive shareholders on a pro rata basis all of the issued and outstanding common stock of Ralliant Corporation (“Ralliant”), the entity incorporated to hold the PT businesses. The accounting requirements for reporting Ralliant as a discontinued operation were met when the Separation was completed. Accordingly, the accompanying consolidated condensed financial statements for all periods presented reflect this business as a discontinued operation. Unless otherwise indicated, all amounts in this quarterly report refer to continuing operations. Refer to Note 2 for additional information.

Acquisitions

During the three months ended July 3, 2026, we made a bolt-on acquisition in our AHS segment that is intended to accelerate our strategy and strengthen our product portfolio. We paid aggregate cash consideration of €51 million (approximately $58 million), net of acquired cash, to acquire a majority ownership interest. In early 2029, we will acquire the remaining ownership interest for contingent consideration of up to €20 million. We recorded approximately $52 million of goodwill, which is not tax deductible, and $20 million of intangible assets consisting of customer relationships, technology, and trade names. All other acquired assets and assumed liabilities are immaterial. The revenues and operating results in the three months ended July 3, 2026 were also immaterial.

The purchase price allocation is preliminary and is based on estimates and assumptions used in determining the fair value of the net assets acquired. Accordingly, the allocation may be adjusted as additional information becomes available regarding the fair value of assets acquired and liabilities assumed. Adjustments are recorded as soon as practicable within the measurement period, but in no event later than one year from the acquisition date.

Accumulated Other Comprehensive Loss

We designate a portion of the 3.7% Euro-denominated senior unsecured notes due 2029 as a net investment hedge on our investment in applicable foreign operations. As such, the after-tax foreign currency transaction gains and losses on the debt were deferred in the foreign currency translation component of Accumulated Other Comprehensive Income (Loss) (“AOCI”) as an offset to the foreign currency translation adjustments on our investments in foreign subsidiaries. Any amounts deferred in AOCI will remain until the hedged investment is sold or substantially liquidated.

We recognized after-tax foreign currency transaction gains of $3.8 million and $15.9 million during the three and six-month periods ended July 3, 2026, respectively, and losses of $103.3 million and $160.3 million during the three and six-month periods ended June 27, 2025, respectively, on the debt that was deferred in the foreign currency translation component of AOCI as an offset to the foreign currency translation adjustments on our investments in foreign subsidiaries. We recorded no ineffectiveness from our net investment hedges during the three and six-month periods ended July 3, 2026 and June 27, 2025. During the three and six-month periods ended July 3, 2026 and June 27, 2025, the foreign currency transaction impacts associated with Euro-denominated notes not designated as a net investment hedge were immaterial.

We recognized gains on our treasury lock contract designated as a cash flow hedge of $1.1 million and $4.6 million in the three and six-month periods ended July 3, 2026, respectively, which are recorded within the hedge adjustments component of AOCI. The treasury lock contract was settled in the three months ended July 3, 2026. The gain will be amortized to interest expense in the Consolidated Condensed Statements of Earnings ratably over 10 years, aligning to the tenor of the 5.25% senior unsecured notes due 2036.

The changes in AOCI by component are summarized below ($ in millions):

Restructuring

In the fourth quarter of 2024, we initiated a discrete restructuring plan that is expected to be completed by the end of 2026. The nature of the plan is related to the Separation and consisted primarily of targeted workforce reductions to realign cost structures. During the three months ended July 3, 2026 and June 27, 2025, we incurred charges of $2.4 million and $7.9 million, respectively. During the six months ended July 3, 2026 and June 27, 2025, we incurred charges of $8.7 million and $11.4 million, respectively. These charges are recorded within Cost of sales and Selling, general, and administrative expenses in the Consolidated Statements of Earnings. The accrued restructuring costs as of July 3, 2026 and December 31, 2025 were approximately $9 million and $13 million, respectively, and are recorded within Accrued expenses and other current liabilities in the Consolidated Condensed Balance Sheets.

Recently Issued Accounting Standards

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) — Disaggregation of Income Statement Expenses, which amends the disclosure requirements related to certain costs and expenses on an interim and annual basis. This standard is effective for fiscal year ending December 31, 2027, and interim periods within fiscal year ending December 31, 2028, and can be applied either on a prospective or retrospective basis. The adoption of the standard will not impact our consolidated financial statements. Upon adoption, we will update the applicable interim and annual disclosures to align with the new standard.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) — Targeted Improvements to the Accounting for Internal-Use Software, which clarifies and modernizes the software cost capitalization guidance by removing the previous “development stage” model and introducing a more judgment-based approach. This standard is effective for fiscal year ending December 31, 2028, and interim periods within 2028, with early adoption permitted, and could be applied using a prospective, retrospective or modified transition approach. We are currently in the process of evaluating the effects of this standard on our consolidated financial statements.

In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818), which establishes accounting and disclosure requirements for environmental credits and related environmental credit obligations. This standard is effective for fiscal year ending December 31, 2028 and interim periods within 2028, with early adoption permitted, and must be applied on a retrospective basis. We anticipate that the impact on our consolidated financial statements will be immaterial.

Recently Adopted Accounting Standard

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) — Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient to measure credit losses on current accounts receivable and current contracts assets. The practical expedient allows companies to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset when measuring credit losses. On January 1, 2026, we adopted this standard on a prospective basis; the impact on our consolidated financial statements was immaterial.

NOTE 2. DISCONTINUED OPERATIONS

As part of the Separation, Ralliant paid a $1.15 billion cash dividend to Fortive prior to the Distribution Date (the “Ralliant Dividend”), which is recorded within the Financing Activities section of the Consolidated Condensed Statements of Cash Flows.

In connection with the Separation, the Company incurred $40 million and $63 million in Separation-related costs during the three and six months ended June 27, 2025, respectively, which were recorded within net earnings (loss) from discontinued operations in the Consolidated Condensed Statements of Earnings. These costs were primarily related to professional fees associated with finance, tax, legal, banking and information technology services as well as redundant general and administrative costs.

Fortive and Ralliant entered into various agreements to effect the Separation and provide a framework for their relationship after the Separation, including a separation and distribution agreement, a transition services agreement, an employee matters agreement, a tax matters agreement, an intellectual property matters agreement, a Fortive Business System (“FBS”) license agreement and a Fort solutions license agreement. These agreements provide for the allocation between Fortive and Ralliant of assets, employees, liabilities and obligations (including investments, property, employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after the Separation and govern certain relationships between Fortive and Ralliant after the Separation. The amounts paid and received by Fortive for transition services provided under the above agreements as well as sales and purchases to and from Ralliant were not material to the Company’s results of operations during the three and six months ended July 3, 2026.

The assets from discontinued operations were $4.9 million as of July 3, 2026, which consisted primarily of receivables from Ralliant related to the tax matters agreement, and $20.8 million as of December 31, 2025, which consisted of receivables from Ralliant related to the tax matters agreement and pass-through arrangements. Net cash payments received from Ralliant as reimbursement for pass-through costs paid on Ralliant’s behalf were immaterial in the three months ended July 3, 2026 and $17.4 million in the six months ended July 3, 2026. This activity is recorded within operating cash provided by discontinued operations in the Consolidated Condensed Statements of Cash Flows.

The key components of income from discontinued operations were as follows ($ in millions):

NOTE 3. FAIR VALUE MEASUREMENTS

Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value for assets and liabilities required to be carried at fair value, and provide for certain disclosures related to the valuation methods used within the valuation hierarchy as established within the accounting standards. This hierarchy prioritizes the inputs into three broad levels as follows:

• Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets.
• Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation.
• Level 3 inputs are unobservable inputs based on our assumptions. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Below is a summary of financial assets and liabilities that are measured at fair value on a recurring basis ($ in millions):

Certain management employees participate in our nonqualified deferred compensation programs that permit such employees to defer a portion of their compensation, on a pretax basis, until after their termination of employment. All amounts deferred under such plans are unfunded, unsecured obligations and are recorded as a component of our compensation and other post-retirement benefits accruals within Other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets. Participants may choose among alternative earning rates for the amounts they defer, which are primarily based on investment options within our defined contribution plans for the benefit of U.S. employees (“401(k) Programs”) (except that the earnings rates for amounts contributed unilaterally by the Company are entirely based on changes in the value of Fortive common stock). Changes in the deferred compensation liability under these programs are recognized based on changes in the fair value of the participants’ accounts and are recorded within Selling, general and administrative expenses in the Consolidated Condensed Statements of Earnings.

Non-recurring Fair Value Measurements

Certain non-financial assets and financial assets that are not required to be measured at fair value on a recurring basis are reported at their carrying value. However, these assets are required to be assessed for impairment whenever events or circumstances indicate that their carrying value may not be fully recoverable, and at least annually for goodwill and indefinite-lived intangible assets. We evaluated events or circumstances that may indicate the carrying value of our non-financial assets may not be fully recoverable during the three and six months ended July 3, 2026, and recorded no impairments.

Fair Value of Financial Instruments

The carrying amount and fair value of financial instruments are as follows ($ in millions):

As of July 3, 2026 and December 31, 2025, the current portion of long-term debt and long-term debt, net of current maturities were categorized as Level 1.

The fair value of the long-term borrowings were based on quoted market prices. The difference between the fair value and the carrying amounts of long-term borrowings may be attributable to changes in market interest rates and/or our credit ratings subsequent to the borrowing. The fair value of cash and equivalents, trade accounts receivable, net, trade accounts payable, and commercial paper approximates their carrying amount due to the short-term maturities of these instruments.

NOTE 4. FINANCING

The components of our debt were as follows ($ in millions):

Refer to Note 8 of our 2025 Annual Report on Form 10-K for further details of our debt financing.

Commercial Paper Programs

We generally satisfy any short-term liquidity needs that are not met through operating cash flows and available cash primarily through issuances of commercial paper under our U.S. dollar and Euro-denominated commercial paper programs (“Commercial Paper Programs”). Under these programs, we may issue unsecured promissory notes with maturities not exceeding 397 days and 183 days, respectively. Proceeds from borrowings under the Commercial Paper Programs are typically available for general corporate purposes, including acquisitions.

Interest expense on commercial paper is paid at maturity and is generally based on our credit ratings at the time of issuance and prevailing short-term interest rates.

Credit support for the Commercial Paper Programs is provided by a five-year $2.0 billion senior unsecured revolving credit facility that expires on March 17, 2031 (the “Revolving Credit Facility”) which, to the extent not otherwise providing credit support for our Commercial Paper Programs, can also be used for working capital and other general corporate purposes. As of July 3, 2026, no borrowings were outstanding under the Revolving Credit Facility. Refer to the section below for further discussion on the Revolving Credit Facility.

The details of our outstanding Commercial Paper Programs as of July 3, 2026 were as follows ($ in millions):

We classified our borrowings outstanding under the Commercial Paper Programs as of July 3, 2026 as Long-term debt in the accompanying Consolidated Condensed Balance Sheets as we had the intent and ability, as supported by availability under the Revolving Credit Facility, to refinance these borrowings for at least one year from the balance sheet date.

Senior Unsecured Notes Due 2031 and 2036

On May 14, 2026, we completed the registered offering of the following senior unsecured notes:

• $600 million in aggregate principal amount of our 4.75% senior unsecured notes due 2031 (the “2031 Notes”) issued at 99.771% of their principal amount and bearing interest at 4.75% per annum. The 2031 Notes mature on May 15, 2031 with interest payable in arrears on May 15 and November 15 of each year, beginning in November 2026.
• $500 million in aggregate principal amount of our 5.25% senior unsecured notes due 2036 (the “2036 Notes”) issued at 99.685% of their principal amount and bearing interest at 5.25% per annum. The 2036 Notes mature on May 15, 2036 with interest payable in arrears on May 15 and November 15 of each year, beginning in November 2026.

The net proceeds from the offering, after underwriting discounts and commissions and offering expenses, were approximately $1.1 billion. We used the net proceeds to repay the $900 million of outstanding principal of the 3.15% senior unsecured notes due 2026, and the accrued interest thereon, and for other general corporate purposes.

We may redeem the 2031 Notes and the 2036 Notes at our option, in whole or in part, at any time and from time to time. Prior to April 15, 2031 for the 2031 Notes and February 15, 2036 for the 2036 Notes (each, respectively, the “Par Call Date”), we may redeem the 2031 Notes and the 2036 Notes, as applicable, at the corresponding make-whole redemption price as specified in the indentures. On or after the applicable Par Call Date, the redemption price will equal 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest up to, but not including, the redemption date. The 2031 Notes and 2036 Notes contain customary covenants, none of which are considered restrictive to our operations.

If a change of control triggering event occurs, we will, in certain circumstances, be required to make an offer to repurchase the 2031 Notes and 2036 Notes from each holder at a purchase price equal to 101% of the principal amount thereof being repurchased, plus accrued and unpaid interest to, but not including, the repurchase date. A change of control triggering event is defined as the occurrence of both a change of control and a rating event, each as defined in the indentures. Except in connection with a change of control triggering event, the 2031 Notes and 2036 Notes do not have any credit rating downgrade triggers that would accelerate the maturity of the notes.

Revolving Credit Facility

On March 17, 2026, we entered into a third amended and restated credit agreement (the “Amended and Restated Credit Agreement”) which extended the availability period of the Revolving Credit Facility to March 17, 2031, with two one-year extension options at our request and with the consent of the lenders. The Amended and Restated Credit Agreement also contains an option permitting us to request an aggregate additional $1.0 billion as a revolving credit facility (or increase thereof), term loan facility, or combination thereof.

We are obligated to pay an annual facility fee for the Revolving Credit Facility of between 6 and 15 basis points varying according to our long-term debt credit rating. Borrowings under the Revolving Credit Facility in U.S. Dollars bear interest at a rate equal, at our option, to either (1) Term Secured Overnight Financing Rate (“Term SOFR”), plus a margin of between 69 and 110 basis points, depending on our long-term debt credit rating or (2) Base Rate (which is the highest of (a) the Federal funds rate plus 50 basis points, (b) the prime rate, (c) Term SOFR plus 100 basis points and (d) 1.0%), plus a margin between zero and 10 basis points depending on our long-term debt credit rating.

The Amended and Restated Credit Agreement requires us to maintain a defined consolidated net leverage ratio of no greater than 3.75 to 1.00. The maximum consolidated net leverage ratio will be increased to 4.25 to 1.00 for the four consecutive full fiscal quarters immediately following the consummation of any acquisition by us in which the purchase price exceeds $250 million.

As of July 3, 2026, we were in compliance with all applicable debt covenants.

NOTE 5. SALES

We derive revenue primarily from the sales of products, including software, and services. Revenue is recognized when control of promised products or services is transferred to customers in an amount that reflects the consideration we expect to be entitled to in exchange for those products, software, or services.

Product sales include revenue from the sale of products and equipment, which includes our software and software as a service (“SaaS”) product offerings and equipment rentals. Service sales include revenues from extended warranties, post-contract customer support (“PCS”), maintenance contracts or services, contract labor to perform ongoing service at a customer location, services related to previously sold products, and software implementation services.

Contract Assets — In certain circumstances, we record contract assets which include unbilled amounts typically resulting from sales under contracts when revenue recognized exceeds the amount billed to the customer, and right to payment is not based only on the passage of time. Contract assets were $145 million as of July 3, 2026 and $151 million as of December 31, 2025. Contract assets are recorded within Prepaid expenses and other current assets and Other assets in our Consolidated Condensed Balance Sheets.

Contract Costs — We incur and capitalize incremental costs to obtain certain contracts, typically sales-related commissions where the amortization period is greater than one year and costs associated with assets used by our customers in certain service arrangements. As of July 3, 2026 and December 31, 2025, we had $80 million and $75 million, respectively, in net revenue-related contract cost assets primarily related to certain software contracts. Revenue-related contract costs are recorded within Other assets in our Consolidated Condensed Balance Sheets. These assets are amortized over the period of benefit, which is typically between three and five years. For incremental costs to obtain contracts with a duration of one year or less, we apply the practical expedient to expense such costs as incurred.

Contract Liabilities — Our contract liabilities consist of deferred revenue generally related to subscription-based software contracts, PCS and extended warranty sales, where we generally receive up-front payment and recognize revenue over the service or support term. We classify deferred revenue as current or noncurrent based on the timing of when we expect to recognize revenue. The current portion of deferred revenue is recorded within Accrued expenses and other current liabilities and the noncurrent portion of deferred revenue is recorded within Other long-term liabilities in our Consolidated Condensed Balance Sheets.

Our contract liabilities consisted of the following ($ in millions):

During the three and six months ended July 3, 2026, we recognized revenue of $116 million and $287 million, respectively, related to our contract liabilities at December 31, 2025. The change in our contract liabilities from December 31, 2025 to July 3, 2026 was primarily due to the timing of billings and recognition of revenue for subscription-based software contracts, PCS, and extended warranty services.

Remaining Performance Obligations — Our remaining performance obligations represent the transaction price of firm, non-cancelable orders and the average contract value for software contracts, for which work has not been performed. We have excluded performance obligations with an original expected duration of one year or less from the amounts below.

The aggregate remaining performance obligations attributable to each of our segments are as follows ($ in millions):

The majority of remaining performance obligations are related to subscription-based software contracts, and service and support contracts, which we expect to fulfill approximately 75 percent within the next two years, approximately 90 percent within the next three years, and substantially all within four years.

Disaggregation of Revenue

We disaggregate revenue from contracts with customers by sales of products and software and services, geographic location, and end market for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

Disaggregation of revenue is presented as follows ($ in millions):

NOTE 6. INCOME TAXES

Our effective tax rate for the three and six months ended July 3, 2026 was 12.4% and 14.4%, respectively, as compared to 20.1% and 18.0%, for the three and six months ended June 27, 2025, respectively. The decrease in the effective tax rate for the three and six months ended July 3, 2026 as compared to the three and six months ended June 27, 2025 was primarily related to the mix of earnings between jurisdictions and changes in valuation allowances.

Our effective tax rate for the three and six months ended July 3, 2026, differs from the U.S. federal statutory rate of 21% due primarily to the impact of credits and deductions provided by law, including those associated with state income taxes, and changes in our uncertain tax position reserves.

NOTE 7. STOCK-BASED COMPENSATION

The 2016 Stock Incentive Plan (the “Stock Plan”), provides for the grant of stock appreciation rights, restricted stock units, and performance stock units (collectively, “Stock Awards”), stock options, or any other stock-based award. As of July 3, 2026, approximately 11 million shares of our common stock were available for subsequent issuance under the Stock Plan. For a full description of our Stock Plan, refer to Note 13 of our 2025 Annual Report on Form 10-K.

Stock-based compensation has been recognized as a component of Selling, general and administrative expenses in the Consolidated Condensed Statements of Earnings based on the portion of the awards that are ultimately expected to vest.

The following summarizes the components of our stock-based compensation expense under the Stock Plan ($ in millions):

The following summarizes the unrecognized compensation cost for the Stock Plan awards and stock options as of July 3, 2026. This compensation cost is expected to be recognized over a weighted average period of approximately two years, representing the remaining service period related to the awards. Future compensation amounts will be adjusted for any changes in estimated forfeitures ($ in millions):

NOTE 8. LEASES

Operating lease costs for each period are presented as follows ($ in millions):

Supplemental information related to operating leases for each period is presented as follows ($ in millions):

For additional information about our leases, refer to Note 7 in our 2025 Annual Report on Form 10-K.

NOTE 9. NET EARNINGS PER SHARE

Basic net earnings per share (“EPS”) from continuing operations is calculated by dividing net earnings from continuing operations by the weighted average number of shares of common stock outstanding for the applicable period. Diluted EPS from continuing operations is similarly calculated, except that the calculation includes the dilutive effect of the assumed issuance of shares under stock-based compensation plans under the treasury stock method, except where the inclusion of such shares would have an anti-dilutive impact.

For the three months ended July 3, 2026 and June 27, 2025, the anti-dilutive options to purchase shares excluded from the diluted EPS calculation were 1.0 million and 2.2 million, respectively. For the six months ended July 3, 2026 and June 27, 2025, the anti-dilutive options to purchase shares excluded from the diluted EPS calculation were 1.0 million and 1.9 million, respectively.

Information related to the calculation of net earnings per share of common stock is summarized as follows ($ and shares in millions, except per share amounts):

Share Repurchase Programs

In February 2022, our Board of Directors (the “Board”) adopted a share repurchase program (the “General Share Repurchase Program”), under which our Board has made various authorizations for the repurchase of shares of our common stock. On May 4, 2026, the Board made a new authorization of 14.4 million shares, for a total cumulative authorization of 73.2 million shares as of July 3, 2026. In 2025, in connection with the Separation, our Board adopted a separate and incremental special purpose share repurchase program (the “Special Share Repurchase Program”) under which we may repurchase up to $550 million of our common stock exclusively from the proceeds we received from Ralliant in connection with the Separation.

As of July 3, 2026, there were 17.7 million shares and $66.7 million remaining authorized under the General Share Repurchase Program and Special Share Repurchase Program, respectively. There is no expiration date for these repurchase programs, and the timing and amount of repurchases under the programs are determined by our management based on market conditions, tax regulation and other factors. The repurchase programs may be suspended or discontinued at any time by the Board.

During the three and six months ended July 3, 2026, the Company purchased 3.4 million and 12.3 million shares of its common stock at an average share price of $59.54 and $57.13, respectively. During the three and six months ended June 27, 2025, the Company purchased 1.9 million and 4.4 million shares of its common stock at an average share price of $71.15 and $76.76, respectively. Common stock repurchases, in excess of issuances, are subject to a 1% excise tax in the United States, which is recorded as part of the cost basis of the shares acquired and shown within Common stock repurchases in the Consolidated Condensed Statements of Changes in Equity. The payment of the excise tax is recorded within All other financing activities in the Financing Activities section of the Consolidated Condensed Statements of Cash Flows.

NOTE 10. SEGMENT INFORMATION

We report our results in two separate business segments consisting of Intelligent Operating Solutions and Advanced Healthcare Solutions. We determine our business segments based on the identification of segment managers and similarities in products, end markets, economic characteristics, technologies, and services, as well as the financial data utilized by the Company's chief executive officer. The Company's chief operating decision maker ("CODM") is the chief executive officer.

The CODM uses gross profit and operating profit at the segment level to assess performance and allocate resources, including those associated with merger and acquisition targets. The CODM also compares the actual results to expectations in assessing the performance of the segments. Operating expenses generally include selling, general and administrative expenses, and research and development expenses. Depreciation expense is allocated between Cost of sales and Selling, general, and administrative expenses. Amortization expense is recorded within Selling, general, and administrative expenses. The identifiable assets by segment are those used in each segment’s operations. Inter-segment amounts are not significant and are eliminated in the combined totals. Unallocated costs and other costs are not considered part of our evaluation of reportable segment operating performance.

Segment results are presented as follows ($ in millions):

Segment Assets:

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Fortive Corporation (“Fortive,” the “Company,” “we,” “us,” or “our”) innovates essential technologies to keep our world safe and productive. Our strategic segments - Intelligent Operating Solutions (“IOS”) and Advanced Healthcare Solutions (“AHS”) - include iconic inventor brands with leading positions in their markets. Our businesses design, develop, manufacture, and market products, software, and services, building upon leading brand names, innovative technologies, and strong market positions. Our research and development, manufacturing, sales, distribution, service, and administrative facilities are located in approximately 50 countries around the world.

Precision Technologies Separation

On June 28, 2025 (the “Distribution Date”), the Company completed the separation (the “Separation” or the “PT Separation”) of its former Precision Technologies segment by distributing to Fortive shareholders on a pro rata basis all of the issued and outstanding common stock of Ralliant Corporation (“Ralliant”), the entity incorporated to hold the PT businesses. The accounting requirements for reporting Ralliant as a discontinued operation were met when the Separation was completed. Accordingly, the accompanying consolidated condensed financial statements for all periods presented reflect this business as a discontinued operation. Unless otherwise indicated, all amounts in this quarterly report refer to continuing operations. Refer to Note 2 for additional information.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of our financial statements with a narrative from the perspective of management. The following discussion should be read in conjunction with the MD&A and consolidated financial statements included in our 2025 Annual Report on Form 10-K. Our MD&A is divided into five sections:

• Results of Operations
• Liquidity and Capital Resources
• Critical Accounting Estimates

conference calls, materials delivered to shareholders and other communications, are “forward-looking statements” within the meaning of the United States federal securities laws. All statements other than historical factual information are forward-looking statements, including without limitation statements regarding: projections of revenue, expenses, profit, profit margins, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other financial measures; impact of government actions, including tariffs and tariff refunds, other trade policies, government spending and tax laws; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, capital allocation, financing, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions, divestitures, strategic opportunities, financing, stock repurchases, and dividends; growth, declines and other trends in markets we sell into, including the expected impact of trade and tariff policies; the anticipated impacts and benefits of the completed separation of Ralliant; new or modified laws, regulations and accounting pronouncements; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; foreign currency exchange rates and fluctuations in those rates; impact of changes to tax laws; general economic and capital markets conditions, including expected impact of inflation or interest rate changes; impact of geopolitical events and other hostilities; the timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that we intend or believe will or may occur in the future. Terminology, such as “believe,” “anticipate,” “should,” “could,” “intend,” “will,” “plan,” “expect,” “estimate,” “project,” “target,” “may,” “possible,” “potential,” “forecast” and “positioned” and similar references to future periods, are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words.

OVERVIEW

General

Fortive is a multinational business with global operations, with approximately 44% of our sales derived from customers outside the United States in 2025. As a company with global operations, our businesses are affected by worldwide, regional, and industry-specific economic conditions, trade policies, fiscal policies, regulatory factors, and political factors. Our geographic and industry diversity, as well as the range of products, software, and services we offer, typically help limit the impact of any one industry or the economy of any single country, except for the United States, on our operating results. Given the broad range of products manufactured, software and services provided, and geographies served, we do not use any indices other than general economic trends to predict the overall outlook for the Company. Our individual businesses monitor key competitors and customers, including their sales, to the extent possible, to gauge relative performance and the outlook for the future.

As a result of our geographic and industry diversity, we face a variety of opportunities and challenges, including technological development in most of the markets we serve, the expansion and evolution of opportunities in growing markets, trends and costs associated with a global labor force, trade policies, and consolidation of our competitors. We operate in a highly competitive business environment in most markets, and our long-term growth and profitability will depend, in particular, on our ability to expand our business across geographies and market segments, identify, consummate, and integrate appropriate acquisitions, develop innovative and differentiated new products, services, and software, expand and improve the effectiveness of our sales force, continue to reduce costs and improve operating efficiency and quality, attract relevant talent and retain, grow, and empower our talented workforce, and effectively address the demands of an increasingly regulated environment. We are making significant investments, organically and through acquisitions, to address technological change in the markets we serve and to improve our manufacturing, research and development, and customer-facing resources in order to be responsive to our customers throughout the world.

Segment Presentation

The IOS segment provides advanced instrumentation, software and services to tens of thousands of customers enabling their mission-critical workflows. The AHS segment supplies critical workflow solutions enabling healthcare providers to deliver exceptional patient care more efficiently. Refer to Note 1 of the consolidated condensed financial statements for further description of each segment.

Non-GAAP Measures

In this report, references to sales from existing businesses (“core revenue”) refer to sales from operations calculated according to generally accepted accounting principles in the United States (“GAAP”) but excluding (1) the impact from acquired and divested businesses and (2) the impact of foreign currency translation. References to sales attributable to acquisitions or acquired businesses refer to GAAP sales from acquired businesses recorded prior to the first anniversary of the acquisition, less the amount of sales attributable to certain businesses or product lines that have been divested, or, at the time of reporting, are pending divestiture, but are not, and will not be, considered discontinued operations prior to the first anniversary of the divestiture. The portion of sales attributable to the impact of currency translation is calculated as the difference between (a) the period-to-period change in sales (excluding sales impact from acquired businesses) and (b) the period-to-period change in sales (excluding sales impact from acquired businesses) after applying the current period foreign exchange rates to the prior year period. Core revenue should be considered in addition to, and not as a replacement for or superior to, sales, and may not be comparable to similarly titled measures reported by other companies.

Management believes that reporting the non-GAAP financial measure of core revenue provides useful information to investors by helping identify underlying growth trends in our business and facilitating comparisons of our sales performance with our performance in prior and future periods and to our peers. We exclude the effect of acquisition and divestiture related items because the nature, size, and number of such transactions can vary dramatically from period to period and between us and our peers. We exclude the effect of currency translation from core revenue because the impact of currency translation is not under management’s control and is subject to volatility. Management believes the exclusion of the effect of acquisitions and divestitures and currency translation may facilitate the assessment of underlying business trends and may assist in comparisons of long-term performance. References to core sales growth refer to the impact of both price and unit sales.

Business Trends

Our financial outlook is subject to various assumptions and risks, including but not limited to: ongoing geopolitical events; wars and hostilities in the Middle East and in Ukraine, including the corresponding impact on energy costs, interest rates, cybersecurity, international trade, and global economic conditions; monetary policies; inflationary pressures on expenses and pricing; uncertainties in governmental policies on international trade, regulations, sanctions, and healthcare; operational challenges from existing, new, increased, or the uncertain status of tariffs, including in some cases, subsequent rollbacks, refunds, or suspensions; foreign exchange rate volatility, including the impact of unhedged foreign currency debts; reduction in U.S. government spending due to H.R.1, also known as the One Big Beautiful Bill Act (“OBBBA”); and overall fiscal policies, including investment and taxation policy initiatives being considered in the U.S.; the incremental impacts of the Pillar Two initiative from the Organization for Economic Co-operation and Development (“OECD”); and the impact from the Separation.

In addition, our financial outlook is subject to the impact of the Supreme Court of the United States ruling invalidating certain tariffs imposed under the International Emergency Economic Powers Act (the “IEEPA Ruling”). As a result of the IEEPA Ruling, the U.S. Customs and Border Protection (“CBP”) has established a system to process IEEPA tariff refund claims. We have submitted claims under this process and expect to continue doing so, as permitted. As refund claims are accepted by CBP, we recognize the approved amounts within cost of sales. The ultimate recoverability, timing, and amount of any such refunds remain uncertain and are subject to CBP review, as well as further legal, regulatory, and administrative developments. In addition, in response to the IEEPA Ruling, the current administration has imposed, and is expected to further impose, new tariffs under other existing authorizations. Impacts of the IEEPA Ruling and any new responsive tariffs, including our ability to mitigate fully any such new tariffs, are uncertain and may include changes to operational and transaction costs; pricing or cost responses by customers, suppliers, and other supply chain partners; actions by other countries, including changes to counter‑tariffs or related trade agreements; and the potential for refund requests from our customers.

We continue to monitor the conditions above and deploy the Fortive Business System (“FBS”), including tools and processes to leverage existing sourcing strategies and optimize production and logistics to actively manage these challenges and utilize pricing, cost and productivity actions and other countermeasures designed to offset the aforementioned dynamics.

RESULTS OF OPERATIONS

Sales Growth

The following table summarizes total aggregate year-over-year sales growth and the components thereof for the second quarter as compared to the comparable period of 2025:

Sales growth in the three months ended July 3, 2026 (the “quarter” or the “second quarter”) and the six months ended July 3, 2026 (the “year-to-date period”) was driven by favorable pricing of 2.4% and 2.3%, respectively, volume growth of 4.3% and 3.8%, respectively, and favorable foreign currency translation.

Geographically, core revenue growth in both the second quarter and the year-to-date period was driven primarily by strong demand in North America as well as solid growth in Latin America and Asia-Pacific, slightly offset by a decline in Europe, Middle East, and Africa (“EMEA”).

Refer to the IOS and AHS segment sections for further detail.

Operating Profit Margins

In the second quarter, operating profit margin was 19.1% compared to 16.7% in the comparable period of 2025, resulting in an increase of 240 basis points due to:

• The year-over-year favorable impacts from pricing, higher volume, and increased productivity measures through our FBS initiatives, and reductions of cost through organizational streamlining, partially offset by higher employee costs, product mix, and growth investments — favorable 80 basis points
• The year-over-year effect of all other items in the second quarter including +70 basis points from amortization expense for existing businesses, +55 basis points from reduced discrete restructuring spending versus the comparable period, and +40 basis points from tariff refunds, partially offset by -5 basis points from unfavorable acquisition and divestiture-related impacts — favorable 160 basis points

In the year-to-date period, operating profit margin was 18.5% compared to 16.7% in the comparable period of 2025, resulting in an increase of 180 basis points due to:

• The year-over-year favorable impacts from pricing, higher volume, reductions of cost through organizational streamlining, increased productivity measures through our FBS initiatives, and foreign currency translation, partially offset by higher employee costs, product mix, and growth investments — favorable 100 basis points
• The year-over-year effect of all other items in the year-to-date period including +60 basis points from amortization expense for existing businesses, +20 basis points from tariff refunds, and +15 basis points from reduced discrete restructuring spending, partially offset by -15 basis points from unfavorable acquisition and divestiture-related impacts — favorable 80 basis points

INTELLIGENT OPERATING SOLUTIONS (IOS)

Selected Financial Data

Components of Sales Growth

Sales growth in the second quarter and the year-to-date period was driven by favorable pricing across the segment of 2.7% and 2.4%, respectively, volume growth of 4.8% and 3.9%, respectively, primarily driven by professional instrumentation, facilities and asset lifecycle software, and gas detection, and favorable foreign currency translation.

Geographically, core revenue growth in both the second quarter and the year-to-date period was driven primarily by strong demand in North America, as well as solid growth in Latin America and Asia-Pacific, slightly offset by a decline in EMEA.

In the second quarter, operating profit margin increased 230 basis points as compared to the comparable period of 2025 due to:

• The year-over-year favorable effects of pricing, higher volume, and increased productivity measures through our FBS initiatives, offset by product mix and higher employee costs — favorable 70 basis points
• The year-over-year effect of all other items, including +80 basis points from reductions in discrete restructuring spending, +45 basis points from amortization expense for existing businesses, and +45 basis points from tariff refunds, slightly offset by -10 basis points in unfavorable acquisition and divestiture-related impacts — favorable 160 basis points

In the year-to-date period, operating profit margin increased 110 basis points, as compared to the comparable period of 2025 due to:

• The year-over-year favorable effects of pricing, higher volume, increased productivity measures through our FBS initiatives, organizational streamlining, and foreign currency translation, offset by higher employee costs and product mix — favorable 30 basis points
• The year-over-year effect of all other items, including +40 basis points from amortization expense for existing businesses, +25 basis points from reductions in discrete restructuring spending, and +25 basis points from tariff refunds, slightly offset by -10 basis points in unfavorable acquisition and divestiture-related impacts — favorable 80 basis points

ADVANCED HEALTHCARE SOLUTIONS (AHS)

Selected Financial Data

Components of Sales Growth

Sales growth in the second quarter and year-to-date period was driven by volume growth of 3.4% primarily driven by increased demand for sterilization products, favorable pricing across the segment of 1.9% and 2.1%, respectively, and favorable foreign currency translation.

Geographically, core revenue growth was primarily driven by strong growth in North America and Latin America in both the second quarter and the year-to-date period.

In the second quarter, operating profit margin increased 10 basis points, as compared to the comparable period of 2025, due to:

• Year-over-year impact from favorable pricing and higher volume, more than offset by product mix, higher employee costs and growth investments — unfavorable 75 basis points
• The year-over-year effect of all other items in the second quarter, including +120 basis points from amortization expense for existing businesses and +25 basis points from tariff refunds, slightly offset by -35 basis points from discrete restructuring plans and -25 basis points from net effects of acquired businesses — favorable 85 basis points

In the year-to-date period, operating profit margin increased 150 basis points, as compared to the comparable period of 2025, due to:

• Year-over-year favorable impact from pricing, higher volume, and organizational streamlining, partially offset by higher employee costs, product mix, and growth investments — favorable 70 basis points
• The year-over-year effect of all other items in the year-to-date period, including +100 basis points from amortization expense for existing businesses and +15 basis points from tariff refunds, offset by -20 basis points from discrete restructuring plans and -15 basis points from net effects of acquired businesses — favorable 80 basis points

COST OF SALES AND GROSS PROFIT

The year-over-year increase in gross profit during the second quarter and year-to-date period was driven by favorable pricing, higher volume, gains from productivity measures and FBS initiatives, and tariff refunds, partially offset by product mix and higher employee costs. The increase in the year-to-date period was also driven by favorable impacts from foreign currency exchange rates.

OPERATING EXPENSES

The year-over-year increase in SG&A during the second quarter and year-to-date period was primarily due to higher employee costs and targeted growth investments to support innovation and commercial initiatives, partially offset by reductions of cost through organizational streamlining and benefits from productivity measures implemented through our FBS initiatives. The increase in SG&A in the year-to-date period also reflected unfavorable foreign currency translation.

R&D, consisting principally of internal and contract engineering personnel costs, increased during the second quarter and year-to-date period as compared to the comparable period of 2025 due to ongoing investments in innovation.

NON-OPERATING INCOME (EXPENSE), NET

Interest Expense, net

Net interest expense for the second quarter and year-to-date period was $35.4 million and $67.0 million as compared to $32.1 million and $64.1 million in the comparable periods in 2025. The year-over-year increases are due to a higher weighted average interest rate of the debt portfolio driven by the paydown of lower interest rate foreign currency debt and refinancing U.S. dollar-denominated senior notes. For discussion of our outstanding indebtedness, refer to Note 4 to the consolidated condensed financial statements.

INCOME TAXES

Our effective tax rate for the three and six months ended July 3, 2026 was 12.4% and 14.4%, respectively, as compared to 20.1% and 18.0%, for the three and six months ended June 27, 2025, respectively. The decrease in the effective tax rate for the three and six months ended July 3, 2026 as compared to the three and six months ended June 27, 2025 was primarily related to the mix of earnings between jurisdictions and changes in valuation allowances.

Our effective tax rate for the three and six months ended July 3, 2026, differs from the U.S. federal statutory rate of 21% due primarily to the impact of credits and deductions provided by law, including those associated with state income taxes, and changes in our uncertain tax position reserves.

COMPREHENSIVE INCOME

Comprehensive income decreased by $114 million during the second quarter as compared to the comparable period in 2025 due to unfavorable changes in foreign currency translation of $105 million, partially offset by a $46 million increase in net earnings from continuing operations. Additionally, there was $55 million of net earnings from discontinued operations in the 2025 comparable period.

Comprehensive income decreased by $219 million during the year-to-date period as compared to the comparable period in 2025 due primarily to unfavorable changes in foreign currency translation adjustments of $178 million, partially offset by a $70 million increase in net earnings from continuing operations. Additionally, there was $114 million of net earnings from discontinued operations in the 2025 comparable period.

LIQUIDITY AND CAPITAL RESOURCES

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing, and financing activities. We generate substantial cash from operating activities and believe that our operating cash flow and other sources of liquidity, which consist of available cash, our revolving credit facility, and access to commercial paper, bank loans, and capital markets, will be sufficient to allow us to continue funding and investing in our existing businesses, consummate strategic acquisitions, execute strategic separations, repurchase common stock, make interest and principal payments on our outstanding indebtedness, fulfill our contractual obligations, and manage our capital structure on a short- and long-term basis.

As of July 3, 2026, we held approximately $374 million of cash and equivalents that were invested in highly liquid investment-grade instruments with a maturity of 90 days or less, of which approximately 91% was held outside of the United States.

We generally satisfy any short-term liquidity needs that are not met through operating cash flows and available cash primarily through issuances under our Commercial Paper Programs, which are supported by our $2.0 billion Revolving Credit Facility. In addition to providing support for our Commercial Paper Programs, the Revolving Credit Facility can also be used for working capital and other general corporate purposes. As of July 3, 2026, no borrowings were outstanding under the Revolving Credit Facility. We also may from time to time access the capital markets, including to take advantage of favorable interest rate environments or other market conditions.

Our ability to access the commercial paper market, and the related costs of these borrowings, is affected by the strength of our credit rating and market conditions. Any downgrade in our credit rating would increase the cost of borrowing under our commercial paper programs and the Credit Agreement, and could limit or preclude our ability to issue commercial paper. If our access to the commercial paper market is adversely affected due to a downgrade, change in market conditions, or otherwise, we would expect to rely on a combination of available cash, operating cash flow, and the Revolving Credit Facility to provide short-term funding. In such event, the cost of borrowings under the Revolving Credit Facility could be higher than the historic cost of commercial paper borrowings.

On July 20, 2026, we filed with the SEC an “automatic shelf” registration statement (the “Shelf Registration Statement”). Under the Shelf Registration Statement, we may from time to time sell shares of common stock, preferred stock, debt securities, depository shares, purchase contracts, purchase units, warrants and subscription rights in one or more offerings.

We continue to monitor the financial markets, the stability of U.S. and international banks and general global economic conditions. In addition, our access to the capital markets and other financing sources is impacted by any change in our credit rating. If changes in financial markets or other areas of the economy or a downgrade in our credit rating adversely affect our access to the capital markets and other financing sources, we would expect to rely on a combination of available cash and

existing available capacity under our credit facilities to provide short-term funding. As of July 3, 2026, we expect to have sufficient liquidity to satisfy our cash needs for the foreseeable future.

Refer to Note 4 of the consolidated condensed financial statements for additional information regarding our financing activities and indebtedness.

Overview of Cash Flows and Liquidity

Following is an overview of our cash flows and liquidity ($ in millions):

Operating Activities

Operating cash flows from continuing operations can fluctuate significantly from period-to-period as working capital needs and the timing of payments for income taxes, interest, pension funding, and other items impact reported cash flows.

Operating cash flows from continuing operations were $519 million during the year-to-date period, representing an increase of $122 million when compared to the comparable period of 2025. The year-over-year change in operating cash flows was primarily attributable to the following factors:

• Year-over-year increase of $79 million in operating cash flows from net earnings from continuing operations, net of non-cash items (Amortization, Depreciation, and Stock-based compensation).
• The aggregate changes in accounts receivable, inventories, and trade accounts payable used $1 million during the year-to-date period as compared to generating $43 million in the comparable period of 2025. The amount of cash flow generated from or used in a period depends upon the cash conversion cycle, which can be impacted by timing of revenue and collection from customers, vendor cash disbursement, and purchases of materials and components.
• The aggregate changes in prepaid expenses and other assets, and accrued expenses and other liabilities used $46 million of cash in the year-to-date period as compared to using $133 million of cash in the comparable period of 2025. The year-over-year changes were driven primarily by timing differences related to contract assets, contract liabilities, and payments of interest and taxes.

Investing Activities

Investing cash outflows from continuing operations in the year-to-date period were $73 million greater than the comparable period of 2025, driven by a year-over-year increase in cash used for acquisitions and higher capital expenditures.

Capital expenditures are made primarily for increasing production capacity, replacing aged equipment, supporting product development initiatives for hardware and software offerings, improving information technology systems, and purchasing equipment that is used in revenue arrangements with customers.

Financing Activities

Financing cash flows from continuing operations consist primarily of issuances and repayments of debt and commercial paper, payments of cash dividends to shareholders and share repurchases.

In the year-to-date period, financing activities from continuing operations used cash of $400 million, reflecting the following transactions:

• We incurred $434 million in net commercial paper borrowings.
• We repurchased 12.3 million shares of our common stock for approximately $700 million.
• We made dividend payments to common shareholders totaling $18 million in the first quarter. Dividends declared in the second quarter of $18 million were not paid to shareholders until July 6, 2026.
• On February 13, 2026, Fortive repaid upon maturity the $293 million of outstanding principal of the 3.70% Euro-denominated senior unsecured notes due 2026 using net proceeds from the commercial paper programs.
• On May 14, 2026, we completed the sale of our registered offering of the 2031 Notes and the 2036 Notes, yielding net proceeds of $1,089 million.
• On June 15, 2026, Fortive repaid upon maturity the $900 million of outstanding principal of the 3.15% senior unsecured notes due 2026 using net proceeds from the 2031 and 2036 Notes.

In the comparable 2025 period, financing activities from continuing operations generated cash of $513 million, reflecting the following transactions:

• We repaid $253 million in net commercial paper borrowings.
• We repurchased 4.4 million shares of our common stock for approximately $338 million.
• We made dividend payments to common shareholders totaling $54 million.
• We received a cash dividend of $1.15 billion from Ralliant in connection with the Separation (the “Ralliant Dividend”).

CRITICAL ACCOUNTING ESTIMATES

There were no material changes during the three and six-month periods ended July 3, 2026 to the items we disclosed as our critical accounting estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report on Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our concentrations of credit risk arising from trade receivables are limited due to the diversity of our customers. Our businesses perform credit evaluations of their customers’ financial conditions as appropriate and also obtain collateral or other security when appropriate.

Additional quantitative and qualitative disclosures about market risk appear in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Instruments and Risk Management,” in our 2025 Annual Report on Form 10-K. There were no material changes during the three and six-month period ended July 3, 2026 to the information reported in our 2025 Annual Report on Form 10-K relating to our evaluation of interest rate, foreign currency exchange, and commodity price risk. Refer to Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for discussion around the impact of these items in the second quarter and year-to-date period.

ITEM 4. CONTROLS AND PROCEDURES

Our management, with the participation of the President and Chief Executive Officer, and the Senior Vice President and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the President and Chief Executive Officer, and the Senior Vice President and Chief Financial Officer, have concluded that, as of the end of such period, these disclosure controls and procedures were effective.

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the most recent completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1A. RISK FACTORS

Information regarding risk factors appears in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Information Relating to Forward-Looking Statements,” in Part I - Item 2 of this Form 10-Q and in the “Risk Factors” section of our 2025 Annual Report on Form 10-K. There were no material changes during the quarter ended July 3, 2026 to the risk factors reported in the “Risk Factors” section of our 2025 Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In February 2022, our Board of Directors (the “Board”) adopted a share repurchase program (the “General Share Repurchase Program”), under which our Board has made various authorizations for the repurchase of shares of our common stock. On May 4, 2026, the Board made a new authorization of 14.4 million shares, for a total cumulative authorization of 73.2 million shares as of July 3, 2026. In 2025, in connection with the Separation, our Board adopted a separate and incremental special purpose share repurchase program (the “Special Share Repurchase Program”) under which we may repurchase up to $550 million of our common stock exclusively from the proceeds we received from Ralliant in connection with the Separation.

As of July 3, 2026, there were 17.7 million shares and $66.7 million remaining authorized under the General Share Repurchase Program and Special Share Repurchase Program, respectively. There is no expiration date for these repurchase programs, and the timing and amount of repurchases under the programs are determined by the Company's management based on market conditions and other factors. The repurchase programs may be suspended or discontinued at any time by the Board of Directors.

The following table provides details about our share repurchases, including those pursuant to a 10b5-1 plan, during the fiscal quarter ended July 3, 2026:

ITEM 5. OTHER INFORMATION

Trading Plans

During the second quarter ended July 3, 2026, no directors or Section 16 officers adopted, modified, or terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

ITEM 6. EXHIBITS

Exhibit Number Description

3.1 Restated Certificate of Incorporation of Fortive Corporation (Incorporated by reference from Exhibit 3.1 to Fortive Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 2024. Commission File No. 1-37654). 3.2 Amended and Restated Bylaws of Fortive Corporation (Incorporated by reference from Exhibit 3.1 to Fortive Corporation’s Current Report on Form 8-K, filed on November 8, 2022. Commission File No. 1-37654). 4.1 Indenture, dated May 14, 2026, between Fortive Corporation and Truist Bank (Incorporated by reference from Exhibit 4.1 to Fortive Corporation's Current Report on Form 8-K, filed on May 14, 2026. Commission File No. 1-37654) 4.2 Supplemental Indenture No. 1, dated May 14, 2026, between Fortive Corporation and Truist Bank (Incorporated by reference from Exhibit 4.2 to Fortive Corporation's Current Report on Form 8-K, filed on May 14, 2026. Commission File No. 1-37654) 10.1 Description of Compensation Arrangement for Non-management Directors* 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. † 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. † 32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. † 32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. † 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. † 101.SCH Inline XBRL Taxonomy Extension Schema Document † 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document † 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document † 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document † 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document † (104) The cover page from this Quarterly Report on Form 10-Q for the quarter ended July 3, 2026, formatted in Inline XBRL and contained in Exhibit 101.

* Indicates management contract or compensatory plan, contract or arrangement.

† Filed electronically herewith.