As a reminder, we successfully completed the separation of our Precision Technologies segment, now operating independently as Rallian, on June 28, 2025. Our results and outlook discussed today are on a continuing operations basis unless otherwise specified. First, our teams are executing very well with laser focus on driving profitable organic growth with the power of our Fortive Business System. This drove solid results ahead of our expectations, including core growth of roughly 2%, adjusted EBITDA growth of 10%, and adjusted EPS growth of 15%.
Though we aspire for much better as we continue executing our growth strategy, we were pleased to see acceleration in the business. We now expect to deliver between $2.63 and $2.67 per share, reflecting our adjusted EPS overperformance in the third quarter, the impact of incremental Q3 buybacks, and our otherwise unchanged view on Q4. Third, we deployed capital in the quarter in accordance with our new approach anchored in delivering the strongest relative returns for shareholders. During the third quarter, we deployed $1 billion to share repurchases, retiring approximately 21 million shares or 6% of our fully diluted share count.
We are focused on delivering benchmark-beating shareholder returns by leveraging FBS to accelerate profitable organic growth, allocating capital intelligently to optimize shareholder returns over the medium to long term, and rebuilding investor trust. This marks a further foray into the high-growth solar operations vertical and increases customer productivity by reducing troubleshooting time and decreasing hazard exposures in the quarter. We also recently stepped up our efforts in South Asia, including India, as our region continues to see exceptional economic growth. We saw significant acceleration in the region across both segments, and we are confident that our enhanced regional presence will drive strong momentum in this high-growth region in the years to come.
| Metric | Period | Current guidance |
|---|---|---|
| Adjusted EPS (full year) | FY2025 | $2.63 to $2.67 (Raised, reflecting Q3 overperformance and incremental Q3 buybacks, with an unchanged view on Q4) |
| Core growth | Q4 2025 | Expected to moderate; AHS broadly in line with Q3, very modest core growth at IOS (Moderating) |
| Tariffs net of countermeasures | Q4 2025 | Not expected to be material |
| Tax rate | Through 2026 | Mid-teens (roughly 14%) (Some upside risk from Pillar Two proposals if the U.S. is not excluded) |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | Up roughly 2% (reported and core) | Growth at both IOS and AHS with modest outperformance versus expectations in both segments. |
| Adjusted EBITDA | Up 10% to $309 million | Operating leverage, deliberate organizational streamlining, and sharpened corporate cost discipline; margin expanded about 200 basis points to 30%. |
| Adjusted EPS | Up 15% to $0.68 | Growth in adjusted EBITDA, favorable interest expense on lower debt balances, and the positive year-over-year impact of share repurchases. |
| Intelligent Operating Solutions revenue | Up just over 2.5% reported, 2% core | Demand for facility and asset lifecycle software, resilient professional instrumentation demand, and strong growth in gas detection products. |
| IOS adjusted EBITDA | Up 7% to $242 million | Operating leverage and reduced costs from flattening and rationalizing segment-level structures; margin grew to 34.6% from 33.3%. |
| Advanced Healthcare Solutions revenue | Up about 2% (just over 1% core) to $328 million | Reimbursement and funding policy changes deferred U.S. hospital capital expenditures, partially offset by sequential demand improvement and solid software growth. |
| AHS adjusted EBITDA | Up approximately 7% | Operating leverage and flattened organizational structures, partially offset by modest incremental R&D investments. |
| IOS adjusted gross margin | Down just over 90 basis points to 65.7% | Tariff cost pressures partially offset by pricing and supply chain countermeasures. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Fortive Accelerated strategy (innovation, commercial, recurring value) | Outlined at June Investor Day | Now in execution mode with early progress across all three growth levers | Rising |
| Capital allocation / share repurchases | — | $1 billion deployed to buybacks in Q3; balanced approach favoring buybacks and smaller bolt-on M&A, with no transformational M&A required | Rising |
| Recurring revenue mix | Fluke roughly 5-6% recurring five years ago, near 0% ten years ago | Fluke now about 15% recurring; recurring revenue growing faster than fleet average with no set ceiling | Rising |
| Healthcare reimbursement and funding policy headwinds | Flagged last quarter as deferring hospital capital expenditures | Sequential improvement in North America capital demand as deferred orders began getting funded in September and October | Steady |
| Regional demand divergence | Western Europe soft most of the year; brief improvement in Q2 | North America strongest; Western Europe softest and not improving; rest of world mixed and stable | Steady |
| Margin expansion and cost discipline | — | Strong Q3 margin expansion from cost discipline and one-timers, with some savings to be reinvested for growth in Q4 | Rising |