Fortive (FTV) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered solid performance with adjusted EPS of $0.85, matching expectations, despite a 3% revenue decline and macroeconomic headwinds.

• IOS and AHS segments showed growth, offset by a significant decline in PT due to macro and policy uncertainty.

• Adjusted gross and operating margins expanded, driven by operational execution and disciplined working capital management.

• Progressed with the planned separation of Precision Technologies (Ralliant), targeted for end of Q2 2025.

• Mark Okerstrom appointed CFO effective March 24, 2025, bringing expertise in capital allocation and growth acceleration.

Financial highlights

• Q1 2025 revenue was $1.47 billion, down 3% year-over-year; core revenue declined 2%.

• Adjusted operating profit was $373 million, with a 20 bps margin expansion; adjusted operating margin reached 25.3%.

• Adjusted EPS grew 2% year-over-year to $0.85; adjusted free cash flow was $222 million, up 7% over six months.

• Repurchased 2.5 million shares in Q1 2025 for $203 million.

• Cash and equivalents increased to $892 million as of March 28, 2025.

Outlook and guidance

• Q2 2025 adjusted EPS expected between $0.85–$0.90; full-year adjusted EPS guidance of $3.80–$4.00, reflecting tariff headwinds and mitigation actions.

• PT core revenues expected down low single digit for the year; IOS/AHS growth outlook maintained at low to mid single digit.

• Margins expected to be down sequentially in Q2, improving in the second half as mitigation takes effect.

• Capital spending for 2025 projected at $120–$140 million.

• Full-year guidance excludes impact of pending PT separation; update expected post-spin.