Fortive (FTV) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 3% year-over-year to $1.54B, with adjusted EPS up 14% and free cash flow up 12%.

• All segments reported positive orders growth, with double-digit growth in Precision Technologies (PT) and high single-digit ARR growth in IOS and AHS.

• Announced plan to separate into two independent, publicly traded companies by Q4 2025, with the PT spinoff on track.

• Accelerated share repurchases in Q3, totaling 4 million shares for the quarter and 6 million year-to-date.

• Continued focus on innovation, operational excellence, and SaaS acceleration, with multiple new product launches.

Financial highlights

• Q3 adjusted EPS: $0.97 (+14% year-over-year); Q3 revenue: $1.54B (+3%); free cash flow: $431M (+12%).

• Year-to-date adjusted EPS: $2.73 (+11%); YTD revenue: $4.61B (+3%); YTD free cash flow: $941M (+13%).

• Record Q3 adjusted gross and operating margins, with gross margin at 60% and adjusted operating margin at 27%.

• Full-year adjusted diluted EPS guidance raised to $3.84–$3.87, up 12–13% year-over-year.

• Free cash flow expected to reach approximately $1.4B for the full year.

Outlook and guidance

• Q4 2024 revenue expected at $1.63B–$1.65B; full-year at $6.24B–$6.26B.

• Q4 adjusted EPS guidance: $1.11–$1.14; full-year adjusted EPS: $3.84–$3.87 (+12–13%).

• All three segments expected to deliver organic growth in 2025, with mid-single digit growth and 75 bps margin expansion anticipated.

• Tax rate expected to rise from 11% to 13–15% in 2025.

• Proactive restructuring of $20–30M planned for Q4 related to the separation.