Fortive Corporation (FTV) Earnings Call Transcript & Summary

My name is Darryl, and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to Fortive Corporation's Second Quarter 2026 Earnings Results Conference Call. [Operator Instructions] I would now like to turn the call over to Ms. Christina Jones, Vice President of Investor Relations. Ms. Jones, you may begin your conference.

Thank you, and thank you, everyone, for joining us on today's call. I am joined today by Olumide Soroye, Fortive's President and CEO; and Mark Okerstrom, Fortive's CFO. During today's call, we present certain non-GAAP financial measures. Information required by Regulation G is available on the Investors section of our website at fortive.com. We will also make forward-looking statements, including statements regarding events or developments that we expect or anticipate will or may occur in the future. These forward-looking statements are subject to a number of risks and actual results might differ materially from any forward-looking statements that we make today. Information regarding these risk factors is available in our SEC filing, including our annual report on Form 10-K and the subsequent quarterly reports on Form 10-Q. These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements. Our statements on period-to-period increases or decreases refer to year-over-year comparisons, unless otherwise specified. And our results and outlook discussed today are on a continuing operations basis. With that, I'll turn the call over to Olumide.

Thank you, Christina, and thank you all for joining our call today. Let me begin on Slide 3. Q2 marked another quarter of strong results and execution of the Fortive accelerated strategy by our Fortive team. Four key messages from the quarter. First, our teams delivered strong financial performance across both segments. On a consolidated basis, we delivered core revenue growth of 6.7%, adjusted EBITDA growth of 12% and adjusted EPS growth of 28%. Importantly, our results reflect continued progress on our objective of driving faster profitable organic growth, powered by our Fortive business system amplified. Second, we remain disciplined in our [ capital ] allocation approach with relentless focus on optimizing shareholder returns over the medium to long term. This quarter, we executed a small bolt-on acquisition and deployed another roughly $200 million to share repurchases, bringing total share repurchases since our launch of new Fortive a year ago to approximately 38 million shares or 11% of shares outstanding. Third, we continue to execute our Fortive accelerated strategy, and we are pleased to see evidence that our investments in innovation, commercial and recurring customer value, our contribution to accelerating growth margin expansion and earnings performance, reinforcing our confidence in our medium-term financial framework and value creation opportunity. Finally, we are raising our full year 2026 adjusted EPS guidance to $2.95 to $3.05, reflecting our solid first half performance, and our confidence in the trajectory of the business. Moving to Slide 4. Let me highlight some of the progress we are making in executing the 3 pillars of our Fortive accelerated strategy. Starting with the first pillar, delivering faster partial organic growth. Overall, we remain encouraged by the progress we are seeing across innovation, commercial and recurring customer value, all of which are building this foundation for durable, faster organic growth. This quarter, our acceleration innovation velocity again translated into faster growth. At Fluke, our innovation funnel is steadily expanded with new product introductions tightly aligned to strategic growth areas such as data centers, defense and early in career technicians. Demand for CertiFiber Max continues to exceed expectations, helping establish Fluke's position in the rapidly growing data center commissioning and maintenance market and driving pull-through of the broader Fluke portfolio into this high-growth area. In facilities and asset life cycle solutions, we are expanding our AI-enabled predictive maintenance portfolio, our ServiceChannel and Accruent including tools that help field service technicians diagnose and fix issues more accurately in the field. At Gordian, our Flash AI solution launched in Q1 is now in production across many of our strategic accounts are running well above plan, cutting construction cost estimate in time from days to minutes and creating measurable value for customers and for Gordian. In health care, ASP received FDA clearance for a 50-pound expanded steroid load capacity, put us strengthening our position in robotic-assisted surgery applications, 1 of the faster-growing areas within the operating room environment. On the commercial side, we maintained our focus on faster-growing end markets and regions where we've made deliberate targeted investments to capture growth at Fluke investments in data center expertise drove incremental demand for our networks, power quality and battery testing product lines. Additionally, we continue to see strong momentum in India, where our localized service and support investments are strengthening customer relationships and helping drive growth. So this channel is invested in commercial and markets and resources across Europe to capture the meaningful international opportunity in the business. At Gordian, our investment in growing contractor engagement is reinforcing the competitive differentiation of our two-sided procurement marketplace. In health care, we continue to deepen our engagement with enterprise health systems and ambulatory surgical center networks through coordinated commercial efforts across ASP, census and our other advanced health care solutions operating brands. On our recurring customer value initiatives, we made further progress on deepening customer life cycle engagement and improving revenue durability. In Q2, recurring revenue growth was strong at cross-port segments. At Fluke recurring revenue growth was driven by strong performance in services and software offerings. And early customer feedback on AI-enabled capabilities recently introduced within Fluke's main platform has been very encouraging. ASP Consumables and services had another quarter of strong growth. with solid growth contributions from every major region. Moving to the [indiscernible] pillar, the [indiscernible] capital allocation is an internal component of our Fortive accelerated strategy. Consistent with our priorities, we deployed another roughly $200 million to share repurchases in Q2. Since the spin-off, we have deployed nearly $2 billion for share repurchases, representing 38 million shares by approximately 11% of diluted shares outstanding. Our revamped bolt-on M&A engine, our team is now in place. We are continually evaluating opportunities for high-quality accretive bolt-on acquisitions that meet our rigorous strategic and financial criteria. This quarter, we completed the acquisition of the majority stake in UV Smart, an innovative company was complementary UVC high-level disinfection technology, expense ASPs portfolio and enables more efficient disinfection of specialized instruments. Looking forward, our capital allocation priorities remain clear: Invest in organic growth, pursue bolt-on M&A where risk-adjusted returns exceed other uses of capital, return capital through share repurchases and maintain a modest growing dividend, all with a focus on best relative and maximizing medium- to long-term shareholder value. Moving to our final pillar, building and maintaining investor trust. We are pleased to deliver strong performance ahead of expectation for a fourth consecutive quarter of [Audio gap]. We remain laser-focused on executing against our 2026 financial and strategic plan and continue to have strong confidence in our medium-term financial framework that we shared at our last Investor Day. With that, I'll turn it over to Mark to walk through our financial results for the second quarter in more detail. Thanks, Olumide.

I'll begin with Slide 5. In the second quarter, we delivered total revenue of nearly $1.1 billion, up almost 8% year-over-year on a reported basis, up 6.7% on a core basis. We were pleased to see price and volume growth again in both exits with results driven by healthy customer demand and strong commercial and operational execution across the portfolio. Software-related revenue remained a meaningful contributor to growth in the quarter, reflecting the underlying strength of our businesses and robust customer demand for our increasingly AI-driven new front leases. Regarding core growth by geography, North America saw a modest sequential acceleration in Q2 and continues to be our strongest performing region. Revenue in the Europe and Middle East and Africa region declined modestly due to macroeconomic uncertainty associated with heightened geopolitical tensions and continued economic softness across the region. Pressure in EMEA was more than offset by year-over-year growth and sequential acceleration in APAC and LatAm, driven by strong demand for professional instrumentation and health care consumables. Adjusted gross margin was 63% in the quarter, down approximately 100 basis points year-over-year. Adjusted gross margin performance was primarily driven by product mix dynamics resulting from outsized growth in certain lower-margin products, partially offset by operating leverage. Note that tariffs had a minimal impact this quarter as the prior year Q2 also reflected tariff-related costs for most of the period. Q2 adjusted EBITDA was $323 million, up 12% year-over-year. This strong performance was driven by adjusted gross profit growth, operating leverage and discrete structural cost savings, partially offset by growth investments to support our Fortive accelerated strategy. Adjusted EBITDA margin in the quarter expanded by approximately 110 basis points year-over-year to 29.5%. We delivered adjusted earnings per share of $0.74 in Q2, up over 28% year-over-year marking our fourth consecutive quarter of double-digit adjusted EPS growth. Strong adjusted EPS performance in Q2 was driven by growth in adjusted EBITDA and the positive year-over-year impact of share repurchases. We generated roughly $270 million of free cash flow in the second quarter with our trailing 12-month free cash flow topping $1 billion with conversion on net income well north of [ 100%. ] Please note that during the quarter, we recognized a $4.5 million IEEPA tariff refund benefit in GAAP earnings. We expect another roughly $20 million to $25 million of tariff refunds in the coming quarters. To help investors more easily compare results across periods, we exclude the impact of IEEPA tariff refunds from our adjusted metrics and expect to continue doing so going forward, for the cash benefit is very real and will be deployed using our disciplined capital allocation framework. Moving to our segment results, starting with Intelligent Operating Solutions on Slide 6. Revenue for this segment grew about 9% on a reported basis with core revenue growth of 7.4%, and we are pleased to see broad momentum continue across the segment. Core growth was driven by both price and volume reflecting solid performance across professional instrumentation, facility and asset life cycle solutions and gas detection products. At Fluke, order volume remained strong with order growth modestly outpacing revenue growth during the quarter. Customer demand continues to be robust across our industry-leading portfolio and across a broad set of geographies. Our Fluke team executed with discipline across the board, while increasing investments into further tapping into key high-growth end markets, including data centers and defense. North America remained our strongest growth driver with broad-based contributions across product lines. While performance in Europe was affected by macroeconomic uncertainty, this was more than offset by strong growth in APAC and LatAm, where increased commercial investments in strategic growth markets are yielding promising early results. Both in facilities and asset life cycle solutions was strong getting Q2 led by strong performance in multisite facility maintenance and marketplace software in North America. We continue to see evidence that our commercial and innovation investments are driving increased demand for our increasingly AI-enhanced products. Our Gas Detection business is growing nicely buoyed by strong demand for our Hardware as a Service product line in North America, the Middle East and in Latin America. Adjusted gross margin in this segment was just over 65%, down about 100 basis points year-over-year, primarily due to strong growth for some of our lower-margin products serving multisite retail customers, partially offset by operating leverage. Q2 adjusted EBITDA in the segment grew 12% to $264 million, driven by adjusted gross profit growth, operating leverage and discrete structural cost savings, partially offset by growth investments. Adjusted EBITDA margin for Q2 expanded by about 100 basis points year-over-year to just under 35%. Moving to our Advanced Healthcare Solutions segment on Slide 7. We delivered total revenue of nearly $340 million, revenue grew 6% year-over-year and 5.3% on a core basis. Q2 growth was driven by solid demand for health care consumables, services and software in Latin America, APAC and North America. Our software products in the segment continued to deliver strong growth driven by [indiscernible] execution and strong provider demand for our gastrointestinal case documentation solution. Low temperature sterilization capital demand improved modestly again in Q2 and contribute to growth. Adjusted gross margin in the segment was roughly 58%, down about 110 basis points year-over-year, reflecting product mix dynamics and strategic growth investments, partially offset by operating leverage. Q2 adjusted EBITDA in the segment was $88 million, up approximately 3% year-over-year, driven by adjusted gross profit growth, operating leverage and discrete structural cost savings, partially offset by growth investments. Adjusted EBITDA margin contracted by about 80 basis points year-over-year, while remaining a healthy 26%. Turning to Slide 8. Our balance sheet remains strong. We finished the quarter at 2.7x gross debt to adjusted EBITDA, modestly delevering from last quarter. As noted earlier, we deployed roughly $200 million to share repurchases in the second quarter reflecting our continued focus on deploying capital with a laser focus on driving best relative risk adjusted returns and confidence in our ability to deliver on our value creation plan. As a result, we had approximately 307 million diluted shares outstanding at the end of Q2. In terms of M&A, we completed the acquisition of a majority stake in UV Smart towards the end of Q2, and the execution of our value creation plans for the two small bolt-on acquisitions we completed in Q4 of last year are both going according to plan. We continue to evaluate high-quality accretive bolt-on deals that meet our rigorous strategic and financial criteria and deliver superior returns relative to alternative uses of capital, and we now have the team and processes in place to execute effectively on our M&A strategy. We have a healthy balance sheet and a growing business with high durability, strong margins low capital intensity and very attractive free cash flow generation characteristics. All of this gives us ample capacity to execute on our capital allocation priorities with a relentless focus on optimizing shareholder returns in the medium to long term. Moving to Slide 9. We are raising our full year 2026 adjusted EPS guidance range to $2.95 to $3.05, reflecting solid first half performance and confidence in the trajectory of the business. This outlook assumes a continuation of the market dynamics we experienced in Q2 and reflects current tariff rates. Now let me provide some additional considerations to assist with modeling. Based on current foreign exchange rates, we now expect full year reported revenue of approximately $4.35 billion. Given solid performance to date, we now expect full year core growth of approximately 4%, up from our prior expectation of 2% to 3%. In terms of the shape of the balance of the year, we expect Q3 reported revenue as a percent of total to be broadly in line with historical patterns, while Q4 will be a smaller than usual percentage due to there being four fewer selling days in the quarter versus prior year. As we mentioned last quarter, it will also drive about a $15 million to $20 million headwind to reported revenue and a 150 basis point headwind to core growth in Q4. We expect FX and M&A combined to be about a 50 basis point tailwind to reported revenue in each of Q3 and Q4. We are affecting Q3 adjusted EBITDA margins to be slightly below Q2 levels, driven by slightly lower revenue on an absolute basis and the impact of modest strategic growth investments. On a year-over-year basis, EBITDA margin trends will also be impacted by a more difficult Q3 OpEx comparable. We now expect a Q3 effective tax rate in the mid-teens and Q4 in the low double-digit range. And full year net interest expense of about $140 million. From a bottom line perspective, as we look forward to the balance of the year as has historically been the case, we expect adjusted EPS delivery to be weighted towards the fourth quarter with Q3 EPS up very slightly year-over-year, as we said last quarter, broadly consistent with what we saw in the first quarter of this year. As the balance of the year unfolds, and we continue to execute on our Fortive accelerated strategy, quarterly phasing may evolve. As a final note, before turning it back to Olumide for closing remarks and Q&A, our first half results reinforce our confidence in the Fortive Accelerated strategy and the financial framework we outlined at our last Investor Day, and we remain focused on delivering benchmark in returns for our shareholders. I'll now turn it back over to Olumide.

Thanks, Mark. Let me close with a few observations on the quarter and where we are headed. Q2 represented another strong quarter of performance. We delivered 6.7% core growth, approximately 12% adjusted EBITDA growth and 28% adjusted EPS growth. Our fourth consecutive quarter of delivering double-digit adjusted EPS growth and exceeding expectations. 1 year after our launch of new Fortive, we are generating momentum from our 4 accelerated strategy. And our confidence in the 2026, 2027 financial framework we outlined at our last Investor Day is fully intact. We are pleased with the progress we have made. We believe we are still in the early stages of realizing Fortive's full potential, and we are excited about the value-creation runway ahead of us. I want to thank our customers for placing their trust in us every day and all our 40 team members around the world for their commitment to our shared purpose of innovating essential technologies to keep our world safe and productive. With that, I'll turn it back to Christina to open the call for questions.

Thanks, Olumide. That concludes our prepared remarks. We are now ready for questions.

[Operator Instructions] Our first questions come from the line of Scott Davis with Melius Research.

I wanted to touch on two things. The first being new products and the second one being bolt-ons, but new products, is it something -- when you talk about NPIs and you think about the KPIs around that, that you guys look at internally, are new products having a tangible impact on top line growth or sometimes you see in price or are you seeing margins because it's -- you're selling something that's iterative. But is there a tangible sign at least that you think you're getting a return there?

Scott, thanks for the question. I think short answer is yes, absolutely. I mean, we've been really clear in our Fortive Accelerated strategy are the three factors that would drive this company to grow faster, first of those is innovation and new products, second commercial and this recurring cost on value, which means we do more for the 100,000 customers we have that trust us every day. And what we've seen really is from a product innovation point of view, all 10 of our brands have really been introducing products and have a funnel of new products that's deeper and richer than we had, and it's also more pointed at really high growth vectors. So the fact that we're growing 6.7% call this quarter in Q2, and we've been accelerating in the last four quarters. That certainly has had the fingerprints of those new products on it. We've talked about some examples of those [indiscernible] Fluke CertiFiber Max at ServiceChannel with some of the exciting AI enabled innovation. We've introduced for [ work order ] anomaly detection and conversational [ work order ] completion and other things. So the short answer is yes. And as you can imagine, knowing us well, we have extensive instrumentation on how we track the portfolio of new products and each individual product in terms of what we expect and what we're delivering, and we feel quite good about what we're getting out of them.

Okay. Fair enough. And then on the bolt-on side, are there -- I don't know what proper word to use here, it is my fourth call today, and my brain is starting to fry. But are there limitations meaning particular businesses that you would not want to bolt on to or areas that you have limited interest in expanding? Or are you looking at bolt-ons across the entire portfolio, software, not software healthcare health care. I mean just a sense kind of priorities there and where we might expect to see the lion's share of bolt-ons?

Yes. So I mean, we, first of all, have a much simpler portfolio. It's really quite interesting because if you think about the company today. Fluke is more than 40% of what we do. Business at ASP is a really big chunk of what we do. And then there's the rest of the company. So if you think about just the softest area we have to look for bolt-ons in, it certainly would skew towards our strongest platforms. I'll use Fluke as an example of those, and ASP is a good example as well. So while we don't exclude any area, we're generally building a funnel that's sort of looking at what's available and what strategically and financially interesting for each of our brands. You're going to see us skew towards strongest brands. On your point about software, I mentioned this, I think, a few calls ago, we like the software brands we have because of the attributes they have around proprietary data and regulatory lock-in and two-sided networks. And so if we're looking to bolt-on anything, that thing has to have those attributes to light as well. It has to be at a financial proposition that fits a criteria in terms of returns. So software bolt-ons are possible, but it's a very narrow path to find something that was in is affordable. So that's the way we think about it. We build a funnel, but I think if you think about what's going to come out as executed deals, you see them skewed towards our biggest brands where we're strongest and probably less towards software and more towards differentiated hardware businesses.

Our next questions come from the line of Nigel Coe with Wolfe Redarch.

I know that Christina will do the great job of kind of like sending an e-mail with all the modeling items. Just wanted to clarify, your comments on 3Q, Mark, do we have revenues and margin down modestly sequentially. I think that will be normal seasonality. Just wanted to clarify that. And then it seems like there's some moving pieces on the tax between 3Q and 4Q. I think you said high teens in 3Q is now mid-teens and 4Q looks to be a bit higher. Are we still on the path for a mid-teens tax rate for the full year?

I think you've got it entirely right. So I think normal seasonality, as we said, Q3 revenue would track in normal path, and that would be a sequential step down along with the commentary we made on adjusted EBITDA margins. And then absolutely right on the tax rate, we are continuing to expect something in the mid-teens on a full year basis and again, mid-teens in Q3 and low double digits in the fourth quarter.

Okay. That's great, Mark. I just want to do that. And then just maybe just elaborate a little bit more on mix headwinds that you called out, especially within ASP. Just wanted to understand, how persistent that is? And then just kind of beyond that, maybe just talk about memory chip inflation. I think you might have touched on this last quarter. Is that weighing on conversion rates in the back half of the year to any degree.

Sure. Happy to take both of those. So gross margin, yes, again, mix shift was a big driver in both segments, specifically in AHS, as you called out, we saw mix shift driven in part by just resumed growth in our -- in the capital part of ASP. They also made some strategic investments against some larger accounts that also impacted gross margins in the quarter. And again, overall, just as a reminder, make shift is predominantly impacting gross margins in iOS as a result of strength and high growth in one of our lower-margin products -- strategic product in ServiceChannel, particularly. With respect to inflation generally and memory chips, I'd say FBS is incredibly good at offsetting these, and we certainly had price cost was positive for us in the quarter. On the margin, there are projects that the teams are working on to make sure that we have multiple sources for things as some things like rare earth and memory chips become harder to come by. It's not a material factor that you would notice in our results at this point in terms of converting orders and backlog to revenue, but it is something that we're actively working to countermeasure.

Our next questions come from the line of Deane Dray with RBC Capital Markets.

Olumide, I really was interested in your prepared remarks today where you walk through all of the different new AI products in your software offerings. And this is as far as we're concerned, really important proof points on the AI as an asset, not a threat debate. And could you just step back and kind of give us a sense of where is Fortive in the rollout of these AI features? Is there any way that you can size the event that you've made and then even probably harder how you measure enhanced functionality and benefits and so forth. But just further color on this would be really important to hear.

Yes, Deane, thanks for the question. So just maybe the context on this is for us. We started with an AI center of excellence 7 years ago before generative AI made it more fashionable. And so we, at some level for industrial health care technology company, we've been ahead of the curve quite a bit with some of the top companies as partners over several years. So that really gives us a head start. And what we've done across 6 software brands is we've been able to very quickly figure out the best use cases for AI, like real use cases that deliver measurable returns for customers, i.e., we save them millions of dollars. We help them improve output in measurable ways. And our teams have done a terrific job of really deploying us very quickly across our brands. And we've talked about some examples of those. I'll say to you that it's been -- it's been really terrific to see the adoption of those. We refer to the eMaint example in the prepared remarks this time. But every single month, we have another one of those AI-enabled stories on our software platforms that I agree. So we're well into it at this point. We're seeing customers adopting it. We're capturing value in terms of returns to your point in multiple ways. In some cases, it's an explicit additional sale that a customer pays for. And in some cases, those are outcome-based. In some cases, it's a pass-through of taking cost plus a markup. In some cases, it helps our overall NDR on the account and just deepens our presence with the customer. As you can imagine, with FPS, we've got deep instrumentation, and how we track the returns on each of this. The investment level has not been significant for us, again, because it wasn't a new initiative for us. We've had this COE for a long time. We've been able to scale it by adding capacity in India and making sure that the partnerships we had give us good pricing in terms of any any additional tools that we were using. So overall, it's been a great story for us. The fact that our software business has continued to do really well, is not exactly separate from how well we've been able to leverage AI. We feel good about the setup.

Great. And then just as a follow-up, and I'll keep this one a bit more direct. Can you give us an update on Fluke. We're always interested in the sell-in versus sell-through inventory in the channel, so forth. Whatever you can share there is helpful.

Yes. Thanks, Deane. And Fluke is a big part of what we do. I mean if you look at another just terrific quarter in terms of performance. And it was broad-based strength really across product lines and across both volume and price, which was great to see. So we're gaining share, we're capturing price. From a regional perspective, North America remained our strongest growth driver. With strong POS in terms of sell-through. We've talked about that in several quarters, and the strength continues Europe was affected by some of the macroeconomic uncertainty. But really it was more a China customers that deferred purchases. If you look at the POS in Europe, it was actually the best we have seen in 6 quarters. So it really was a China flat, which is from an inventory point of view because we're leaving the quarter with a much better inventory channel inventory position. APAC and Latin America both posted really solid growth at Fluke and really partially reflecting the increased commercial investments that we've referenced that we've been making in these regions for the last few quarters as part of our Fortive Accelerated strategy. And orders grew modestly faster than revenues like we referenced. So book-to-bill was nicely above 1. And we just -- we feel really good about the setup, but Fluke [Audio gap] team continues to drive just a terrific innovation funnel. We continue to have probably the best commercial intensity whatever had in that business with a full consumer behind good because like data center and defense and early in career professionals that now to be tooled up and want time to start with Fluke and stay with Fluke all through their career. So we really like the performance trajectory and set up for Fluke, which again is well over 40% of our entire company. So we're like that.

Our next question is come from the line of Andy Kaplowitz with Citi.

Olumide or Mark, AHS growth continued to be solid in Q2, but maybe you could talk about what's going on between consumables, where growth seems to be strong and where you said growth has been maybe a little more modest. Are you still being slowed down at all by tight hospital CapEx budgets? Are they starting to get better? What's the outlook there?

Yes. Thanks for the question. We're really happy with what we saw in the AHS segment overall, frankly, in ASP, especially. And we really see it as an opportunity to reach environment as we dig more into those businesses. They're just a lot of exciting initiatives that can deliver sustainable growth, profitable growth for years to come. So we really like what we're seeing there. In terms of Q2, the strength was broad-based. To your point, in ASP, the consumables and services business grew in every major region with particular strength in APAC and Latin America, which is great to see. But every region grew our consumable and services. To your point on the capital business, we've talked about the hospital budget pressure now for several pressures. There's still some of that, but it's continued to improve. And that capital business returned to growth this quarter, which was great to see, and the commercial pipeline remains strong and very healthy. I think the south parts of the segment continue to deliver strong growth, led by probation and our SaaS sales in North America. So it was a great quarter because the strength was really broad based and and across regions and components of what we do for customers.

Very helpful. And then I think last quarter, Olumide, you said that [indiscernible] growth was accretive to this segment. Is that still the case? And then I think you said ServiceChannel has led growth for [indiscernible], but could you clarify what seeing between ServiceChannel and Gordian and Accruent?

Yes. So again, great quarter for the file platform overall. It was led by ServiceChannel, which continues to benefit from robust demand in [ Fortive ] site Facility Management Solutions and marketplace software. But every part of the FDL portfolio performed really well. Gordian, for example, had a solid quarter. As you know, Q2 is a part 1 for them for some of the state and local government at year-end. It was a solid quarter for Gordian like that. And Accurent continues on its improvement in trajectory as well, which led us to an outcome where fall delivered really strong growth as did every other piece of the iOS segment. Frankly, we've talked about Fluke and gas detection piece as well. So a good quarter for our team.