Fortive Corporation: Management Meetings: Confidence on OSG acceleration amidst greater focus on the top-line

Research evidence excerpt

Fortive Corporation: Management Meetings: Confidence on OSG acceleration amidst greater focus on the top-line

ement commented that Fluke is seeing strong growth from operational

execution and macro drivers such as datacenters, defense, and electrification (within FTV, Fluke

has the highest exposure to datacenters / defense).

Fluke is building many products to meet datacenter needs. For example, some new products

help hyperscalers conduct the necessary system / hardware checks for massive datacenters in a

more efficient / comprehensive way. FTV is also assembling a datacenter-focused sales

specialist team to help with demand generation. Management added that FTV sells straight to

several hyperscalers.

On the defense side of the portfolio, FTV has a suite of high-precision products, and it is

engineering new products especially on the calibration side. The company has also been

bulking up its (specialized) sales force for defense, in the U.S. and E.U.

AHS / ASP slowly recovering: AHS / ASP's sales growth is heavily driven by the capital

replacement cycles in hospitals, and was muted in 2025 due to pullbacks by hospitals (Q225

was the 'lowest point in the valley of restraint'); this was partially due to uncertainty caused by

workforce shortages, tariffs, the Big Beautiful Bill, etc.

Given that capital equipment purchases are relatively discretionary, FTV said that many

hospitals pulled back on those purchases in 2025.

Management believes the 'frost is breaking', however, and noted that ASP / AHS delivered

stronger results than it expected in Q126. While management thinks that this pent-up demand

is currently being released, it believes that normalization will take ~6 quarters (with each

quarter better than the last).

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