Fortive (FTV)

Griffin Whitney Vice President of Investor Relations
Jim Lico President & Chief Executive Officer
Chuck McLaughlin Senior Vice President & Chief Financial Officer
Steve Tusa JPMorgan
Jeff Sprague Vertical Research
Scott Davis Melius Research
Andrew Obin Bank of America
Nigel Coe Wolfe Research
Julian Mitchell Barclays
Markus Mittermaier UBS
Andy Kaplowitz Citigroup
Deane Dray RBC Capital Markets
Josh Pokrzywinski Morgan Stanley
Call transcript
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Good afternoon. My name is Pasha, and I'll be your conference facilitator this afternoon. At this time, I would like to welcome everyone to the Fortive Corporation's Second Quarter 2021 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. now turn would to call I Mr. Instructions] like the to over [Operator President Investor Whitney, of Griffin Vice Relations. Mr. may you Whitney, begin your conference.

Griffin Whitney

included available this relating Thank on SEC through of Technologies Industrial thank of present financial call. our you Vice call operations. President completed under and call. measures afternoon, certain Officer; and Vontier everyone, non-GAAP us on www.fortive.com, discontinued the our Chief Chief as Quarterly Regulation financial results website, continuing segment our President presented Good required to are are accordingly October spinoff Information separation the Senior McLaughlin, the our today are With Investors these you, Results. on today's The us results the Financial Investors Executive on of measures Lico, the segment on and section the and XXXX, G Corporation on Chuck heading, for non-GAAP the Technologies by based operations. Pasha. of joining prior Jim Industrial and X, We Officer. have We

will a certain During decreases we period-to-period financial or factors year-over-year All references describe year-over-year basis. presentation, of to increases significant the and are metrics that continuing the operations impacted on more performance.

for that number make to may update Jim. risks the the materially actual like anticipate date statements over made, is to or With Form we call, materially statements or forward-looking will that our from cause may the our filings, any the not including subject year These uncertainties, these a do assume XXXX. any might of statements of and obligation from regarding factors December call in today. speak actual I'd During available XX, to are forward-looking we are they statements statements XX-K future. differ results ended annual turn we forward-looking any and Information that SEC the report occur These the that results make forward-looking to statements. within as these will and securities developments forward-looking including of expect differ statements we laws, forward-looking in federal meaning regarding on or the events only that, to

Jim Lico

good results. with We very pleased Griffin, were and quarter second our everyone. afternoon, Thanks,

you Slide once our portfolio a enhanced benefits connected strategy X, As and on creating see highlighted customers, workflow resilience can the performance provide for again power. our long-term to our of earnings solutions differentiated with

the end conditions quarter, delivered our our earnings continued trends During cash larger exceeded operating end markets. capitalized number margins key growth growth that businesses, across driving conversion. guidance from we of and the across high this sale growth our Against flow backdrop, of profit improving and free of adjusted and offerings accelerating our on revenue we point a exceptional software core

improvement XX, SaaS low foundation across significant at capabilities and our to also we May quarter, needs double-digit our second transformation. Day highlighted our our their the expanding hardware services we drove ongoing we and positions on offerings. of address building accelerate and customers' digital workflow In Investor the professional offerings on our advantaged As are growth our delivered software critical

in among the post customers. delivery existing independent facility as access including and Gordian very hospital quarter and strong positioned well new on well SaaS are challenges executed access healthcare and quarters opportunities as Both Accruent in We sites. on to from Censis, priorities. both EMA and beverage, strong to and momentum to customer operators they focused see COVID customers continue owner also by increasing and companies food pharmaceutical customers to its provided its to the from as into verticals. work demand increasing network improved transformation for executing at had strong capitalize expansion digital demand on improvements performed demand return offerings

key our across with set, than XX% growth same the Deployment efficiency in apply continue ISC innovation be which to meet we Intelex requirements in FAI gains. portfolio campaign excited the the to the of generated time, and geographies. workflow the continue at we first are the portfolio, closed joint portfolio and EH innovation, our expanding the R&D and management long-term quarter, our accelerates significant largest performed [ph] based delivery, in solutions, second customers. the pre-pandemic positioned from progress At impact application well FBS optimization in sales about System of growth achieved growth investments sustainability the of portfolio. significantly increase on-time Looking analytics early Company its tool in generated tools to Solutions. drive to and the of Meanwhile, search, date its the of Fortive we and use program excited strong our where which markets Intelex across end accelerate across the digital share Health at across XX% with traffic FBS offering deal well, levels has marketing Throughout Business Fluke are of growth the digital EHR and greater to lean on a growth broad pipeline. strong capitalizing

XX the line and excellent to past Over months top continues performance. drive

marks differentiated still markets. an including streamline the integrated the significant created into progress Pioneer We proprietary service within first world. Square In The to in are of workflow innovative software early, workers. around TeamSense we communications Safety the labs facility of the spin and TeamSense needs July, transaction develop channel. with owners and brings to solutions to with our ability assets portfolio, meet business the high our accelerates of with the provider service a the solutions are momentum announced our of This have for very incubated a growth while we acquisition that network additional technologies pleased hourly business excited Square to to evolving in early the data enhancing early customers recent our good and core Productivity be portfolio Fortive provider Pioneer partnership with of integrated labs,

we of closing QX, free resilient generation. balance in expected will our capacity and the sheet have significant acquisition the by flow supported strong cash Following

across substantial $XX market to Investor runway As disciplined we highlighted strategy. served Day allocation our we our capital accelerate at see billion our for

by Europe quick $XXX and a exceeded margin X, earnings quarter high revenue XX.X% IIXXX the was advantage channel partners was line strong launch we the office generated, to XX.X%, at North driven total representing and included expectations to and product XX% of sale growth Fluke to our results of of strength across recent Adjusted approximately we tied segment. America, in initial America. across Fluke revenue core IOS mid-XX% of reliability, adjusted $X.XX, On highlighted Operating This through core growth given in XX.X% year-over-year revenue alignment generated both growth to Networks a Fluke closer adjusted North robust gaining margin, in sequential on gains accelerated XX.X% quarter. per core continues The quarter line, as broader modifications. growth year-over-year performance of grew efforts in revenue summary the IQ Industrial demand and in Solutions of well posted network Fluke’s continues of point of well our share in Western quarter Intelligent Slide increased XXX% Industrial. Turning key other both retail income. end also core the at its imaging revenue doubled while the China. cash demand of quarter. also the perform basis a the the and by conversion Europe growth also operating top acoustic our for exceed product Slide increasing improved as delivered for XX% range Fluke are of take see continue a PRUFTECHNIK as operating represented to in increase reopenings we low performed the of free to growth total as link across in counts the mid-XX% as flow, adjusted and Fluke very net low outperformance share which on Fluke by million a X, look line took services. second of growth accelerate which guidance. traction its we businesses, range. a mid-single Western digits

another EMAY strong [ph] also delivered While quarter.

by a record second in increasing growing enhanced their mid-single customers reporting ESG in grew launch Intelex lead programs with resilient multiple in continues bookings quarter. remained the to generated of some has business increasing and FBS strong XXX%. for strong sustainability and continued its due and on by low Also optimize Industrial platform meet as and conversion. to to revenue SaaS offering pace a grew management sales as to and its end generation improvements Mid-teens and in bookings. continues maintenance by by scheduling reporting double-digit execution demand logo did above wins with accelerated critical demand work and into connection by Fluke, the responsiveness. recurring driven second their CMS build Scientific metrics. growth the from set improving in Accruent Event mid-single With its rental increased digits at and see strategies. new rebounded help of its we quarter deals demand instruments customer and leverage Company's generate document The capitalize and also orders INET chain in engineering retention quarter workspace business business. closed company non-financial and supply single EMS, markets solidly funnel company's the Accruent offerings oil and on scale high backlog Intelex expansion The strong transparency for gas its and Intelex for solution markets. driven QX resource for its to return digits for digits new offering. the plan The execute net growth Meridian

business increased growth New customers. authority. a included driven key estimating. and in Accruent in for with construction to a Mid-teens performance its spend project Education the XX% generated of access June and of increased improved mid-single-digit Department delivered timelines accelerating month growth Importantly in across number and as growth improve. low the revenue which high-teens generated large projects procurement York procurement Gordian customer continue business Gordian City school by This record site service by professional by also for

of broader performance second manufacturing its segment Moving events to resilience quarter product with trends Slide at well, PacSci commercial XX.X% by very each mid-teens well performing growth Elsewhere X COVID the launches business low in growth good delays shipments second mainstream by the communications form market in the differentiated of for with demand across the mid continues separation posted the capsule demand test in process commercial progress related technology regions. in business accelerating of ensures by regional PacSci America, creation and increase gains in revenue the Negele Western booster included including it's the the alleviation controllers continues previous of again across and with its on growth were its innovation in innovation demand driving Anderson Shepard its introductions total in businesses quarter the the showed North to for of of rollout strong Tektronix teens. approximately growth providing scopes a EMC Tektronix resumption the paperless quarters. with major high for industry Technologies some recorder initiators. and approval XX% China. Tektronix solutions. new teens quarter low EMC seen Both automation across solutions in second make platform industrial led continue recovery. particularly performed that aimed portfolio, broader from approval the Tektronix space with low in of X, of its broad to growth quarter. quarter the strong to smart and focus service OneWeb increasing data stability half and company's elsewhere TechSo with July on Blue Precision which Environments reliable quarter another strong and increased of driven family by had This cetera semiconductor resulting software sale very mission to accelerated its and impacted XX% benefit applications. XX% China, dairy also customers. across year. driven the automated accelerated Europe the another for Sensing in Technologies the market continues XX% from its and funnel its of see demand its a expected IoT offerings. including hardware and New with Origin's drive product [ph] range factory Critical of in for maiden solution to point with safe solution of held grew shutdowns increased revenue share adoption its critical stimulated watch the transfer. of by we XX, high-speed QX In HVAC second of during Also voyage. company's continuation by recurring by Sensing Sensing growth low excited mid-teens market

China. Total Healthcare Europe Moving growth. grew and core Western North by including Solutions and elective XX.X% highlighted growth America, continue Europe rate ASP ASP Western by in improve. geographies high teens strong Advanced growth to This on revenue included high growth core single single-digit quarter, XX% high revenue in China the the the high North Slide in each digits America, by in realized to also ASP growth most in markets. of led X. US. single-digit Overall consumable as procedures increased across second improved of

that expect with approximately consistent expansion XX% global year-over-year the equipment attract growth flow a in sterilization from exit to business. of installed details QX pre-COVID Solutions pass rate sizable annualized digits, which strong services activity terminal sense as with a the margins, Chuck, volumes increased lapped which on benefited to a in over I'll rate. you additional expand lower volumes access customers came as which its also continue investments its FHS in allowing our offering vendors, in at will ASP professional than growth accelerated in X.X% a QX significant levels related normalize low-double high-teens through forward. from it increase even hospital delivery provide on bit SaaS in Fluke sheet. are networks. at XX mid-teens QX, additional the Sensus capital to to growth particularly in the who basis. the increased quarter, Health integrated at in revenue was expected continue last of now to consumable by which grew optimized base cash software balance as year, second With the XQA, well procedure tailwind range an solutions, some its installed COVID growth mid-XX% take tailwind to free volumes in procedure with the we going elective increased to prior base Our that, over and months. resulted Many in revenue

Chuck McLaughlin

of to their adjusted free the contributions contributed IOC, some same basis. points portfolio Landauer strong of driven At XXX as the from points everyone. solid good XXX X, margins increase profit can end conversion We reflected delivered of QX, margin $XXX On by the million operating another by quarter, on towards of the to the segments. a sales Thanks, us a fall points year-end was cost million. approximately net conversion margin XX.X%, that delivered end associated performance, also net including gross managing deploy generated capacity acquired core flow revenue a the Jim, IOS to additional through and months the our XXX We channel Adjusted representing markets. and Fluke XX allocation drive afternoon volume our of This margin the the as basis excluding guidance OMX through. of delivered the margin of we be Both expansion, points priorities. XXX% to across through of also strong price solid Free X.X were of cash and pieces accelerated but funding of M&A. around XX% performance at XXX XXX Tektronix our of operating including cash outperformance basis basis in net driven core on disciplined strong the stronger to outperformance. gives points we including expect primarily leverage basis over across reported to of up Slide $XXX our acquisition year-over-year at above margin Censis realization portfolio. continue trailing flow, Gordian, times and This capital high time income. key increased quarter operating expansion times outpatient you high demand second segment. XX.X%, see basis any we fall in core significant X is and FBS leverage our price across service QX adjusted Today,

to rest now year guidance. second our of once are our we and on Turning strong outlook given guidance in in raising X, the again performance the quarter the XXXX the improvement Slide the the for

tax in XX% margins an expect XXXX. diluted operating $X.XX, full XX.X%. total year XX% XX% to profit $X.XX a of the be XX.X% and earnings to to growth to effective For half to X.X% to continuing This representing share of we year-over-year XX.X% adjusted It revenue of the adjusted net assumes basis. XX%, XX.X% now operations growth of XX% of also on total revenue second per rate growth assumes of a to

conversion We cash net be continue the flow to year. income of adjusted to expect for free approximately full XXX%

of This adjusted We an XX% are to XX% net and growth adjusted year-over-year of third $X.XX, XX.X% margin assumes to XX.X% growth to profit XX.X%, tax diluted of representing revenue of XX.X%. operating share guidance effective initiating earnings per rate quarter XX%. to of XX.X% $X.XX to total

cash conversion of that For the expect closing With it back remarks. adjusted third quarter flow pass be approximately income. to Jim we free for XXX% net I'll to some

Jim Lico

Chuck. Thanks,

we efforts, and to Before on update want and Slide a on I our provide which XX. sustainability is questions, to diversity inclusion shown quick move

Investor here. emissions X and program of we reduction gas base introduced It's XX% our gas greenhouse an XX, to on reduction Day accelerated XXXX relative for now goal. Scope May intensity and During by targets our greenhouse X a Scope XXXX

greenhouse report, included SaaS in second XXXX-XXXX GRI also quarter, second which index Fortive annual issued the the profile. XXXX annual we our be sustainability emissions During gas first Index,

force task announced financial by we quarter and climate diversity and Global XXXX to a disclosure our became inclusion UN the goals. XXXX signatory with aspirational alignment to also committed the the During Compact related

in and accelerating diversity committed first the of address offerings segments, and support our strides flow over attractive growth the free on years. the our first are of with we benefits your to established our and sustainability this and with the half three all the our five building Across make I'd cash our needs in team the our our stakeholders also progress expanding focus continue take journey will year to the inclusion as significant our earnings and in of strong strategic independent in long-term like to of portfolio. We of company. coming demonstrated to positions drivers, our all markets an in strategic clearly work thank momentum performance strong customers the opportunity highly for of years critical

continue As look that, will significant to capabilities innovation consistent will positioned and System double-digit inorganic come. value Business years that are the as to the operating key increase and to With we improvements ahead, cash we we customers. turn growth free initiatives in and the With earnings to the of organic it invest to to our offer and free M&A flow well expanding strong and we flow capacity, I'll we Fortive drive Griffin. growth back cash the accelerate pursue

Griffin Whitney

concludes we're Pasha, Jim. comments. ready That questions. our now for formal Thanks,


[Operator question is Tusa Steve JPMorgan. with of line the Instructions] Our first from

Steve Tusa

are guys, doing? Good afternoon. how you Hey

Jim Lico


Steve Tusa

Just a question on the AHS margin.

and looking rounding on of of high the the way going I beyond at right to the implied. quarter end itself? of mid at of range maybe kind there, that into what's 'XXs Am the kind kind shows strength of think I a 'XXs. ended into the what's kind source high the but like fourth margins the some kind that that of quarter, guidance just backing fourth And then even of are

Jim Lico

to zone. move above we a it see is mid but I in to really drives you is time, pushing up. seasonally, as I right 'XXs see acceleration things better, as right starting put health get XX% pushing think at XX% level surgeries revenue and that's more we're quarter the our also revenue through the we'll and good there you're the fourth those two together in Thanks, margins What's is elective and the the segment Steve. what think calculating That's question that

Steve Tusa

highly that I or that that than way point a seasonality think jumping-off is it like, like bit read just So can seasonality stage. there unusual or rest. mean, some any acute is quarter is fourth is the year, at next stronger as about is a the so why reason into maybe a of we a

Jim Lico

do OP think year. the that from I jumping-off I just but is to every don't where is think in point, be of terms going

stronger don't about four. basis You going anomalous by we year and quarter of of expect that points QX multiplied quarters I the of think anything have half wouldn't forward, should going there that take the back hundred I the a but fourth I and to couple up this the in by be each think,

to go back going QX this we're posted to hundred growth of think we on in a points I year. what QX basis couple and of

Chuck McLaughlin

that, going jumping-off and Steve, exit have saying just to that would rate just that every for add sort not is the a year, level. I add would but point to like quarter, an we it be which that good margins next last be XX% of rate the take was to

effect seeing think well. to the The coming of full doing said of that the work, to work all we're drive up year the full-year as same and you're thing, FBS to Chuck margins that FBS effect think I the consumable business, revenue continue of it's, the integrate a I full as it's the work. combination

and a ASP. that is obviously in a trajectory part now overall businesses right of the big good So is

Steve Tusa

Right, on like it of you that company. and the costs have temporary those ultimately back, quarter stuff then of mean, And margin the a you some that that that makes thinking we kind the this of one lot ultimately range cost follow-up of total see through. I million for of think guys I just some year-over-year. investments come were Did $XX come did didn't hit sense.

Jim Lico

million was in QX, another did for in plus for snapback $XX that then up investments there show and had cost. things we did the sure. did $XX there two of on did We We that million year-over-year, QX is going we

Steve Tusa


can back is of on kind of I incremental core a into that a don't to the core XX% like mean right kind know something math? XX% that's of So incremental. EBIT like, I like I

Jim Lico

is. it Well,

we year to incremental for 'XXs about are incremental in the be the XX% margins yes stronger year QX than over but mid going range. is XX% So talked gross with straight our that

math. yes, have we've talking flow going every would XX% forward. the been for is about second the right through we wouldn't I at quarter in the second expect, this, expect rating So, we as that that half, half, that

Steve Tusa

you. Yes. Right. Got


from Your Jeff of is Vertical line next Sprague with the question Research.

Jeff Sprague

thanks, couple it Hey know and or a bit good follow Hey, to of the afternoon, you businesses. everyone. But down Jim of you break the I inventories. any little sales, the, on we're and comments have observing going POS with a then here color on in up the Fluke just kind what's quarter trailing on or outpacing Chuck TOS and you if of if channel could have wonder

is the channels this and of what demand a good As or caught anyway indication pretty is? for up

Jim Lico

saw revenue the with that and quarter you're one point the asking. saw in Jeff of is particularly beat they strength obviously accelerated of things through an as the the important we We target sales

the through good You're improve to to continue we POS saw exactly quarter. right,

quarter sales the both in Obviously, it of saw sales will saw the improve. little an Fluke our cases. continue Tek in as and by an range, total to in we the better in POS our than even in some comp bit XX% Americas, think we so at I easier in example at

where certainly inventories aren't, buying, making not world, making seeing So doing, that new we're position, given metric at we sure that accelerated the situation sure good. of look to discussions leading are look continue also very seeing we obviously on also of at a seeing you good point understand we're things but were sort using we're chain we're not or orders not. a sale, be supply around to hand only And not we we're

a up and certainly took and it guide we don't both performing we're place an think Tek building data. will well the we're certainly from and be excess Europe any I position. a best we're prudently like US situation place good in feel are revenue of in in We inventory hence, inventory. and Fluke the So good the We're

Jeff Sprague

the wonder on are discuss, if of pursue. you to what's going moment I on some in in a take could you particular new verticals in And trying just

the that's Tek think be important see an just I not you of rebound. to the in kind part up growth sure making going time, to want of over cyclical puts

that you have push color sales some tech maybe are where those of percent are see what of we on on now some and So new how these these progressing? verticals,

Jim Lico

I this data is seeing continue as again, said the that we time have particular think are centers to because in verticals increase. first two quarter we're feeling we commentary and automotive

I percentage the same, up Keithley we obviously coming think places in continue The the like see about on they are because a in basis, simply revenues and to revenue. semiconductor. revenue total still

So into think bring new as offering in users total the tech together but sales, the up. also a needle more is software move And of verticals is is think a really which also as the percent of we've well. scopes of scope accelerated of we don't I sort and a mentioned helps connect multiple I necessarily and data basis remarks, on in dollars terms channels as total multiple advent we're certainly prepared

those for think greater seen futures. the a should it strategic that over to we've demand seen time don't your percent question just answer think specifically, verticals bode the well in have and sales but of I sales, in we So, substantially I necessarily difference

Jeff Sprague

Great. I appreciate the color.


line Scott Davis question of from Research. next Your with is Melius the

Scott Davis

year still increases, Hi, couple mean bps accelerating bit the your are say I operating with that. it good another getting I price mean on is afternoon/evening cost of that But first price through to Or here. is, here. everyone. XXX up line is you're catching of on leverage, you up little in obviously way kind of but things mean, I to a all,

Jim Lico

Yes, we're in a great price shape cost, Scott. on

bps second in number in the that hardware XXX businesses the as in the you quarter we'll all, in of double First said particular half.

know good gotten position So we're price year. relative over good in the a we've to you as very price,

So a compounding this is effect.

quarter. read price this the through well second the margin on saw improvement You as gross in

and seeing we're relative for to very net little a are to reductions cost in though of really still material the bit significantly feel even good we cost inflation, year. So shape we good frankly, a quite going be net,

though shape job Even to only a reductions a the cost cost, still we seen the a not inflation of typical, material because very also in are be year. but done we've price good nice bit profit well. more still price So, as will relative for side a we've reduction on than little improver because cost

Scott Davis

going following-up you're that's the little Jeff's I is you've vehicle on have same oscilloscope nitty-gritty on-tech channel this it to or products? but or just with helpful. or it and electric trying standardize then Okay, do mean changing kind the creating modified the new facility they that product just are problems to meaning markets overall, in question exact product And that or solve perhaps super center on different of different entering a new data

Jim Lico

I would then is X Xth is application there there's or might say, different there the a oscilloscope be have. solution really around they the set to on also same that of balance that's set probes vertical Yes, of a might specific series software but a and challenges the that base through the that series ultimately

places. an in a As example, of vehicles a is a big power problem in in variety usage huge centers. data and issue It's electric

consumption So some it be power as might be of do applications might aspects troubleshooting different challenge, a to well. trying particular

specific. with very go of oscilloscope suite a that that is that software much typically and is there vertical So probes

Scott Davis

Thank Encouraging. you. Okay. guys. Good luck,


from line the question is of with Andrew America. Bank of Obin next Your

Andrew Obin

continue like from COVID? the bounce this more Yes, to good How versus about in durable, do tech. year I broad-based I'll sort just sound Tektronix. guess demand does you back questions think afternoon. ask of demand It very

Jim Lico

While aspect the at certainly back of an COVID. bounce

couple the wouldn't over I or take has away form you look at any business growth way, that, years. the an when been think from here last I accelerated rate shape we're but of historically, So, at where in

rate had and that a good the we services mentioning growth this year So certainly recognized verticals. around good to things durable quarter. doing in were the sense, it's about good some overall a I feel the We're think new good, sense to in strategic of we think just work services, we add

that position how less to towards got and the rate, think have to and over relative and the So time. less team growth work the very I that do good and volatile business more make strategy continue cyclical to durable secular and mantra really is in we're the we'll a really drivers

Andrew Obin

follow-up. my And

think and businesses. to the thoughts site a implications in deals now So access you're SaaS trying to access for for get should the on-boarding new professional the but services able improving if logos and how Site hurdle we about clients. new sense your was uptick close just around

Jim Lico

we'd we still were where like be. not to Yes,

to, So, in confident recent will sort over last and the second the in businesses going services we to growth half. is even think news in hours double-digit our professional feel SaaS have XX the obviously look into. I how But of we

an We're all see Talk customers to little accelerated that So insight remarks, we the a prepared rate. here make to really software decisions see the about improvement starting almost in at continued access. start businesses.

remote services I customers that's So yes, accept to getting in you'd say just think not better also on second we're half, to a relative and services. services, place much the site it's

the as So good it's site a combination of customer remotely more as able has done be work. things team to well to The deliver access.

Andrew Obin

so much. Thanks


Research. Your next Nigel question with line of is Coe Wolfe the from

Nigel Coe

afternoon. good evening, Good

of if pretty this point. that knowledge sure sort not on Jeff's empty address the channels best question, the I'm [indiscernible] just, level of question your at the to you of lot obviously and is absolute So actually

sense on but during constraints sounds core and top your then a on like supply the other kind supply any ability given quarter. the just of of out kind and where and Tek dumb date So, that question, are the to we of did challenges put for Fluke chain products

Jim Lico

first place of good I so Yes, think we're in all, and channel a inventories.

delivered an raising definitely some quarter. we days we're well, backdrop, the the at in increase the to both channel least full I in the over through channel next delivering in cases revenue and we for we you'd the the delivered that in in seeing we back nor an year, increase that demand quarter Plus, see have seeing revenue XX against the would say, think what POS better numbers, inventory given the the in seeing. in numbers inventories guide we're not relative

in think about we user the oversaturation situation. So some about end I building we're sort inventory fact and of feel over not demand good feel we that good

we're to real constraints, those or for So the relative not I pretty much companies supply we're it. like the we've is out seen Nigel, think world other and way, in fulfilling and shape any come sure. chain all there oblivious in I there form our demand in think peers

and to ability capability where and continue challenges see would those the daily lean those through every that the manufacturing to decades tools secure our success our every But in FBS the relative we're to expect means day demonstration revenue the to fighting over beat I at our think way. our things building to probably challenges, the would I those great to been respond see that businesses, second least. we've problem fact management day we of like say, in to solving is quarter I in ability we're a also material year and good

given So within successful. and far, a work been build decades successful. but we're our I done I in I to continue Thus chances but kind like the think our to is daily very the capability over it we've guess battle, be a, of factories. we've

Nigel Coe

Right. in XQ. contribution relative to high guiding then ASP carry and ASP XX% XQ, And mix normal of you're there in unquote segment. ASP, Is represent quarter later for a margin quickly back the margins go does to then that average wanted I the to [ph] mix quote margin that simply that the that that does

Jim Lico

question. the for Thanks Nigel.

have that's going been as We're year this than TSAs you're over really but out we looking our we a put comparison lighter guide at off of the and high the last think, I margins, I things there. AHS it's, to starting So And what last think at to QX we building expected. supply on is year. weren't there on coming for end incrementally One, so chain our more time, couple cost. of in

again, there along bit to expected last think had we margins double right we're going that basis where headwind a even that us is go repeat that with to see a there the off is come from QX, expanding that as and a that QX to maybe QX you revenue But inflated one-timers margins little OP. that us transition we're to doesn't to digit, than related to year-over-year more forward, And that. we when obviously the driving margins year going little Also just a so So TSAs. freight I then points start the well, that year again more XXX QX higher to still this bit on with be gives but QX. we're back it; in

and So consumables yes very that as have the consistent that helps story margin expansion high margin really so sure. part for that of recovery is


next is Barclays. Your of with line the Mitchell Julian question from

Julian Mitchell

but the to for margins discussed been this first revenue of year, on side fair afternoon. AHS wanted you as growth the touch kept said. a around margins, just you AHS question the have the a amount, And Hi, core for things, good down maybe end just took the of high guide

driving good So as that the how us of maybe understand about revenue feel state ASP. businesses what's and you help such overall reduction

In market of terms business? winning their of of fair their share share and sort

Jim Lico

Julian, Yes, think I second the first. one

the base base. I to very is were of equipment another We're had row in quarter good increases a relative place in think X.X% in installed year-on-year. equipment quarters X, a several We installed X placements. up good after continued

relative we very feel to base. the about good stand we So where installed

year. growth of see part saying little year, we the think actually the part a if anticipated. of And revenue coming in the remaining of really procedures we growth ASP you bit look elective through think through down half of I year. remaining will what accelerate for did a we're the the than the second bit I but consistent little

maybe around quarter said around we would we the we thought XX. We end ended As XX.

elective a and end would electric to the the consistent assumption think just describing and we've through guide little the we so what think seen there's come if very fact impact, an might where recently to get strong was come here to a you bit up associated bit and that XXX% maybe back, the but of part we're back little has more see AHS little be more year of ASP. we trying come as that improvement, with to took margin the there's little but I an a a bit but through that procedures the relative a share think Obviously, change. of things said, we little and procedures certainly for taking by I to total overall a in probably like just will bit So the of year remaining we're little a bit bit, we relative of increases at continued Chuck conservative in up company, not

Sorry for all the acronyms.

Julian Mitchell

in your China, just quarter. Thank to XX% And second close in from on mid-teens you for went of QX the growth that. to sort

Tektronix good wise there have months in a the in you're presence consistent recent lot in are but short How sort in you pretty of other the half specifically? and very looking about China when there. both the Fluke at growth a So China, cycle with thinking of second indicators

Jim Lico

think Yes, I very good.

grow well year. so, think we a continue in year example, ago about review we is two to all think did look I to I an here little second as be answer a be the bit Fluke the the and good part the a here of I feel China at going China comps a play very The as to quick. of the but stack, and particularly and Tek. a days with at few half, remaining role through

growth something as good good positions feel that year China think maintain XXXX full we've into market continue like and So rates we we can got I in good that well. really or mid-teens for the to we as get and

Julian Mitchell

Great, thank you.


And of your next with question line Mittermaier Markus UBS. is from the

Markus Mittermaier

very half, in double top. the pricing, Hi, have, quick the XXX part be to on good clear, guy points the you that on the asset you said second just evening, it to follow-up basis also targeted the of that

Jim Lico

was Markus, sort really with that [ph] Tech associated Tech, our particularly hardware the is of Fluke number. that businesses, in points in particular hundred Sensing basis and I some

XXX to second of up half. about the thus quarter, price overall sort for comparison or where a me, really really excuse been of about far probably incorporating all I our our pricing is think points that's to from of basis closer that's, or up cost, from we've in XX the first relative where everything overall probably So XX Fortive

to really address price the So, cost XXX is the question.

so, And is bit than a little overall but the pricing that. less

Chuck McLaughlin

have we historic set to And guidance.

Jim Lico

guidance. Yes, and that's the Yes, built thanks. into

Markus Mittermaier

doesn't it elasticity, you like then but makes that it? any sense, follow-up if issues see but price sound No, on Okay. the because

Jim Lico

Go ahead.

Markus Mittermaier

question the service channel. And then, the balance just our sheet, second of

you about are second priorities said new business for various Now, I thinking change few think hit is the that's matters year. sort I of half of in a know relative the here their any size any priorities. between the ago, of months

Jim Lico

the in No, good remains be very deals think good prepared those in opportunities if other in and we shape remarks, sheet it's, the when balance as said we'll to do available. I very become shape

to continue get on focused obviously, sure returns. going be So we financial to strong making we're good

that XX% example accretive ROIC good I deal both years. of is a but think five in service also channel months, a in with XX

there's So available those the in of think situations half. I second to us lots kinds of

you think so, to if financially, an as get I to available. but the well capability if done, deal opportunity we going both know have capacity off the a never becomes you're And pull deal another as

So it's and are those we we have predict confident hard we busy but a what to put, we If that could we happens, done. And the could opportunity. deal things. feel get

Markus Mittermaier

Thank you much. very


Andy of Citigroup. with Kaplowitz line the from is question next The

Andy Kaplowitz

that and key you accelerating within But on the projects lately. clients Gordian there return a just work So bigger bit of still focusing is mentioned to with did you the work in on Gordian. especially of picture again of varying pace terms noise Accruent mention

additional that you budgets you visibility continuing businesses better you give we've the accelerate giving and into an within growth boost? can improvement to and and seen in does state So local stimulus

Jim Lico

of in So all, little between see first What Gordian is, projects. there the quarter. little and good fiscal budget June year clearing mentioned was a had what's already, the we're end and bit and think bit a this we did and very of you're seeing at a of stimulus I we

confident; we'll feel year for good Gordian a sure. at I we a think good have

solutions. job event office. the are sort fact who on for in know seeing, seeing contracting to think leads the think even as We're I estimating facility we're mentioned the We assessments. about you forward, is, said, remarks, see So as prepared people hoteling back, Gordian planning the you're order as and only is looking the people come and in think not of of those starting projects good current way but work look I to start side, solution business we back to and hoteling the our we

before because part the come see the where in really So we those we, get We those clients services and we projects like SaaS situations. help accelerate. started. in That's the first professional saw lot we we see in of go of a revenue, current the that where

to think a really services in this So, us to believe question not year, in double here number I being business I where think. of I we're previous into sort seeing but those and going is will obviously be helpful half continue. up that real professional places We as only said of opportunity for real second And the building digits next that year.

Andy Kaplowitz

oil recovery this rebound It's relatively energy more for what a helpful and related forward see see of and industrial like and guys do a rebound that point significant going to starting you a comparisons business. markets mentioned you Jim. nice in that in And you is end seems the at gas then markets are function easy

Jim Lico

up, oil to there people rental at work oil to revenue Yes, and instrument I half Building and in the with markets they've see outside and business into gas aspect and which we to same of different consistent coming think really coming last in I the end back and the in quarters. number is gas I starting one excited the that continued markets think around customers. those to over about work success saw the and time of in But sort some is the business was, I the of would projects they see revenue into back are comp come easy we're year think things the ISC move new been improvement. the some doing I quarter. say a we really

think we continues of year. through that remaining So the to the part accelerate

Andy Kaplowitz

Thanks, Jim. it. Appreciate


is Your next Dray Markets. line RBC the question of Deane Capital from with

Deane Dray

Hey, good afternoon, everyone.

Jim Lico

are Deane. How Hi, you?

Deane Dray

balance second plan a quarter just the growth think I well. what's of updated. Pioneer that the Square $XX real and we also. [ph] get Doing in called investments, the Can and part and it. early start Thanks. call, out There million into was the in Labs $XX Is a these would these investments that four million And going for you plan of investment. you

Jim Lico

that have out we'd we Deane, called million. So, $XX

$XX QX QX did about QX. think then You're off we and million each you and QX invest in we $XX in which million had kick of and correct, in

Chuck McLaughlin

And then relative to maybe what saw. we

think now Fluke The we are IIXXX Fluke off. months examples we really I'd investments I just of couple other Those the out at at that examples, call Health. called there's XX XQA in both the that and paying the on in ago a that of call. thing did are

how the TeamSense and we and to ago. development early example about in the four good and a at we that about spin part those in excited that it it's accelerate operating some call, [ph] Square that's into year payback good growth roughly here that hey, half did $X.XX to accelerated the would a of million we to investment a of in think investments a be and July. of, $XX really business, companies of as QX we're seeing product I So we said example PSL or that labs of money spin work. or half continue out greater and got that the for back, work to $XX good opportunity That's mentioned in and we the the as the quarter of like those we a and Relative that Pioneer we're then about that that build of give for is half was which about growth that, we or in the investments $XXX to have we really two but a which out out in get more relative be we're granularity million will years three XX all probably that that that's follow. thought and true. return of we the the the to going believe of and product years we we're and work quarter, to ideas build hopefully numbers excited planning opportunity, the to And said some bring still as payback us XX it obviously for the year Probably forward lines to really just done next fund is

Deane Dray

the spin what to there are that's pipeline TeamSense the in about question brought Fortive? be in the Got it. ready and how nice second conditions And more are start-up With work. into a that lead do what is the for into

Jim Lico


for experience we if milestones. Labs regard. and it's do time. a Then business has solidify example business Prior members strategically, there out a three are to assess perspective one make goals number their here from the be in spun if go sort two to criteria, and to its they're we where really how those where a are Fortive we certain to particular would based think metrics, business others the in how situations of bringing to external what we of that an set PSL of that we'll that investment our we team for the has of go that helpful of on decisions the whether and have us, with we and sort members businesses period funding, actually those spin is strategically team is good we ready some decision So have through each own doing we make of from they product forward. if that's the were achieve the they're Pioneer start customers, that those strategically we decision and up Right around there Square Board based good fund we now, obviously to of and we have a is then in have that customers to individual advocates might go opportunity. our really funding to we what potential then the from team trying product end one the external sense they spun the a get accomplish with an situation maybe we're generally wouldn't and made

I we're think partnership partnership the great these ideas about team things. couple we're really I make doubt, fund sure think it's good the we've talk months good them, organizationally to it's I really celebrating senior continue XX as some of been as of ago experience. So also and just ideas footing. several a where bringing but great in PSL place here got without think and of And a to We of and weeks there I was held we've And they with the we'll think, in well. which bring killing fund a process very ideas from a to

Deane Dray

helpful. Thank really you. That's


line next Stanley. Your the Josh from Pokrzywinski question of is with Morgan

Josh Pokrzywinski

Excellent. guys. evening good Hi,

mix a So stable seasonal. I guess businesses. some of Jim, And the have cyclical you more

but do of and how the bottom kind kind maybe constant the sounds those growth, sequential to of still XQ progression, procedures still as you off much Obviously, the where maybe for, is on ASP that we're lot It where comps still we room an there should the elective ignores guess, progress think here, show there's like maybe given of but So but of as eye anything those still lifting is sort we keep relative one or didn't off I sequential maybe bottom. it's coming comps. seasonality. hope, else

Jim Lico

last obviously accelerating you'd a I basis. an They're And what think year through as as Tek two-year and think consider example, example I to got with Yes, on you've year. an see the COVID with of that. Fluke happened

getting we over is still think businesses what I two-year implied the have So sense that in will basis. guide better in those

same boat. may that I good we So it think feel be in Sensing,

think some you And here number still as ASP, see we'll better. good we little see progress a mentioned see bit I a in So we get of places.

is recurring [ph] SaaS on XX% with revenue. Our business value

and the have, mostly obviously end well our full to call continuing year. that large we exceptionally to XXXX ARR of continues double-digit ARR a build part have to the portfolio do that will growth well did for portfolio the continue SaaS the at out, grow the well but is have that in of we the We that through year businesses

still accelerating and some what more them the you're back. I I we're had come have little with seen think of those think have see been to progression good starting think the businesses we've margin revenue we've what businesses with cyclicality, I that seen room So, some is as that a bit business stable and the

Josh Pokrzywinski

anything that function channel that where And else, look more of this years, sort it that Accruent the in of externally you adds we now be couple on strength a last the and shift of a should of it. either deal seems Got like for have weather even I we Gordian announced. already think out gosh lot the of just more hey, and then, service ways before over a sticks else to on or that but maybe that Anything portfolio? something cold is

Jim Lico

Well, I think the [ph]. just is in ehsAI obvious one everything we're doing and

large to the to world I is important the world carbon companies understand I think footprint, cap. just mean, every they company about topic not and to for just becoming how around understand that, action an so now into sustainability is to are such in trying their and the positioned trying sustainability the work everywhere going we're I that's world. those out it's massive well better given hard around [ph] with call been sustainability just work ehsAI think just and in Intelex, anything than effort of amount trends,

We have think an we I every that's think that certainly we it ago we I even driver was quarter opportunity? a So we a business. bigger good secular that when Intellect. years own knew few realize bought into But

Josh Pokrzywinski

lot. Yes, with that. a carry Thanks


of [indiscernible]. the is question next Your line from

Unidentified Analyst

After back folks. second. very XX,XXX afternoon Good questions, I a want all get wonderful for feet good to this up to

I that You've talk what's can you but principles and little talked me what bit years have And couple models last of about rules lean. really culture has a experience those lean the SaaS the into then important quick taught from lean behaviors and -- are don't follow-up? about the you it's COVID and change, about your a of with

Jim Lico

things a supply have the thought been I some kaizen do done. of at solving Cliff, events chain cases virtually. could have resources the daily continue things never of maintained with still virtualize we've just to ability thought many we our management I of to some cases that Well, describing that in think incredible. and done of I have was It's certainly some could level that And I wouldn't events today. those the lot them team's certainly quality would collaborate problem we have we're our in doing

SaaS value is but development, value stream that of those of winning of anyone. a no sometimes learning solving Problem solving, improvement great other is certainly processes to success, and these think tools a things, that has than are here seen Every think So in that customer, in over things be in culture the fundamentally a virtualized. of team business virtualized mapping. we've sometimes we inefficient great I example do my the that's SaaS problem think probably business And any processes think, you can customer product culture. I find a than to mapping our a be terms all our stream own sometimes I everything that I really can different FBS Relative a business improved. is know and this year, on SaaS, is so year efforts regard. last some of there's you better half that I couple think continuous kudos And

we're are in seeing we're show think Investor of that's trying out certainly really that where what to I those Day is many our obviously, So examples and so things far. playing thus

Unidentified Analyst

pushes basis apply I lean these and product of business, we've How when took came trying you accounting another you same and said, your and and transactional and to divisions of development lean said putting the got Fortive, to, the transactional principles about lean over was how it processes, you to got haven't the when original accounting. hand [ph] taking you look, kind can new the great in traditional lean 'XXs and held add about and feel where to processes, all you 'XXs in my accounting principles XXX as I into do progress opposed points SI/NOP for a I

Jim Lico

capital lot a DSO and mean significantly business same we that the negative mapping we value just the I already into impacted made. that applied business stream away a working it's of and was current stuff right

made we I think better.

we all when called businesses teams, And improvement. software processes places software seen great is think Gordian that was the I So profit Gordian the it above all certainly operating businesses. that these as much transactional our our say across several just we bought and could applied out in exist is things made where these about and we that, Intelex company significantly the board

and ultimately pools have teach of frankly them. to and principal leadership the So encourage we these sometimes opportunity, tend if can places, they but to teams support are quite businesses found real different those of the good we success. We them in

Unidentified Analyst

much. you so Thank


next question with Your Joe is the Giordano and from Cowen of Company. line

Unidentified Analyst

I about thanks you, elective a I questions. actually wanted this quick, real lot come is that guys, Joe, procedures. just Hey for talked for but to back the [ph] Hey, ASP, to Rock in go my taking know we've

you and of the wondered, versus underperformed that what Just In regions upside second called the kind in regions provide kind expectations. out? what some your half maybe quarter might of

Jim Lico

so part It's biggest US of that now mostly our our is business, the region. biggest it's because

of most the would stable. a think say We're but was the in for I markets pretty it bit but, in most the Europe, of I part little States. actually outside United most US, So

because other did. parts the So the that Elsewhere, change we're share of have bit we the that's are. that of a we're our change US in COVID own world the of we can to more in we and the little and the more electric make we luck probably little what procedure a receptive bit

going So now I said, couple hundred getting think of the a that that for points probably where that the we of to are thought the as we probably really we're different to basis closer stand end year, second than forward, relative we is we stand half. where we XXX% by

Unidentified Analyst

know you service business That a about another Investor but you the closed about early hasn't Day. then that question AI rolling because into bit as think be know yet, this helps. might I but you and talked just And one, a that for had you it channel at initiatives have and lot Fortive

the I on you it the wondering initiatives organization flip When service the then me they you're a for thinking to some of enhancing might leverage think looks like the too. then the well able services you side, do. the the now guess like side from Just service side, overlay the be a and and something through is that good analytical have about that back-end rest something is matching providers technology customers. like that for as across on those provide from little about AI inheriting And of

Jim Lico

product. It's important a service of is is an accelerate customers absolutely with forward. the network do to network. of really for So algorithms, definitely us to be [ph], have We the a but very small accelerate only planning be stream Relative great going Scout so talk data analytics opportunity customer one, things in will were a they number have between already the which we to to revenue think the that they yes. that product, the real but some channel part answer we enterprise and the opportunity that flywheel not today, can the part ability of service port is a to capture we answer think it their about the real

Once doing is predictive in the we're businesses different place the get different within of churn we that that those businesses. to actually same create sets is to algorithms operating them our software up the the the opportunities the apply we is to to [ph] algorithms Probably is running, port or of the and business customer principals can most around roles growth problems models. One re-task models to, same business. apply within customer can we

that's we more So, as job to is through and the them. we more make those data continue recast maintain a algorithms get big absolutely algorithms running better to them [ph] and and those port part of


turn Q&A over back our session, I closing call like any would for remarks. That to does conclude the

Jim Lico

Thanks today. and everyone the thanks time taking Pasha for

or saw a today was when really think you I what with strong earnings quarter.

time. work here. the place. Thanks great for is team continue take advantage the of and through our and We're work year of hard the Thanks We'll going forward growing for want going really think your in the support. the hard we look I for to seeing your of opportunities that look haven't lot advantage I calls as to market continue about every hard you the follow-up diligent forward quarter taken work that our in excited the the a saw the to We soon. to to conversations we a you continue guidance, and opportunities a really going Thank who margin to on. team for great Have we in hard A profile, work and better think the those a that I of all you thank on day, work we're Stay certainly take have. the summer saw you. vacation yet really a all with rest market, with and to safe. of of so


you now thank that concludes disconnect you ask lines. conference This today's for call. your We participating and