Fortive (FTV)

Griffin Whitney VP, IR
James Lico President, CEO & Director
Charles McLaughlin SVP & CFO
Scott Davis Melius Research
Deane Dray RBC Capital Markets
Jeffrey Sprague Vertical Research Partners
Andrew Obin Bank of America Merrill Lynch
Julian Mitchell Barclays Bank
Nigel Coe Wolfe Research
Joshua Pokrzywinski Morgan Stanley
Markus Mittermaier UBS
Andrew Kaplowitz Citigroup
John Walsh Crédit Suisse
Joseph Giordano Cowen and Company
Andrew Buscaglia Berenberg
Call transcript
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My name is Alexander, and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to the Fortive Corporation's Third Quarter 2021 Earnings Results Conference Call. [Operator Instructions]. I would now like to turn the call over to Mr. Griffin Whitney, Vice President of Investor Relations. Mr. your begin may you conference. Whitney,

Griffin Whitney

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

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

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

James Lico

the good Thanks, fifth company. everyone. Griffin, quarter, public anniversary Early Fortive its an as third independent and celebrated afternoon, in

of to to in outlined continue enhance impact across demonstrate of growth margins we we execution Fortive the the capital through our the success innovation quarter, Business the the acceleration and strategy allocation. This and XXXX of the of disciplined System, successful businesses

growth share. Our XX% in third were per quarter results highlighted by earnings adjusted

XX% cash order momentum despite to operating double for as a ServiceChannel to generate well significantly of just grew of software share the August, differentiated a and our our facility along adding XXX extending facility revenue and high-growth In almost supported combination solutions operating avenues our providing to Gordian strong FBS widespread of quarter, over low with backdrop across suite unique value-added high variety and high cycle the Solutions leading enhances flow acquisition Accruent. to and very demand generate another position of market, margins. throughout ServiceChannel, asset and quarter, strategic in segment. we life the margin as Intelligent and strong asset potential have expansion, organic demand. operators and closed by growth recurring application double-digit the broad-based Operating in $XXX with deliver by strong of with annualized owners of profile The software portfolio revenue we acquisition growth revenue realizing disruption. now offerings We against helped significant third of of of businesses retention. supply basis our core net the improving software growth, points continue dollar million revenue the In execution free total, chain digits, an X.X% core Strong In

across digital are X, position. we emerging IoT on transformation organic Slide workforce drive innovation As in tools in customer Fortive, across of tailored as in enabling solutions our organic Many enhance to progress at as Sensing can competitive investments development see management software invest focused Tektronix growth our continue well on to new and early product Health, our Fluke base. with vertically offerings and for at This improved TeamSense. includes you

addition, In our analytics learning our drive all to The machine across of Fort investments in data continue businesses. and opportunities

Our IIXXX, innovation is was the XXXX recognized Measurement examples, Inspection, Awards. of and product, across which Electronics portfolio demonstrated accelerating our Fluke such as the recently as a Year," of success Industry pace Test by in at groundbreaking "Product the the

to base continue progress across strength talent Fortive. build of our accelerate to We the

within a Soroye This of additions Intelligent Olumide now important our are through of Precision external IOS. quarter, Newcombe, as have we significantly of Solutions, within well moves segments. of the sets hires including depth to Healthcare appointment promotions leadership capacity we President leading differentiated Tami at our to announced Advanced as and Pat the combination Operating Olumide President and our and promotions Justin team. of leadership X we promotion how senior CEO development as leadership With highlight experiences aimed of all Tami President of building increased the skill and the of Group adding the Solutions; of internal roles Technologies; and Murphy, a and Pollak and These the senior to CEO Bill and team, number McElhattan

the growth perform per adjusted imaging their which as flow, quick X. Gordian wins improved just procurement to XX%, year-over-year represented XX.X%, in well, and with continues see $X.XX, of manage Gordian exclusive Among Datamaran, of innovation EMS demand support posted included XX%. to including representing project The XX%. growth doubled grew Adjusted and completing were North core core customer helped growth from a the excited Slide generated customers. is X.X% Europe work adjusted growth solid increasing $XXX line, materiality as was million year-over-year very the in revenue quarter total growth deliver times Gordian margin Turning which of several performance strategy, per backlog high-teens Also low - the to resource August, We paced results XXX% acquisition volume of ServiceChannel its signed This margin bookings in third our of acoustic support growth cash Western paced and by services event in in free have Imaging in America, record which well which to increase continued enables year-over-year. risk to teens leading growth in a customers Accruent and its product greater to and document strong to their the us retention. over FBS to earnings generated performance engineering XXX% and with Industrial in and share to of solution return orders operating was to momentum partnership in In net double-digit of by Accruent's ownership, services while continued increasing on Intelex seeing its year-over-year XX%, combination XX% quarter. This with the business quarter. strong XX.X%. quarter, scheduling to by early generated China. summary across driven business had operating LinkIQ robust its and professional mid-single-digit business, solution quarter grew quarter, at driven further seeing recurring Networks strong demand revenue line. efforts another of booking and digits higher in saw recoveries. with into deal care Accruent with for has ESG offerings The in are constraints seeing for alleviate single its its low dollar product by in Intelex financial in we analysis and of the estimating. including impact and tools solutions revenue Intelex and growth bookings backlog product expand accelerate thus plans. limit supply to done to the strong connection its CMMS their excellent dollars mid-teens with eMaint, in that emerging led for join job service for innovations quarter, also revenue what QX Industrial we've strong life strength in their Fluke's base notable was ISC low QX, in an end are Scientific very workspace strong we're see third QX, across increased the as its delivery cycle its by success of progress facility while SaaS pleased expansion fourth using customers a Fortive. also than into helped quarter. as component such upsell offerings. by and average which the of we're Meridian full continues but maintenance office to growth QX Fluke both mid-teens continued and order continued models for identification. Intelex performance The increased growth third an new higher third growth. significant improvements by supply providers. obviously strong in chain management process also initiatives, execute EMS high-teens on which from team by mid-teens, have the hybrid in its of demand Accruent see them After strong customers. global instruments far quarter is project. challenges from rental health hospital XXXX. seen revenue the to redesign carrying FBS as

Specifically, wins North in will America QX, mobile large carrier their ServiceChannel than several its strong which program. in software facility automation the as transform momentum and locations their including they customer across continues retail enterprise with to out XX,XXX demonstrate management in third Walgreens, large business largest roll more

environment versus reported critical registered strong to momentum digits, total with customer demand growth job mainstream the had applications, XX% centers regions XX% strong to end and X.X%. Hengstler space X.X% high digits, Technologies X. its than high deploying with a a pace safety generate critical order Tektronix greater than was grew FBS communications double-digit America customers, delivering improve strong HVAC core included OEM quarter with double also new portfolio Technologies Moving PacSci very third and related strong segment significant its X single its across and across to continued other Tektronix the customer trends a key in and across order a end of of given Setra quarter, of did Lenovo in realization. hospital Precision strong traction by grew in product gains continues performance significant Pacific of the continues single share its times to FBS order wins, tool low growth a with increased the Dynapar see with market with offerings. its manufacturing. including navigate Europe. continued continue saw additional markets strong of The MSO China EMC across to Scientific chain key ago. momentum in countermeasures isolation growth in its Sensing execution, increase delivery share Sensing by low the Tektronix robust an by with double-digit year its major North growth its by the sustained in Tektronix growth from led to delivering and Series robust number gains the extensions its lead demand across quarter. range excellent in and rooms revenue Western expand line. supported opportunities key data increase digits Even in its each technology Throughout efforts as high-teens Growth product third from by the offerings to aircraft with growth backlog base. digits pharmaceutical but increased improved grew while including growth. drive of strong and momentum with and set challenges Ericsson. growth oscilloscopes quarter. utilizing third to a QX demand the single-digit mid-single of momentum price including supply commercial across its on-time posted markets. quarter, applications, wired in see more This to customers. Slide by

low double-digit Europe increased revenue core X.X%. Western while America North Moving X. teens and based on included Fluke global ASP year in ASP toward performance, continues COVID-related elective solid This grew for hospitalizations across capital. Health. saw to grew spike a Advanced of third the offset of outside prior approximately in Total terminal the by of at growth benefit Healthcare procedure sterilization single China. single-digit the Consumables at U.S., low strong in strong X.X%, growth partially increase ASP resulting decline revenue by at all a driving high by the pre-COVID a the elective its capital single-digit single United highlighted revenue notable expansion to of Solutions the low led low geographies Slide in digits, consistent growth mid-single-digit decline installed quarter, XX% and on end high the sales increased period. from In growth quarter, comp difficult digits procedures in equipment including volumes in base. led to global by execution, States. in levels Invetech, the the by

open expect to digits and additions efforts supply new The FHS to CensiTrac at chain we Fort, realization lower have sustained growth quarter. offering, to open good and new across to highlighted with throughout included life year price continues the sites demand continues low significant and partnership by tailwinds. year grew strong with predictive pass driving and continues carry Landauer Chuck, significant the end significant Fort's some normalization FBS very it COVID-related science The elective momentum in managing see churn through using healthy company While from high With diagnostics strong backlog opportunities. FHS SaaS benefit customer America market digits, modeling well flow in through take well our driving Censis verticals continued growth continue very quarter, additional as order The related I'll traction momentum QX. will sheet. term, and customers free order and who against than benefit the base. its customer by with nominal customers. customer Western global it from the to services we volume range, increased deployment in the share professional as longer Europe gains OEM Solutions only existing with balance from innovation was in software strong good tools. hardware. ASP's XX% in which to saw growth tools. consumable comp expect that, company prior expected mid-teens in as market that continues XXXX. single through a It The strength benefit procedure to margins, see mid-single Fluke and of to upselling continued QX, into you better with throughout growth growth to Censis tough improvement the the expect over Health tied in cross-selling executed access installed details XX% declined with volume increased and early from on will cash to year-over-year efforts to and revenue by to and constraints Invetech North procedure

Charles McLaughlin

execution total to points expansion profit of the strong good We realization. measures Thanks, trailing QX. you $XXX strong price in software XXX cash face QX, enacted was can XX% across FBS businesses million. the adjusted component in portfolio, performance accelerated a in on third $XXX representing basis variety XX another of segments, X, margin conversion expansion. over XX a of gross of our Free value hardware of free XX.X%, generated our across continued This chain helped Jim, of the strength flow XXX% the and operating of a all of operating cash of pricing to quarter, Slide we increased see solid flow, ongoing This execution including basis counter million in On to basis engineering income. basis points that the deliver we resulting challenges. adjusted performance margin and net months supply everyone. XXX as had XX.X% points core margin to adjusted reflecting deliver in margins across year-over-year strong tools reflects QX using of We delivered implement businesses. successful substitutions afternoon, FBS and quarter of

approximately net expect X.Xx year-end, to leverage current be M&A. leverage Our we additional any and is around net X.Xx at excluding

Turning the guide on to now Slide XX.

a year. end of tax We XXXX resulting a to margins full for XX.X% of EPS approximately are XX%. to $X.XX $X.XX of the revenue This continuing adjusted low rate guidance the XX.X%, XX% an $X.XX, diluted to to that represents basis. raising of adjusted total assumes of our profit in year XX% growth growth range XX% to of year-over-year This XX% a and effective on operating operation net

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

per initiating also earnings of fourth X.X% we that end year. net of total net diluted the representing profit share rate approximately quarter also adjusted growth tax strategic effective diluted $X.XX an excludes XX.X% earnings $X.XX execute adjusted year-over-year initiatives are of productivity XX%. guidance The of X% guidance We This adjusted $XX to investments of assumes the before per expect and of XX.X% growth to to X.X%, XX%. to margin million revenue of anticipated to share in operating approximately

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

James Lico

with challenges diligently worked Thanks, we supply We Chuck. We're pleased and our continue XXXX. which QX. to that expect into the throughout very persisted quarter performance to in countermeasure chain

an also excellent flow job and teams doing while cash strong Our free to generation. those deploying performance FBS headwinds are navigate margin delivering

across and the continued demand order our Looking in driving end we're backdrop software in businesses. our seeing across strong significant flow, markets, is our growth momentum very double-digit backlog our growth with

While look and the free I'll base and double-digit capital that, the our in Griffin. and of talent way to to innovation, in competitive we're our advantage as it expanding pursuing focus earnings flow on consistent leadership turn years continuing we back investing With enhance deployment come. cash additional for pave execution, our growth to opportunities

Griffin Whitney

ready comments. our Alexander, are now for we questions. Thanks, Jim. That concludes formal


[Operator Instructions].

from first Research. Melius Davis have your We with Scott question

Scott Davis

If offset as price bit. price And a go nitpick your to offset quarter QX is Jim? going to here trying points just fully kind up you deltas that - XXX good continue of into is pretty the up did as costs cost, still little rise? It's overall. basis to a I'm

James Lico

thanks. Scott, Yes,

I all price think relative going really ahead position number cost. to know, - up points in we've you And in as year quarter. gross one our the is a been margin's we've good XX been basis hence,

ahead. we're yes, So

price of I And we think it, those the basis really think businesses is hardware XXX points. Sensing. businesses, think things we Fluke, that about over - in and as the one it when about tech in were about you big

there So yes from the improvement see we'll fourth quarter. and in

shape. So in good we're so yes,

see You'll software the in the net businesses dollar price the in retention.

our like or in number you'd the of the a in XXX in businesses net dollar up businesses. shape inflationary businesses show we're higher - It relative with we're, to some of think, relative to that And the means also pressure in at price the way very metric just it. any getting retention so so we're software a we even might have. But hardware I price good cost doesn't

Scott Davis

good. it what more And positive then more some you And specifically you ServiceChannel, deal? when that than Okay, today comments. is closed like the you perhaps made

James Lico

one, number have think the I the full think, in I the organization we when entire team, Well, didn't access were we to deal.

think I That's the I the excited and person mean, the the said team, of in quality We organization. about work been number always I think with great. one. with we've we've So product done, we're was the

So And there. are business how really out expand and we we really of I the starting is solution continue is we're prepared levers to there's some breadth the positive. say great of is I the is as the to see can good. think in articulated than don't that thing product opportunity the other there other would surprise the the any and remarks,

do we're, - to our here year, we importantly see more we'll business. as the And to you think, of the we'll good place the next how relative know, certainly for year, we'll very and now, in but rest I remaining relative about right month, plan for codify a plans. do our So XXX-day a in


Capital from your next Dray Markets. RBC Deane We have with question

Deane Dray

there start building Maybe you're something the Just with issues. factor Fluke. Fluke. be guess gone backlog maybe chain in a circumstances, in has supply would My that helpful. most some not was And right if color is with

James Lico

Sure. Yes.

very had very, we quarter strong a at think I Fluke.

we we did As backlog. mentioned, build

challenge. has product any bit little a here of that to a you range components of going know, a be is electronic As

in So teens. high orders were the

business. we're We built times backlog with many team been So we're and an as on on couple place the we're there work from the perspective mentioned. I get well, doing number you the like as to prepared taking shape and challenges good order floor, good we're really where in well. as strong I really all of they've shop the with good some the where the of things position of also a in a we I've with at, really driving examples had. think mentioned, of we're share. component of innovation But course, remarks, with on backlog of very a side. market that's they're of handling and margins And the really

Deane Dray

Okay. to a start be a I from not fourth page And then discretionary opportunity you on on to the to playbook as really in your jump This guess restructuring some a jump the do year. get quarter follow-up, should surprised. coming is the

$XX Is this your just be clear, guidance. million, not that prior in So that was to correct?

Charles McLaughlin

countries that been Deane. guide. correct, Day that the some into at also hadn't some things X then That's reductions our footprint. ASP on things get after, to but facilities around looking reducing we've going plan we're got put our we got with And We've

Deane Dray

from And from - it. benefit which segments would that Got those spending?

James Lico

the half split X, almost other half health. - it's the IOS and and of in evenly other half and of about Yes, PT between


next We Vertical from question Research. Jeff with your have Sprague

Jeffrey Sprague

question, of that prior $X.XX range? you is Also, QX year the to any in ServiceChannel that. kind down? I the there of X as $X.XX some view bed dilution answer to of Interesting that in change think, accretion, from absorbing And

Charles McLaughlin

get revenue change not as profitability, lot profit actually, So operating of quarter, in to that moves it X the coming Jeff, it's just No And year. in this with, next to into year the range. expected. we're a we as really, fourth is But going accretion $X.XX in really, around Chuck.

different. that's not So

in little so there bit inherently, a is of dilution And there QX.

Jeffrey Sprague

in And is other of Gordian some that's with good of that. already? that Fortive? or something the there then Accruent already pipeline the Great. or synergy was this spite part look Margins just occurring in on some Or deal, Walgreens

Charles McLaughlin

take the credit their to on but in love a did for and it, it I'd it. team funnel great job was executing Jeff,

won't - synergies But due our for when right the - funnel diligence. saw take So when is we in now, next did - team the it credit I obviously, the year. we we we'll happen, maybe

going think knew, do high. their say-do ratio we what of of short So has happens completed during they with versus things to they've been were during diligence and to that due the one executed extremely That well. on things they've I they time said them really period be our

Jeffrey Sprague

answer the backlog, the tech answer to a backing is Fluke to And backlog, the up same as some bit? the just little supply the essentially

Charles McLaughlin

Yes. first not to I I - we're understand. about talk mean it's the company it, what

just for But with at really well of to in backlog good standpoint. think, fourth said in a a I a So a seen but story - really the sure, off here. supply quarter. has to, acceleration constraint think the components. just quarter combination of What diligently to that's these teams isn't the demand just electronic has be having because - given I availability This continued some we're good more the of lot end inflation working issue. the demand beginning I XXXX temporary just accelerate, puts It's things. really of We've a on think, issue. the addition accelerating the And demand at us a it's was the news than our an in at issue it inflationary the day, good position end would start demand an it year, of we


America. next with Andrew of Obin from Bank your have question We

Andrew Obin

on Just pricing. a question

this lot power? Because going inside ago, putting pricing is price not back was was tariffs. Just has X in just a a just cost all of years What like, cost enable an of a an issue, Fortive that pricing, price drag. the more have more I to and we issue. of sudden a recall, changed lot I remember to kind and it

Charles McLaughlin

margin we've case, as of it's stay what an But price, are of One, ahead of at delivering staying I but created at, Well, because the been will cost hardware seeing and been remembering you're and PPV getting, long. we've year margin think getting and our that XXX And and been is so equal and mentioned, all able on in offset a do pricing we tariffs, are drag things. In doing one-for-one we've we that's that. points we but is and getting working I the amounts out this taking basis operating basis, of couple expansion. price that a that what business, we're to of to business. ahead, Jim why up chipped it away still think

Andrew Obin

just And question. follow-up a

see procedures you your relative improvement prudently back, Looking the where see But globally? be and turned months? else conservative it What's out to procedures on frankly, everybody of do to elective X us. you on of over view next X to you elective as sort going the pace

James Lico

we'll in we We start same to kids is - continue those assuming about fourth to Andrew. in finish back. see XX%. first we the ended the progressed. I first here. of uptick. quarter, impact mandate get, we're hopefully, federal vaccine we fourth. But things in to specifically the Thanks, a our States variant to had the Yes. once for the the are start start the I for suspect assumption number no stay And quarter when quarter coming as we'll today. as What saw, some we Hopefully, they think quarter, quarter - procedures same, quarter get see get vaccinated the the to QX the get fourth the real at about about Obviously, the we Delta United

a place ASP. - a really in we're good we're in at So good

had anticipated mentioned, came offset the than what at from just had we your we to expansion in some on not quarter. very to on in had a - better we of question, margin we a very ASP. Equipment As follow the consumables. ASP We headwinds good good at quarter

good XXXX, that back in electives take really a we that. if And be of on advantage position business like basis to is So where we'll the continuous at. come in


next We Barclays. with have question your from Julian Mitchell

Julian Mitchell

Maybe just QX. guidance the for first question around the core growth

So at midpoint. the I plus of it's sort think X%

probably in price points of You've X around there. got

the in points . X growth of a of there reflecting saw slowdown just is Maybe assumption of any that China? going big has Maybe businesses something volume QX? as on growth sort maybe of sort recovery that Is there slowdown. going So Is volume just QX, was short-cycle hardware matured? sort big in around the in context that for I a negative please?

Charles McLaughlin

couple a things. There's Sure. of

the points growth it, so we about our when the specific growing, price got on stack, is at that QX businesses, XXX it to but think you're increase. is I still versus increasing you've hardware looking you expanding, - a even overall, rates basis look XXX way right. X-year XXX but QX. we're But at actually in the think

strong think think noted, I Also, I as So are very we here. actually bookings that's important.

with the isn't to door really out - the we're the the what's growth, the implied demand of So reflective of get underlying now what in able businesses. right

James Lico

quarter, see lower had And I'd they seeing digits, very One, Chuck simply Fluke little couple had as the so We'll at quarter, while get the tech and your underlying bit good of in growth demand. quarter, as ASP things. demand orders in better a in question, the said, on Sensing. good double good the the order. because the and say XX% China just a order growth. as well we growth we're From for demand to in a second is perspective, Julian, half China over fourth had Relative

so fourth will quarter. back see we the digit in growth mid-single to And China get like

we've good of in sale point So China. seen

to from quarter. the quarter They're about week certainly with review. doing and Chuck had a carefully, what's the I were should headlines. because But it a of operating optimistic watching ground an lot good the improve last fourth the the of there and we the third we're team on sequentially fourth. So happening on

Julian Mitchell

quick then operating That's very margins. And follow-up helpful. around just a

year-on-year price the just incrementals strong of Or mid-XXs where maybe are company-wide. little bit outlook so around maybe It sort in for sort sort we fourth the anything run and volume that in the moving rate specific operating there is but Is a something for and you're QX assuming current with QX? very third quarter, going good the had you cost - forward very looks So leverage, coming in? ServiceChannel of growth of in lower. like

Charles McLaughlin


talk QX print - follow-up model. we we we when to well. incrementals. And is the call, underlying QX, about that's we're the incrementals think get XX% that's I ServiceChannel our have can in your XX% think we what seeing. So that around assumption confusing if Maybe But I and as when

there. seeing I'm any not So slowing


next Coe question with Nigel your Research. have We Wolfe from

Nigel Coe

going we to well? investment restructuring, be back the to 'XX, $XX can The Chuck, maybe "one-timer?" 'XX should just think you've - a and do would think. in that in you we that come as good about of million, do just that Is magnitude I sort this? here. because to sort how restructuring half that quite And Or consider intention something I said this the that, decided of be So idea to decision of a, in think of of you was just plan ahead to do some a this IOS,

Charles McLaughlin

them to all, going then go we these to we Well, continue ASP realm. think had an on and and countries, to forward we're that's bring evaluate what adjustments forward, we'll some come to as see out knowing always of as first going that be of we we'd the COVID, I our I'd also evolving need X going Day say probably thing. an footprints make we on here to continue need intention to that

forward, a you what we We're It's then could change, tell certain not as a see quarter. do amount is about see each to theorize we'll make that like you and we So we but you're it's that situation a need then - going could to and plan. going we the it. have to going

James Lico

sorry, And Julian - Nigel.

part within is do Sensing in relocation some it third factory to in other as The well. some the did of the we business

second puts in So are the quite I us around a And good frankly, the half, think position. half. these really, second ideas early in

come plans, we down. with take our together work return really the have, we our businesses certain can footprint in to some it As says we that of -

as obviously so advantage take come at those they to And us. of we're going opportunities

Nigel Coe

then on versus Great. single-digit growth And bookings. Accruent, mid-XXs low

at momentum So obviously, update on the us how a big you Accruent. disconnect there. just revenue Maybe see

the there's transition changing at going a the retention target that touch net around XXX, year-to-date what's And your well, all the metric. through on quarters? Is retention? on SaaS of as I there. maybe think And just that's net

James Lico


of but prepared there, out strong have in we'd good remarks right, we the call several what bookings you're slower growth growth but in called those little those relative strong businesses. Accruent, - couple bookings, bit to performance we really a of did a to relative the revenue businesses. So really bookings in the We had

churn couple for in or set think digit didn't up we quarter, in other little we're right, I mid-single events had a well So occurred anticipate. that events churn things that couple XXXX. we many But a you're of - on onetime hit a revenue the

and particularly new businesses to But to that thinking we're I that to So certainly the of down Relative go and the a improvement, would business. pretty bit in performers the Fortive. at be relative up to it metric think - the as because I suspect where - position sort next somewhere would good while - our have we number's continue basis in would always are high. improvement some ServiceChannel for are new of XXX points as XXX budgets these down strength, still that basis order eMaint would best But each to quarter. we - we year, to about through suspect least in around years a we of Intelex expect of to XXX, be year. But an that the you'd get logos, at. example. for range slowed little few we're we'll on XXX next businesses as going we're we points


Josh from We question have Stanley. your Pokrzywinski Morgan with next

Joshua Pokrzywinski

that goes ex to interrupting Is half ServiceChannel, sort sure Solutions and in in. right, make then question, want of nitpick the here some the I if just But with So just in to coming not I'm ServiceChannel on the margin we restructuring back - add a of like, Intelligent understanding follow-up this Operating the differences microscope this of supply of just in seasonal Or unnecessarily? like a under or much in something it difference that? there, restructuring sort that's XQ. there slugger look sort chain I doesn't there the putting that of there's am of a really margins

Charles McLaughlin

their very margin are margins I Well, expansion. they've got good, and good think

that So - just margins there's about I got the highest some highest talking company. - of the the we've we're think in some -

planning sheet all in margin understand you we're seeing, that. your But to think, I through our help sequentially, detail with expansion, get of you to in and happy businesses. So

Joshua Pokrzywinski

really of Got top some sort that chain, of kind maybe it. specific I like X or are be focused things, thwarted particularly And of Jim, then terms your or like kind others X supply would of flavor talk X just things folks about freight know have be what the would in that on labor would be see. to and Like, best air freight chips, your X of as issues. or helpful.

James Lico

I takes back involved routes, Yes. in I've Well, I you of think last I take say XX likely can a kinds electronic would over the detail things I been would, have I our businesses, it the through as lot than of in because more more content, of these One, of typically a me Josh, think a some couple guess. more to certainly things. challenge. the to days

kinds semiconductors board multiple all you of think which circuit multiple on at is chip has - board it, like a Tektronix, has about a complicated, on that. technology can So incredibly

and variability to well a then little will Fluke Sensing that. going less. have higher be because as You're as true bit of just

how a from goes, how - that So would be. it just that's

I previous seeing a mostly paying little as in get the shortages. said We We're are And mostly things. availability. to electronic more around bit comment,

of some freight not there's involved So - labor. premium lot a in inflation, very

given content of the in now at those that. productivity do care faster, needle - sense and because We it even so It's about in orders have margins on makes seeing of the momentum we're products, gross given few we're as first availability sometimes in we right ultimately, much. day, demand the a the spend the makes taking pretty simply low now, customers. end material the those pennies we labor things, but doesn't move And if right sense just just initiatives, really because margins. And and more high sense and the labor of the decades to first company, it foremost. some given our to something pay foremost, of makes obviously, have inflation, our It get to our to

with deal well So gives we we're have you to that we set up hopefully, window. because management, what Every this a visual call management. daily day,

our tours. in it seen factories during You've

Our and businesses manage the every factory hour. every cell by

just And well bit so on sort steroids in just the amplify it. and to up get challenges a set to that of put after little order we're

well here. It's the And we so countermeasure that issues. it doesn't mean really we don't makes how have difference


UBS. with We have your next question from Markus Mittermaier

Markus Mittermaier

your one on great agile it's in pricing year-over-year backlog. mean hand, sword, backlog I obviously. a but the is double-edged sounds wonder XX% I how increase

further you sort if to? backlog So of your you are once flexible price adjust have things how hit to

James Lico

we buying I big the what distribution or sell pricing. one, think number Well, can of limit we where that is certainly occur in the businesses we do into amount at

will we buy, obligations X a price something ahead obviously as not make contractual with like, So contractual months partners their if necessarily work stated, we - like we have we to markets. sure have increase that. terms, or And contractually part channel of our

channel as orders that's reprice partners. of many So partnership certainly well. We've to we with how been cases and work a part OEM able, in

others pricing. about it backlog think speaks their problems talked have I with - I having think really So to in

that's around We us to and will what going continue have know confidence granularity forward that here to cost our that price to the continue that know gives really we'll price good what and improve. looks get to like,

Markus Mittermaier

one That's - good on to hear. follow-up the ASP. And maybe then

a growth. installed procedures You opening bit also that's on elective talked But where your in remarks, you both on trending. commented base

So potentially driver Because trends actually the if here? XXXX, are equipment I what's as quite it the seems positive look like into placing bigger well.

of I sort if get here? procedure growth and be that should what we recovery, So get sort of elective dialing in I

Charles McLaughlin

you're that Say, Markus, think I right.

to accelerate. in placing units - that. business starting to is We're is underlying very about proud continuing Our

elective get do coming ASP back quite answer all to be to ramp. But we're and if month. year. to half in that X do time. actually your in it of that would once at But period at probably back. just - back forward. the - next it's what think But XXXX. came surgery's that closer think all it the not of the be calling be need driver once, over coming springs they what It in year quite and a will question, if a see coming tailwind all year some It's bigger a back for to we think could growth I This of I I really bit

James Lico

one but has little think, in to bit be that that's caused occurred the years, last man, certainly electives the I to is the it - Markus, we X X relative something last months go thing to a months, sideways. know certainly And over last true X every over

when nursing get month is, laying get our So with I to shortage. a the we'll - a network facility. States, elect they're in And to as comment sort year, premature be it's good looking they it's was major and - one ago equipment, groundwork, say laying forward. about United also hospital hospitals, their They're procedures we a it of it's COVID, only is but the that business in placing to also that I think growth. in to normalized safe more in maybe other just foundation on for it's the certainly event next the call forward elective not adding is particularly more

are back forward obviously. So time, comes probably looking to, back, it over we doesn't which it but snap really it's certainly -


next Kaplowitz Group. from Andy question have We with your Citi

Andrew Kaplowitz

Fortive sheet. obviously, really continues balance a to strong have So

you said think year-end. leverage X.Xx I at

rich ServiceChannel acquisition. talk flurry your remaining do And front? quarters few after could about continue So assets of the toward on environment out obviously next revenue active valuations side. you But M&A lean the I such continued be And there? on you software-related acquisitions We've the to recurring over ServiceChannel? seen you would know a see acquisition on the Fortive as focus software-focused and/or

James Lico

think really said things. certainly customers. you, with hardware some on It's we strategy. do technology to working software within we've We're to - opportunities about workflows what busy. out there. we're talked I adding - last And very things. on accelerating some Andy, as few are about Well, the we've our as advance It's the remain years, - working our I we - we over

we think balanced approach I So a things. have to

to building growth I only accelerates over think more think that's lots lean but resilient ways gets from that returns, - of opportunities durable, deploy strategy, capital good a in good a to additive really is certainly strategy think really, time. We going a a on revenue. we not see in our Fortive that's perspective. way we We're towards us to recurring

would leaning so towards say kinds opportunities. we're And those certainly I of

certainly were recurring know, Industrial they or in Scientific deals, we our heavy whether when they or had we those a hardware. of even deals revenue hardware Landauer ASP, amount As were even

growth, for resilient a but exclusively, have we're majority growth continue to we those going probably also is the to build things passion can a to more look So for to but opportunities, durable, continue the idea going not really we're doing with rate. that of that

Andrew Kaplowitz

sort And a you different then maybe if in tech I with could about way. of asking follow up

always you quarter. I mentioned EVs. You've centers, about this focusing talked data know on had momentum there, product good continuing and of new introductions you tech's strategy

sort maybe the And higher to of the momentum is given versus where in cycles, past plane change come on that is a just growth tech's from? focus? continues So

James Lico

- Well, I of our service because think, built over base it's but revenue a time. in we business, that low-digit I had, think and just foundation we've growth our number resilient one durable more is resilient

built we've we've I prepared offerings some into there one, We got more business number because We've remarks. So mentioned we service that revenue stream. that growth of just the resilient that software that with. durable the in rate a think started got

a building durable stream. more So revenue we're

do opportunities fundamentally I but electronics they to obviously, call a that forward, real issues relative in that kinds when going think the talked frankly, While folks or need have lot products the for advantage semiconductor quite components. different at about, oscilloscope. redesign going people chips also taken of products growth require higher quite and would invest in frankly, of those supply the who cycle mentioned, in as the different And a to of about things of things one continue chain same is we've constraints time, And what these we've of to situations. to we their is extend as you number to

have secular that not business to shorter-term been as some is also, that. often supply So only to deal going end these products solutions people of up also with there's to challenges. to redesign. have can opportunities after, trends the And the we certainly, a long-term that chain of fundamentally, has in sort do but continue think help the and we And people some start

But has So I still of revenue and growth, Obviously, towards to a component on to of - team the job it. the think continuing we durable nice we're technology very higher a it has done streams. bullish innovation volatility business. more drive


Walsh from Credit with We have your next John question Suisse.

John Walsh

to back very nice margin the inflation. first going in the Obviously, a question, Maybe of gross the in improvement profit face just quarter.

you the getting more But been portfolio benefits kind kind more growth. out Just you're that in from parse if not of if lift how cost curious wondering that's called out this mix yet businesses. revenue? a software, doing of you've the SaaS Or up? price towards hardware that showing You also

Charles McLaughlin

ago think - expansion. price net that's you That's average. I we've great where we businesses you question. also see software you good a heard Jim Especially retention. got lift when businesses, as bit margins going No, our and mention little to with at give take And - about margin faster fleet their growing a great well. a look those than the another a That's

our a the what's also challenging staying cost certainly very - businesses, it's important offsetting on software and environment. ahead the So but is price

John Walsh

of ability layer you Any from Great. of could wondering next both Was you acquisitions kind obviously and kind and keep that give your internal color a the you've there, to us talent And the external please. then look if highlighted just the promotions here. the made? down

Charles McLaughlin

excited analytics CoreLogic. Olumide in that He he's an join enormous have us. have and, on data really IOS off experience we're It's digital really, software. a capability we're running in Well, incredibly is all sure. the his join created him - team. and quarter. he view obviously earlier and at to real Yes, the And We announced to excited brings software.

brings which our capability a how Obviously, Tami's development wonderful leadership is develop approach is data-centric on part in So talent. his businesses, really these to he great promotion a of internal window a internal I style. on think view a we

of next with a acquisitions. whom internal both So X we announced down, her came with the promotion. layer promotions, good very place Relative we're in to

Bill with Gordian. acquisitions, to Justin both came ISC, us and Justin with Bill with

prepared announced And promotions the remarks example that to they we retain and acquisitions how additive are we is continue good leadership our in the of how so capabilities. a to from folks

appointments several recently internal So to to we're a announced in adding rigorous as very well have talent. President we Bill backfill process. We place good very Justin. and relative like development And for here people internal a

we from On care new us brought at health new the side, some to talent health ASP give standpoint care real in - really our care additive experience. be a even to health

rigorous to So process, been recruit development a We we've I destination able been of think talent, to certainly to bring Read quarter. successful through we've not become bring only to we've mentioned second been Simmons folks for Head in being a to and top-notch take - we but retain have approaches, and able do we've the some talent. very that. our in we're continued able people We've as who Strategy new opportunities very in


Cowen. with Giordano from question We have Joe your next

Joseph Giordano

if something talking their was protocol IT. into competitors tech like, it of devices, - for, you're your So competitors analyzer worthwhile? is doing? of talking offering one that's your Just about having something that you integrating capability like curious one is yet. to that scopes connected think success was an Or Is in

James Lico

the the where range end on but protocol use we Well, the it think scope the I think scope at the I appropriate. some of of day, that's capability, and of the depends have

really data the they're I application bringing of been has we've really helps moving - help really some software been and measurement where more call would solutions to focused that really So to been scopes, different in capability work the adding in direction rather adding That's with. additional different that say that forward scope in the probes, post we've more our to than really application folks. specific centers, really automotive the it application the engineer forward, successful around

Joseph Giordano

gave line the single you going then, versus guys I'm end electives knew X was curious, you will And - or like, you last are Jim, that time, last top Okay. were like, bad like, you thought variances on biggest, up surgery. X realized - just what cautious time? when guidance elective what the Supply then. big into appropriately being - chain

James Lico

In the quarter? third

Joseph Giordano

when versus you gave... like Yes,

James Lico

electives, electives I mean think they we were part we thought on be We we were were were were to going I but Yes. conservative of lower anticipated. it. - certainly than electives -

hit that easily - our is was there. million So to end on $XX And then revenue, ended guide the hit roughly of could probably which up. hadn't you could XXX September basis think chain have We supply just us of we we about points didn't And that had some the big we constraints that relative revenue - month. that there several upper maybe said the had September's we that certainly, anticipate. in a of if always things

we in into So that's with despite of tremendous power the challenges. we them. would tremendous being I manage, still challenges, quarter. what issues ask of a isn't the as to have to rather the really And XXXX. noted, we'll FBS with to anticipate flow And in be didn't terms the able really to but those of free well through - dealing those a it, supply we'll you things. number of that countermeasure challenges, do And and of margins And chain I think this that's that cash to facing but fourth the story absence continue deal speaks ability

Joseph Giordano

couldn't guess, were thing? components sitting it's on kind side you to Or I from able I supply - customer you that just clarify Is because chain. down and stuff stuff to manufacture can stuff couldn't it's worried and take of... you couldn't just it delivery to in inventory? wasn't Can you get your now you the break that out - one that get that between The the

James Lico

this components. No, it's not all is oh, getting -

demand - have through up the tremendously picked quarter. We

said, we strong orders the year. we rest orders the As we'll had have and of strong through very

are good. Customers them soon cases. very in to as things get profile's demand taking most can as our So them we

challenge an anything not has like that a as, is companies. inventory by purely been documented think, This or is other of we're dealing a this component that. with lot well So situation shortage I


Buscaglia with We Andrew next question have your Berenberg. from

Andrew Buscaglia

situation. Advanced on ask will to like wanted doesn't as well. snapback just It Healthcare be - this seem I exactly I mean a

half You're facing first comps of year. some tough the the into

pick the we Like, I guess, So kind really is some what guess of leverage? margin guess, where, margins those to up to but happen FBS, I more first I will in muted half see maybe? needs see question

Charles McLaughlin

in segment some - in operating we I saw think the QX Well, outstanding X to around expansion of XX% Advanced from, first, QX, in profit. margin Healthcare I going adjusted XX% think,

ASP. did had so And quarter, a just expansion. Health. at not Censis seeing we're really good good margin that's Fluke So

got placements So and we've - our hardware there.

now. already. advantage. had And to - saying be clear, surgeries that a - so you're elective And there's basis seeing we step-up be to and another good even a elective we're between where could to it that's is QX Health. they're - to with But QX, QX XXX with going staying QX surgeries we and do if XXX at What from future to been expect have to right better in

Andrew Buscaglia

a cheaper is definitely is. - choosing a enough. cash? But your minds leverage for here where maybe done And is - of given of different of Okay. Fair Chuck, or maybe kind on year. where - the that as on avenue lot comment, your your whole getting I've the kind M&A What's you can last and with a are stocks buyback know the top thoughts I

Charles McLaughlin

We probably remain like laid billion billion. there. in first we're very that way post about said done It $X.X $X deploy optimistic to years Vontier. behind with we We've had the that sounds separation running We've opportunity capital. we the out X

got So for we ample think that. we've opportunity

not And so being changing priority our we're M&A.


question JPMorgan. Tusa your next from with have We Steve

Unidentified Analyst

on Just a question margins. the AHS

Is there of procedures? margins And XQ. we a think there job don't if did going quarter. margin still backed can better about little quarter. is elective next think you this a into potentially number if on we higher we kind kind think I I bit kind high on a exiting can there? year? last They anything know were into a a as that - of like, kind of out we - Is look XXs of

Charles McLaughlin

XX% years we around XX% for expect That's margin XXs. QX, they're being it's we all, think - and $XX it's XX% lower number in to procedures rather that million to health, of about expand $XX elective think than Yes, in business. margins of - all a I high as million discussed. somewhere first around margins of to the I

you margins to QX. going are margin back. when And but QX that do that, of And know we're we that so clipped from that expanding off XXX basis about still expansion, procedures - soon points electric to come

headwind today's tomorrow's is So tailwind. there

is Nothing's So the destination we That's - about going high possible. that. what are but still those - we into very think XXs. don't changed

Unidentified Analyst

comps - little you an headwinds guidance on organic do your with perspective? next better into make than would a in year and given it. unreasonable I X that on kind Got you're then line more just here bit next I Or longer-term mean, of the rate XQ year, be kind exit the And at anything from that highs the in mid-singles? you're exiting can heading guess, a maybe with mid- of mid- organic. of to that year kind facing about next to Should constraints? supply

James Lico

still we give of about as year get rest we Chuck we of certainly where good variables But Orders safe to to said, going in say strong. had the before, orders. the there. play the as software up, very is growth little But I'll suggest bit the going opportunity AHS setting the to out are Obviously, to in had a less a end hold They're year be well. we're be to. the to talk things year. good we just current, to That position great out up fourth. never Steve. a enthusiasm some for are until we full would it's even we relative us continue setting the backlog consideration guide. lot There's certainly how my that pretty businesses, quarter, there's at next to Well, considered, to had

our we retention. continue think we can So to build on net

October. to focused good So we things, I for I'm setting do get pretty things up think now quarter. right got some but let's we're to this deliver certainly the on through

but we'll - So be we'll position And been there backlog soon. our we we've best if out think, - ever I get in. in that have obviously, the certainly think plays way it we'll pretty


further no remarks. to will time. this turn call closing Whitney back questions for I over at Mr. any showing the I'm

James Lico

and questions Bye-bye. finish to might of around I get Well, determination XX,XXX everyone, up year. Have your the We you, all it forward quarter all from day, follow but great it, think I'll appreciate season. for We the Thanks. have thank benefited and into and take We the time world. and earnings our support, always. continuing look hard as work with Alexander, we you Griffin, of appreciate any thanks, your from a the have tonight. to we employees the around great as a


participation. today's you conference and concludes this call. gentlemen, your Ladies Thank for

disconnect. may now You