Industrial technology company Fortive (NYSE:FTV) beat Wall Street’s revenue expectations in Q3 2026, with revenue up 7.8% year on year to $1.11 billion. Its non-GAAP profit of $0.77 per share was 9.4% above analysts’ consensus estimates.

For more on Fortive, read the full research report for free.

“Q3 was another quarter of strong and accelerating performance for Fortive. We delivered over 7% core growth, approximately 10% adjusted EBITDA growth, and 13% adjusted EPS growth, representing our fifth consecutive quarter of double-digit adjusted EPS growth. We are executing our Fortive Accelerated strategy and continue to see growing evidence that our investments in innovation acceleration, commercial acceleration, and recurring customer value are contributing to faster revenue growth and strong financial performance,” said Olumide Soroye, President and CEO.

Revenue growth

A company’s long-term performance is an indicator of its overall quality. Any business can deliver a good quarter or two, but many enduring ones grow for years. Fortive struggled to consistently generate demand over the last five years as its revenue dropped at a 3.3% annual rate, falling short of our standards and suggesting poor business quality.

Long-term growth matters most, but within industrials, a half-decade historical view may miss cycles, industry trends or a company capitalizing on catalysts such as a new contract win or a successful product line. On the positive side, Fortive’s annualized revenue growth of 4.3% over the last two years is above its five-year trend.

This quarter, Fortive reported year-on-year revenue growth of 7.8%, and its $1.11 billion of revenue exceeded Wall Street’s consensus estimates by 3.3%.

Looking ahead, sell-side analysts expect revenue to grow 1.9% over the next 12 months, according to S&P, a slight deceleration versus the last two years. This underwhelming projection suggests its products and services will face some demand headwinds.

Operating margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products and keeping them relevant through research and development.

Fortive has performed well over the last five years. It demonstrated strong profitability for an industrials business, with an average operating margin of 17%. That outcome is unsurprising given its favorable gross margin baseline.

Analyzing the trend in its profitability, Fortive’s operating margin rose by 3.8 percentage points over the last five years, showing its efficiency has improved.

This quarter, Fortive generated an operating margin of 21.3%, up 5.8 percentage points year on year. The increase was solid, and its operating margin rose more than its gross margin, indicating greater efficiency in expenses such as marketing, R&D and administrative overhead.

Earnings per share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Fortive’s EPS grew at a 3.3% compounded annual growth rate over the last five years. On the positive side, this performance was better than its 3.3% annualized revenue declines, indicating that management adapted its cost structure in response to a challenging demand environment.

We can take a deeper look into Fortive’s earnings to better understand the drivers of its performance. As we mentioned earlier, Fortive’s operating margin expanded by 3.8 percentage points over the last five years. On top of that, its share count shrank by 16.1%. These are positive signs for shareholders because improving profitability and share buybacks boost EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Fortive, its two-year annual EPS declines of 8.4% show it’s continued to underperform. These results were poor.

In Q3, Fortive reported adjusted EPS of $0.77, up from $0.68 in the same quarter last year. This print beat analysts’ consensus estimates by 9.4%. Over the next 12 months, Wall Street expects Fortive’s full-year EPS to grow 2% from $3.11 to $3.17, according to S&P.

Key takeaways from Fortive’s Q3 results

Fortive delivered a solid quarter, with EBITDA well above analysts’ consensus estimates and full-year EPS guidance ahead of Wall Street’s consensus. Shares rose 4.7% to $64.50 immediately after the report.

Fortive had a solid quarter, but one earnings result doesn’t necessarily make the stock a buy. The latest quarter is only one piece of the longer-term business quality picture. Quality, combined with valuation, can help determine whether the stock is a buy. For more on Fortive, read the full research report here (it’s free).