SOLV · Q2 2026 Earnings

Bullish

Solventum

Reported August 5, 2026

30-second summary

Solventum delivered Q2 organic sales growth of +9.5% (reported +2.2% on the PNF divestiture) and non-GAAP EPS of $2.55, a 33.5% beat vs. the $1.91 consensus, driven by the $100M+ pull-forward flagged last quarter ahead of the Q3 U.S./Canada ERP cutover. Management raised FY2026 adjusted EPS to $7.10–$7.20 (from $6.40–$6.60, a $0.65 midpoint lift), lifted organic sales growth to +2.5–3.0% and FCF to $200–300M — but simultaneously withdrew the operating margin (prior 21.0–21.5%) and effective tax rate (prior 19.5–20.5%) guides without commentary. The clean read: EPS is running well ahead, but the removal of margin and tax framing on the same print reduces the transparency needed to model whether Q3 gives back what Q2 pulled forward.

Headline numbers

EPS

Q2 FY2026

$2.55

Revenue

Q2 FY2026

$2.21B

+2.2% YoY

+2.3% vs est.

Gross margin

Q2 FY2026

60.1%

Free cash flow

Q2 FY2026

$0.14B

Operating margin

Q2 FY2026

28.4%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$2.21B	$2.16B	+2.2%	$2.01B	+10.1%
EPS	$2.55	$1.69	+50.9%	$1.48	+72.3%
Gross margin	60.1%	54.4%	+570bps	54.6%	+550bps
Operating margin	28.4%	9.9%	+1850bps	4.0%	+2440bps
Free cash flow	$0.14B	$0.06B	+144.1%	$-0.27B	+152.7%

Guidance

Solventum raised full-year FY2026 EPS guidance by 9% midpoint and lifted organic sales growth range, reflecting strong Q2 beat and increased confidence in H2 execution; however, operating margin and tax rate guidance were quietly withdrawn.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted EPS	FY2026	$6.40 to $6.60	$7.10 to $7.20	+$0.50 to $0.60 (7.6% to 9.4% increase)	Raised
Organic Sales Growth	FY2026	+2.0% to +3.0% (+3.0% to +4.0% excluding ~100 bps SKU exit)	+2.5% to +3.0% (+3.5% to +4.0% excluding ~100 bps SKU exit)	+0.5 pts to core range; +0.5 pts to SKU-adjusted range	Raised
Free Cash Flow	FY2026	~$200M	$200M to $300M	+$0 to $100M (0% to 50% upside vs prior point estimate)	Raised
Operating Margin	FY2026	21.0% to 21.5%, an increase of 50 to 100 basis points over prior year	Withdrawn — no replacement	—	Withdrawn
Effective Tax Rate	FY2026	19.5% to 20.5%	Withdrawn — no replacement	—	Withdrawn
Foreign Exchange Benefit	FY2026	Approximately 100 basis points on sales growth	Withdrawn — no replacement	—	Withdrawn

Segment KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
MedSurg	$1.372B	$1.218B	+12.6%
Advanced Wound Care	$0.537B	$0.467B	+15.0%
Infection Prevention and Surgical Solutions	$0.836B	$0.75B	+11.5%
Dental Solutions	$0.396B	$0.338B	+17.2%
Health Information Systems	$0.354B	$0.339B	+4.4%
MedSurg Organic Growth	8.9%	—	—
Dental Solutions Organic Growth	15.2%	—	—
Health Information Systems Organic Growth	5.4%	—	—

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Organic Sales Growth	9.5%	—	—
Adjusted Operating Margin	28.4%	—	—
Adjusted Diluted EPS Growth	50.9%	—	—
Operating Cash Flow	$227M	—	—
FY2026 Guidance: Organic Sales Growth	+2.5% to +3.0%	—	—

Management tone

Q1 FY2025 separation-survival → Q2 FY2025 ownership-and-raise → Q3 FY2025 execution-with-divestiture-noise → Q4 FY2025 LRP-acceleration-with-margin-pivot → Q1 FY2026 LRP-inevitability-and-portfolio-firepower → Q2 FY2026 separation-story-with-narrowed-disclosure.

The narrative has shifted from "when, not whether" on the LRP to "proposed separation" and "more focused, dedicated MedTech company" as the strategic anchor. Two quarters ago the CEO's headline was that the LRP "might land this year." This quarter's press-release language reframes the whole company around a proposed separation event, positioning growth and margin expansion as beneficiaries of portfolio refinement. The forward posture is more confident, but the referent has changed from operational execution to structural transformation — a meaningful shift in what management is asking investors to underwrite.

The withdrawal of operating margin guidance without accompanying commentary is the most consequential tonal signal on the print. Q4 FY2025 introduced 21.0–21.5% as a load-bearing anchor for the LRP-acceleration story ("+50–100bps of margin expansion absorbing doubled tariffs"). Q1 FY2026 reaffirmed it. This quarter it disappears, on a Q2 that printed 28.4% and would suggest the range was conservative. The absence of a replacement number — rather than a raise — is the signal: either mix is genuinely unpredictable ahead of the Q3 ERP cutover and 2H tariff annualization, or management is preserving optionality for a downside quarter. Neither reading pairs comfortably with the "more focused, dedicated MedTech" confidence framing.

Transient-headwind language ("separation costs and P&F divestiture headwinds mostly complete in 2026") also dropped from this quarter's press-release framing, replaced with forward-looking confidence statements. That is a genuine shift: management is telegraphing that they view the operational base as clean enough that one-time-item framing is no longer necessary. Whether the Q3 reversal validates that view is the immediate test.

Answers to last quarter's watch list

Q2 reported organic print net of the $100M+ pull-forward. Q2 reported organic came in at +9.5%, meaningfully above both the +6% and +7% thresholds set. Backing out an estimated ~460–500bps pull-forward benefit (based on $100M+ on a ~$1.97B ex-PNF 2025 base) implies underlying organic of ~+4.5–5%, which is materially stronger than Q1's +2.1% and above the FY range's high end. Even the conservative reading of the pull-forward math points to real underlying acceleration, not just optical benefit.

Resolved positively

Q3 IPSS and Dental segment prints. Not yet observable — Q3 is the print where the pull-forward reversal lands, so this remains a Q3 watch item. Management did not pre-frame Q3 segment expectations in the Q2 press release. The absence of a Q3 mix warning on a raised FY EPS guide is itself notable — it either signals confidence that the reversal is manageable or defers the mix conversation to the earnings call.

Continue monitoring

2H FCF cadence to reach the ~$200M FY guide. Q2 FCF was $144M; combined with Q1's -$273M, 1H FCF is -$129M. To hit the raised $200–300M FY range, 2H needs to generate $329–429M — heavier than any post-spin 2H cadence. Management raised the range on this print, which reads as confidence in the 2H cadence, but the math is now more demanding than the ~$200M point-estimate implied.

Continue monitoring

HIS organic above +5%. HIS printed +5.4% organic, clearing the bar for the first time since Q3 FY2025. The autonomous-coding adoption-curve narrative gets a data point that supports the 50%-of-customers migration target. One clean quarter above the bar isn't a trend, but the direction is right.

Resolved positively

MedSurg operating margin recovery. MedSurg segment operating margin printed 25.8% in Q2 (vs. 17.3% in Q2 FY2025), a sharp recovery alongside organic acceleration to +8.9%. The consolidated Q2 adjusted operating margin of 28.4% is well above Q1's 19.5%, but the Q2 print is inflated by ERP-timing benefit and IEEPA tariff refund per management's own disclosure. Status: Resolved positively, with caveat

Second tuck-in M&A announcement and/or buyback pace disclosure. No second tuck-in was announced with the Q2 print. The proposed separation announcement — the dominant strategic disclosure of the quarter — pushes M&A narrative into the background and complicates capital allocation framing. The "target-rich environment" rhetoric of Q1 has effectively been superseded by structural repositioning.

Not resolved

What to watch into next quarter

Q3 reported organic net of the pull-forward reversal. The Q3 print is the most consequential number of the year. A reported organic print of -3% to -5% (implying the ~460–500bps reversal against underlying ~+1–2%) is the mechanical baseline; anything above -2% suggests underlying acceleration is real, anything below -6% suggests Q2's underlying run was itself pull-forward-inflated.

Whether operating margin guidance is reinstated for FY2026. The withdrawal on Q2 is either tactical (preserving optionality ahead of Q3 mix) or structural (management no longer wants to anchor the range). Reinstatement in Q3 above 21.5% would confirm the withdrawal was conservative-guidance discipline; silence would confirm the disclosure surface has genuinely narrowed.

Proposed separation details. The Q2 press release introduces the "proposed separation" of the Health Information Systems business without transaction structure, timing, or perimeter. First formal disclosure of what the separation entails — cost, timeline, and structure — will define FY2027 modeling.

HIS sustainability above +5%. Q2's +5.4% is one data point above the bar. A Q3 HIS organic print above +5% (with no ERP tailwind, since HIS is unaffected) would confirm the autonomous-coding adoption curve is inflecting.

2H FCF cadence. Q3 FCF against the $329–429M 2H requirement is the credibility check on the raised range. A Q3 print below $100M would leave Q4 to generate $200M+ on its own — plausible but heavily back-end weighted.

Whether adjusted EPS 2H math implies conservatism or Q3 give-back. 1H EPS of $4.02 vs. FY guide midpoint of $7.15 implies 2H at $3.13, roughly 78% of the 1H run-rate. The Q3 print will show whether the implied 2H step-down is real Q3-only weakness (pull-forward reversal + tariff step-up) or FY conservatism carried through the raise.

Sources

Solventum Q2 FY2026 Form 8-K Exhibit 99.1 (press release) — https://www.sec.gov/Archives/edgar/data/1964738/000196473826000045/q22026-8kerexx991.htm
Solventum Q1 FY2026 Tapebrief (prior-quarter watch list, pull-forward disclosure, and guidance baseline)
Solventum Q4 FY2025 Tapebrief (FY2026 guidance origin and margin/tax anchors now withdrawn)
Solventum Q3 FY2025 Tapebrief (segment trajectory and FCF context)

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