Solventum Reports Third Quarter 2026 Financial Results
Solventum Corp (SOLV) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Solventum Reports Third Quarter 2026 Financial Results • R eported sales decreased 7.0%; organic sales decreased 2.8%, reflecting the expected 630 basis point (bps) impact of prior quarter advance orders placed ahead of the planned ERP system cutover during the curre
How this was made
The 30-second read
Why it matters
Guidance raise signals improved profitability, potentially driving the stock higher.
Market read
Earnings release with raised EPS guidance is a primary catalyst for the stock.
What to watch
Impact of ERP cutover and tariff refunds on cash flow may be temporary.
Reported sales decreased 7.0%; organic sales decreased 2.8%, reflecting the expected 630 basis point (bps) impact of prior quarter advance orders placed ahead of the planned ERP system cutover during the current quarter
Third-quarter sales and adjusted EPS declined year over year, but results were ahead of the company’s expectations, all segments contributed, ERP cutovers were completed, and Solventum increased its full-year adjusted EPS guidance.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 total net salesGAAP | $1.95B | – | (7.0) % |
| Q3 2026 organic sales growthnon-GAAP | (2.8) % | – | (2.8) % |
| Q3 2026 net sales of productGAAP | $1.43B | – | – |
| Q3 2026 net sales of software and rentalsGAAP | $518M | – | – |
| Q3 2026 gross profitGAAP | $1.06B | – | – |
| Q3 2026 GAAP gross marginGAAP | 54.5 % | – | – |
| Q3 2026 adjusted gross marginnon-GAAP | 57.1 % | – | – |
| Q3 2026 selling, general and administrative expensesGAAP | $813M | – | 4.2 % |
| Q3 2026 research and development expensesGAAP | $181M | – | (1.1) % |
| Q3 2026 operating incomeGAAP | $68M | – | – |
| Q3 2026 operating income marginGAAP | 3.5 % | – | (7,710) bps |
| Q3 2026 adjusted operating incomenon-GAAP | $387M | – | – |
| Q3 2026 adjusted operating income marginnon-GAAP | 19.9 % | – | (70) bps |
| Q3 2026 net income (loss)GAAP | −$12M | – | (100.9) % |
| Q3 2026 diluted earnings per shareGAAP | $(0.07) | – | (101.0) % |
| Q3 2026 adjusted diluted earnings per sharenon-GAAP | $1.45 | – | (3.6) % |
| Q3 2026 net cash provided by operating activitiesGAAP | $177M | – | 136.0 % |
| Q3 2026 free cash flownon-GAAP | $97M | – | 540.9 % |
| Nine months ended September 30, 2026 total net salesGAAP | $6.17B | – | (2.6) % |
| Nine months ended September 30, 2026 organic sales growthnon-GAAP | 2.9 % | – | 2.9 % |
| Nine months ended September 30, 2026 gross profitGAAP | $3.44B | – | – |
| Nine months ended September 30, 2026 GAAP gross marginGAAP | 55.9 % | – | – |
| Nine months ended September 30, 2026 adjusted gross marginnon-GAAP | 57.9 % | – | – |
| Nine months ended September 30, 2026 operating incomeGAAP | $329M | – | – |
| Nine months ended September 30, 2026 operating income marginGAAP | 5.3 % | – | (2,720) bps |
| Nine months ended September 30, 2026 adjusted operating incomenon-GAAP | $1.41B | – | – |
| Nine months ended September 30, 2026 adjusted operating income marginnon-GAAP | 22.8 % | – | 210 bps |
| Nine months ended September 30, 2026 net incomeGAAP | $93M | – | (93.8) % |
| Nine months ended September 30, 2026 diluted earnings per shareGAAP | $0.54 | – | (93.7) % |
| Nine months ended September 30, 2026 adjusted diluted earnings per sharenon-GAAP | $5.48 | – | 20.9 % |
| Nine months ended September 30, 2026 net cash provided by operating activitiesGAAP | $215M | – | (21.5) % |
| Nine months ended September 30, 2026 purchases of property, plant and equipmentGAAP | −$247M | – | – |
| Nine months ended September 30, 2026 free cash flownon-GAAP | −$32M | – | 23.8 % |
| Cash and cash equivalents as of September 30, 2026GAAP | $451M | – | – |
| Short-term borrowings and current portion of long-term debt as of September 30, 2026GAAP | $507M | – | – |
| Long-term debt as of September 30, 2026GAAP | $4.56B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Advanced Wound CareOrganic growth was 1.5%; constant currency growth was 8.7%, including a 7.2% Other impact. | $528M | – | 8.9 % |
| Infection Prevention and Surgical SolutionsOrganic growth was (5.7)% and constant currency growth was (5.7)%. | $683M | – | (5.3) % |
| MedSurgOrganic growth was (2.8)%; constant currency growth was 0.1%, including a 2.9% Other impact. | $1.21B | – | 0.4 % |
| Dental SolutionsOrganic growth was (7.4)% and constant currency growth was (7.4)%. | $317M | – | (6.7) % |
| Health Information SystemsOrganic growth was 4.4%; constant currency growth was 3.2%, including a (1.2)% Other impact. | $356M | – | 3.3 % |
| All OtherOrganic growth was (15.5)% and constant currency growth was (15.5)%. | $64M | – | (15.9) % |
Full-Year 2026 outlook
- RevenueOrganic sales growth toward the high end of +2.5% to +3.0% range (toward the high end of +3.5% to +4.0% excluding ~100 bps of SKU exit impact)
- NoteAdjusted EPS range of $7.20 to $7.30
- NoteFree cash flow in the range of $200 million to $300 million
Capital returns
- Purchases of treasury stock of $(403) million for the nine months ended September 30, 2026.
- Treasury stock, at cost, was $(403) million as of September 30, 2026.
What drove it
- The 2.8% Q3 organic sales decline reflected the expected 630 bps reversal of Q2 2026 advance orders placed ahead of the planned ERP system cutover during Q3 2026.
- GAAP and adjusted gross margin increased primarily due to portfolio optimization, mix benefits and savings programs, partially offset by inflation and tariffs.
- Adjusted operating income margin declined primarily due to the expected impact of Q2 2026 advance orders placed ahead of the planned ERP system cutover during Q3 2026.
- Solventum exited ~90% of 3M transition service agreements, and ERP system cutovers were complete.
- Advanced Wound Care received FDA 510(k) clearance for the combined use of Restrata and V.A.C. Therapy.
Concerns
- Reported Q3 sales decreased 7.0% and organic sales decreased 2.8%.
- Dental Solutions organic sales declined (7.4)% and Infection Prevention and Surgical Solutions organic sales declined (5.7)%.
- GAAP operating income margin decreased to 3.5% from 80.6%, primarily due to the prior-year gain on sale of the purification & filtration business and higher current-year restructuring costs.
- GAAP selling, general and administrative expenses increased primarily due to higher operating expenses associated with restructuring.
- Nine-month free cash flow was $(32) million despite Q3 free cash flow of $97 million.
What to watch
- Full-year organic sales growth is expected toward the high end of the +2.5% to +3.0% range.
- Full-year adjusted EPS guidance was increased to $7.20 to $7.30.
- Full-year free cash flow guidance remains $200 million to $300 million.
- Execution following the completed ERP system cutovers and continued exit from 3M transition service agreements.
- Progress on the planned separation of the Health Information Systems business, which is referenced in acquisition and divestiture-related costs.
Balance sheet and cash flow
- Cash and cash equivalents were $451 million as of September 30, 2026, compared with $878 million as of December 31, 2025.
- Short-term borrowings and current portion of long-term debt were $507 million and long-term debt was $4,561 million as of September 30, 2026.
- Nine-month net cash used in financing activities was $(401) million, including purchases of treasury stock of $(403) million.
- Nine-month net decrease in cash and cash equivalents was $(428) million.
- Q3 operating cash flow of $177 million and free cash flow of $97 million were ahead of expectations driven by IEEPA tariff refund.
Analysis
Solventum reported Q3 net sales of $1,949 million, down 7.0%, while organic sales declined 2.8%. The company attributed the organic decline to an expected 630 bps reversal of Q2 2026 advance orders placed before the Q3 ERP cutover. Growth was uneven across the portfolio: Advanced Wound Care revenue rose 8.9% and Health Information Systems rose 3.3%, while Infection Prevention and Surgical Solutions, Dental Solutions and All Other declined on a reported and organic basis.
Profitability showed an important divergence between GAAP and adjusted results. GAAP gross margin increased to 54.5% from 54.2%, while adjusted gross margin increased to 57.1% from 55.8%, supported by portfolio optimization, mix benefits and savings programs, partly offset by inflation and tariffs. GAAP operating income was $68 million and GAAP operating margin was 3.5%, compared with $1,690 million and 80.6% in the prior year, which included a gain on sale of the purification & filtration business. Adjusted operating income was $387 million and adjusted operating margin was 19.9%, down from 20.6%, primarily reflecting the ERP-related advance-order effect.
GAAP net income was a loss of $(12) million and diluted EPS was $(0.07), while adjusted diluted EPS was $1.45, down 3.6%. The reconciliation identifies $50 million of restructuring costs, $157 million of 3M spin-off and separation-related costs, and $16 million of acquisition and divestiture-related items in Q3. For the first nine months, adjusted diluted EPS increased 20.9% to $5.48, while GAAP results remained affected by the prior-year purification and filtration sale gain and current-year restructuring, separation, litigation and acquisition and divestiture-related costs.
Cash generation improved in the quarter, with operating cash flow of $177 million and free cash flow of $97 million, which the company said was ahead of expectations due to an IEEPA tariff refund. However, nine-month operating cash flow was $215 million versus $274 million and nine-month free cash flow was $(32) million. Cash and cash equivalents were $451 million at September 30, 2026, while short-term borrowings and current portion of long-term debt were $507 million and long-term debt was $4,561 million. The company also reported $(403) million of nine-month purchases of treasury stock.
Management raised adjusted EPS guidance to $7.20 to $7.30 from $7.10 to $7.20 and expects organic sales growth toward the high end of the +2.5% to +3.0% range. It affirmed free cash flow guidance of $200 million to $300 million. The guide and management commentary place emphasis on post-cutover sales normalization, continued margin expansion from portfolio, mix and savings initiatives, and cash-flow conversion in the remainder of the year.
Management, verbatim
Solventum delivered third quarter results ahead of our expectations, with every segment contributing, even as we completed our largest ERP cutover; we expect to be near the top end of our full-year organic sales growth range, and are raising our full-year adjusted earnings per share outlook.
Bryan Hanson, chief executive officer of Solventum
With separation now more than 90% complete and our growth drivers gaining momentum, we are well positioned to accelerate sales growth and expand margins. We have differentiated innovation, a strong pipeline of new products and a significant opportunity to expand penetration of our existing brands with customers we already serve.
Bryan Hanson, chief executive officer of Solventum
Not in the filing
stated, not guessed- Previous-release outlook section was not provided; therefore, no actual-versus-prior-guidance comparison is included.
- Q3 cash, debt and treasury-share repurchase amounts were not reported as standalone quarterly figures.
- Dividend amount was not reported.
- Forward guidance for revenue in dollars, gross margin, operating expenses and tax rate was not reported.
- Q3 and nine-month revenue and operating-income figures for Advanced Wound Care and Infection Prevention and Surgical Solutions were reported only as components of MedSurg; standalone operating income and operating margins for those subcategories were not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Solventum filed a Form 8‑K reporting Q3 2026 results and updated guidance.
Ticker impact
Solventum raised full-year adjusted EPS guidance to $7.20‑$7.30 in its Q3 2026 filing.
likely upside as the market prices in higher EPS expectations
The company reported a 7% revenue decline but increased full‑year EPS guidance, indicating margin improvement and confidence in future growth.
Market effects
Higher guidance may lift other advanced wound‑care and medical‑device peers.
Positive for US‑listed health‑technology stocks.
Limited to healthcare sector investors.
Counterpoint
Revenue decline and restructuring costs could pressure margins despite EPS raise.
Key entities
- CompanySolventum Corp
Medical‑device and wound‑care manufacturer.
