My name is Emma, and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to the Fortive Corporation's Q1 2022 earnings results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. I would now like to turn the call over to Ms. Elena Rosman, Vice President of Investor Relations. Ms. Rosman, you may begin your conference. Thank you, Emma, and thank you everyone for joining us on today's call. With us today are Jim Lico, our President and Chief Executive Officer, and Chuck McLaughlin, our Senior Vice President and Chief Financial Officer. We present certain non-GAAP financial measures on today's call. Information required by Regulation G are available on the investor section of our website at www.fortive.com. Our statements on period-to-period increases or decreases refer to year-over-year comparisons on a continuing operations basis. During the call, we will make forward-looking statements, including statements regarding events or developments that we expect or anticipate will or may occur in the future. These forward-looking statements are subject to a number of risks, and actual results might differ materially from any forward-looking statements that we make today. Information regarding these risk factors is available in our SEC filings, including our annual report on Form 10-K for the year ended 31 December, 2021. These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements. With that, I'd like to turn the call over to Jim. Thanks, Elena. Hello, everyone, and thank you for joining us. I'll begin on slide three. I'm extremely proud of how our teams have come together to navigate the continued challenging environment and deliver an outstanding quarter with better than expected revenues, earnings, and cash flow. Our strong purpose-driven culture supported our relentless focus on executing for customers, shareholders, and each other while facing unpredictable obstacles. Despite these challenges, we saw record orders growth across several of our businesses, reflecting continued demand for our leading connected workflow solutions. Hardware orders grew 14%, adding approximately $130 million to backlog. Our software-enabled businesses grew mid-teens, with double-digit growth in both our SaaS and licensed revenue streams. Through the rigorous application of the Fortive Business System, we continue to deliver improvement across our businesses, driving greater visibility and assurance of supply in the quarter. Our teams also worked hard to overcome higher inflation, which resulted in 60 basis points and 30 basis points of growth and operating margin expansion, respectively, 11% EPS growth, and 36% free cash flow growth in the quarter. Overall, the momentum across all three of our segments in the Q1 sets a strong foundation for the year ahead and reinforces our confidence in our full year 2022 outlook. Turning to slide four. I wanted to provide an update on what we are seeing and what we expect over the remainder of 2022. Starting on the left in the current environment, strong orders growth was driven by accelerated innovation, continued share gains, and leverage to favorable secular drivers spanning all geographies and end markets, yielding an 18% increase in hardware backlog in the quarter. Our continuity of supply is improving, driven by daily management and conversion obeyas, allowing us to ship more product in Q1 than initially planned. Our China teams did a great job mitigating the intermittent government-mandated COVID lockdowns across the region, starting in Tianjin in January. The Shanghai lockdown at the end of March impacted shipments by approximately $20 million in the quarter, primarily at Tektronix. With operations restarting, we expect to face some bottlenecks in supply chain. However, our teams will be relentless and work to ramp quickly. Moving to the right-hand side of the slide, we expect sustained core growth driven by normal seasonality, continued strong customer demand, and record backlog, which gives us a tailwind for growth again in 2023. Combined with pricing and operational performance, we expect strong margin expansion and another year of double-digit earnings and cash flow growth. As Chuck will cover in more detail shortly, we are updating our outlook to reflect the strong start to the year, raising the low end of our guidance for the year. Lastly, our ability to convert more earnings to cash underpins our investment thesis and allows us to reinvest in our businesses, accelerate our strategy, and enhance our returns to shareholders. In the Q1, we took the opportunity to buy back approximately one million shares, totaling $64 million. The M&A pipeline remains full with hardware and software opportunities across each of our segments, and we estimate M&A capacity of approximately $5 billion over the next three years. Moving to slide five. Our leading connected workflow solutions facilitate transformation across high-impact fields like workplace safety, facilities management, product development, and healthcare. Our strategies across these segments is incredibly powerful. We serve customers ranging from technicians and facilities managers to engineers, product developers, and healthcare professionals who all work in challenging environments where Fortive technologies provide higher quality instrumentation, better sensors, superior software, and real-time data analytics to empower them to do their jobs more safely and more efficiently. As you can see, each segment is well positioned to benefit from favorable secular tailwinds and durable business models that underpin our strategy and vision to build a stronger collection of businesses with industry-leading profitability and free cash flow margins. I'll now provide some details on each of the three segments, beginning with Intelligent Operating Solutions on slide six. IOS had a terrific start to the year as customer demand for maintenance, uptime assurance, environmental health and safety, and facility planning solutions all contributed to double-digit orders growth and strong revenue growth in the quarter. Total revenue was up 15%, with core growth of 8.7%. This included approximately mid-teens core growth in North America and high single-digit growth in Western Europe, more than offsetting a low 20% decline in China. Our FPS countermeasures to improve assurance of supply are making progress, mitigating the effects of the COVID lockdowns and driving better core growth in the quarter. We continue to see solid price realization, which we expect to further benefit performance in the Q2 and the remainder of the year. While our countermeasures enabled us to ship more product, we also incurred additional costs from elevated freight and logistics expenses. As a result, core operating margins were flat year-over-year, despite price cost being positive on a dollar basis. IOS adjusted operating margins were 27.2%, down 145 basis points due to the dilutive impact of the ServiceChannel acquisition. As a reminder, ServiceChannel's margins are ramping nicely in line with expectations, and IOS core margins are up over 200 basis points on a two-year stack basis. Some other highlights in the quarter include record revenue and bookings of Fluke, supported by strong point of sale, particularly in the US, where point of sale grew mid-teens. Industrial Scientific continues to make progress diversifying its business, with nine out of the 10 largest Q1 deals booked with new customers outside of oil and gas. Intelex has also seen strong demand for its SaaS solutions, continuing to grow at a healthy double-digit pace. Likewise, we saw record core growth in facilities and asset lifecycle management in the quarter, where Accruent had a solid start with mid-single-digit growth and is on track for sales acceleration in the second half. Gordian generated strong double-digit growth and secured a large data win with the US Army Corps of Engineers. Further, ServiceChannel had a strong double-digit revenue growth and record bookings in the quarter as customers continued to outsource their facilities maintenance work. Turning now to slide seven in Precision Technologies, we saw record customer demand driving double-digit order growth across major geographies and a broad set of end markets, including HVAC, aerospace & defense, automotive & electric vehicles, and semiconductors. PT revenues grew 3.4%, with core revenue growth of 4.6%. High single-digit growth in North America and Western Europe was partially offset by a low double-digit decline in China, driven by COVID related lockdowns in Shanghai at the end of the quarter. As a reminder, Tektronix operates a major manufacturing facility in Shanghai, which shut down in the last week of March. The impact was approximately $15 million of PT revenues or 350 basis points of growth, which also impacted their margin performance in the quarter. That said, PT operating margins expanded 30 basis points, reflecting over 50 basis points of gross margin expansion, partially offset by continued investments in new product development. Some highlights of the quarter include successful new product launches, driving incredibly strong order growth at Tektronix, including the refresh of the Five series in the Q1, which is tracking solidly above plan. Sensing also saw low double-digit top-line growth, reflecting solid share gains across its key markets and had over 100 basis points of operating margin expansion in the quarter, staying well ahead of inflation. Moving now to slide eight in Advanced Healthcare Solutions. AHS continues to accelerate innovation and digitization in hospitals and ASCs. With custom and clinically superior workflow solutions, AHS is well positioned for a multiyear recovery in healthcare. Revenue increased 8.5% in the Q1, with core revenue growth of 0.6%. Mid-single-digit growth in North America was largely offset by a low single-digit decline in China due to the impact of COVID restrictions on ASP and a high single-digit decline in Western Europe as expected. AHS operating profit margins benefited from FBS-enabled productivity initiatives, driving core margin expansion at ASP, as well as the accretive benefit of the Provation acquisition, partially offset by lower volumes at Invetech. Some highlights of the quarter include elective procedures in North America were roughly in line with expectations in the Q1. As a reminder, we expect electives to continue to improve and average 88% of pre-COVID levels for the year. We saw approximately 20% growth in the CensiTrac SaaS offering at Censis and an approximate doubling of subscription orders in the quarter. Provation secured several significant orders in the Q1 including four competitive GI wins and a large 20 hospital network win for its iProcedures anesthesia solution. Execution in an otherwise challenging and uncertain environment is one example of how FBS continues to be an important differentiator for Fortive. As shown on slide nine, FBS enabled our businesses to enhance supply chain resilience, drive innovation and profitable growth across the portfolio, and build skills and capabilities in our leaders to effectively deliver on our commitments in the quarter. Examples include. An improvement in unit output and reduction in supply chain risk at Fluke through the use of daily visual management, allowing them to outperform the quarter. The execution of lean portfolio management at Tektronix, driving several new customer-driven product launches in the coming quarters. Value pricing and price leakage tools driving strong price realization at Sensing Technologies. Substantial margin expansion at ASP from broad cost reduction more than offsetting lower consumable volumes in the quarter. Daily management and problem-solving drove an improvement in working capital turns at Fortive China. Several examples of our progress in our software businesses, including incremental growth realization at Accruent from improved uplift on renewals, a 20% improvement in time to first revenue for procurement customers at Gordian, and an acceleration of growth opportunities at Provation. As you heard me say before, I'm incredibly proud of the work we've done continuing our progress towards building a more sustainable future, as you can see on slide 10. Fortive's commitment to sustainability started on day one when we developed aspirational and actionable targets and subsequently invested significant time, energy, and talent to establish a performance-driven program. This timeline reflects the evolution of our program and commitments we have made since 2016. In early June, we will publish our fifth sustainability report reflecting consistency and progressing levels of transparency, including adherence to the GRI reporting framework and completing our first CDP Climate Change Disclosure in 2020. Adding the SASB reporting standard to enhance our climate-related disclosure to investors in 2021. New in 2022, we will provide our first UN Global Compact statement of progress to find our status and plans for TCFD-aligned disclosure and offer initial Scope three emissions data and Scope two market-based emissions in our CDP climate change disclosure. It is our shared purpose that also pushes us to create innovative and sustainable products and services for our customers, trying to solve some of the world's biggest sustainability challenges. For example, Intelex, leading software solutions for EHS and sustainability managers, serves leading Fortune 500 companies across multiple industries. In fact, our EHS and sustainability teams use the Intelex application to manage and drive continuous improvement of our greenhouse gas emissions accounting in accordance with the GHG Protocol. Fluke's diverse range of products provide solutions that advance workplace health and safety, as well as optimization of renewable energy installations for our customers. Consistent with our culture, we are driving incremental improvements in sustainability, and we look forward to continued progress in the years to come. With that, I'll pass it over to Chuck, who'll provide more color on our Q1 financials and our Q2 and full year 2022 outlook. Thanks, Jim, and hello, everyone. I will begin on slide 11 with a quick recap of our Q1 performance. We generated year-over-year total revenue growth of 9.3%, core growth of 5.3%. Acquisitions net of FX were as expected, contributing four points to total growth. Turning to the right side of the slide. Jim covered the segment highlights earlier, and I wanted to provide some additional color on the regions. North America revenue was up high single-digit, including low-teens growth in software and related services, partially offset by lower consumable volumes at ASP. Western Europe revenues grew mid-single-digit, more than offsetting year-over-year declines in Advanced Healthcare Solutions driven by a difficult COVID-related compare at Invetech. That said, we had good growth at ASP despite capital installs delays in the region. We had low double-digit growth in Asia outside of China, while China revenues declined low teens, driven by the impact of the COVID-related lockdowns. Note that we continued to build backlog in China with high teens order growth in the Q1 thus reinforcing our outlook for double-digit revenue growth for the remainder of the year. On slide 12, we show operating performance highlights for the Q1. Adjusted gross margins were 57.6%, increasing by 60 basis points year-over-year, while adjusted operating margins increased to 23% in line with our guidance. We realized over 300 basis points of price in the quarter, more than offsetting inflation, yielding 30 basis points of core operating margin expansion and 250 basis points on a two-year stack. Adjusted earnings per share increased 11% to $0.70, while free cash flow generation of $196 million represented a stronger than normal conversion of adjusted net income in the Q1. The strong free cash flow performance included an improvement in the timing of receivables collections, representing a normalization of the trends we saw in the Q4. Turning now to the guide on slide 13 and starting with the Q2. We expect low- to mid-single-digit core revenue growth, which includes a headwind of approximately $40 million from the COVID-related government shutdowns in Shanghai, which we expect to subside in mid-May. Adjusted operating profit margins are expected to be up at least 80 basis points year-over-year. Adjusted earnings per share of $0.70 to $0.73 assumes a 15% tax rate in the quarter. Free cash flow conversion of adjusted net income is expected to increase to approximately 100%. For the full year 2022, we are raising the low end of our revenue guidance by $40 million to reflect a strong start to our year. We continue to expect adjusted operating profit margins for the full year to be up over 100 basis points. Adjusted EPS is now in the range of $3.04 to $3.13, up 11% to 14%, and free cash flow conversion of approximately 105% for the full year. Moving to slide 14. We are expecting a 48 to 52 split of revenue first half to second half, which represents a step up of approximately $255 million of revenue and includes favorable price and FX first half to second half, in addition to higher volume supported by our robust backlog position and the work we've done to mitigate supply chain constraints across our portfolio. We also expect to recover lost China volumes as a result of the government-mandated lockdowns in the first half, shifting more revenue to the second half. Incremental margins on sequential volume are expected to flow through at attractive levels, contributing to strong margin performance in the second half. In summary, our portfolio continues to show the benefits of the actions we have taken to build a more durable growth company with high recurring revenue profile, mitigating the risk of slowing demand in the second half. With that, I'll pass it back to Jim for some closing remarks. Thanks, Chuck. I'll now start to wrap up on slide 15. Over the last six years, we have articulated a portfolio strategy to build a more resilient, less cyclical business capable of outperforming in even the most difficult of times. The Fortive portfolio today is a reflection of how well we've executed that playbook. Our acquisitions have added approximately $2.3 billion of revenue to Fortive as of 2022, which is expected to grow low double digits this year. In doing so, we've doubled the through-cycle core growth of the company versus the time of the spin-off from Danaher in 2016. We have also more than doubled recurring revenue as a percentage of our total revenue to approximately 40% and built a portfolio of software-enabled workflow solutions, which is approaching $1 billion of revenue and continues to enhance our long-term competitive advantage. In addition, the businesses we have added to Fortive have been an important contributor to the more than 1,000 basis points of gross margin expansion that we have driven since 2016. In short, the Fortive of today is delivering higher and more profitable growth, and there's nowhere that this shows up more than in our free cash flow. Lastly, on slide 16, that strong free cash flow, which has nearly doubled since 2019, continues to be a hallmark of our investment thesis, compounding faster than revenue and earnings and allowing us to accelerate growth and compound returns through disciplined capital deployment. 2022 is off to a great start as the outperformance in Q1 reinforces our focus on sustained growth and execution. Leveraging the power of FBS, which will always be a part of who we are and how we do what we do, we expect another year of double-digit earnings and free cash flow growth on track to deliver on the multiyear targets set last year with differentiated growth and profitability among our industry peers. As a result, we're confident the work we do to create long-term sustainable competitive advantages for our operating companies and strategic segments will yield best-in-class returns for Fortive for a long time to come. With that, I'll turn it back to Elena. Thanks, Jim. That concludes our formal comments. Emma, we are now ready to take questions. At this time, I would like to remind everyone, in order to ask a question, press star and the number one on your telephone keypad. In a moment, we ask that you limit yourself to one question and one follow-up. Thank you. Your first question today comes from the line of Steve Tusa with JP Morgan. Your line is now open. Hey, good morning or whatever it is. Steve. Over here. Yeah, it's kind of afternoon over here. Within kind of the businesses that are most exposed to China, you know, what are you seeing there in kind of the you know, just the ground level economy? Not necessarily like the shutdown dynamic, but what are you seeing outside of the shutdowns, and what is your kind of order pace and backlog look like over there? Yeah, Steve, it's Jim. First of all, I think commercially, we think the business had a very good quarter. Orders were up double-digit in the quarter. Despite the shutdowns that, you know, started in various cities at the beginning of the quarter, we really didn't see a lot of impact relative to our commercial activities. Point of sale still good throughout the quarter. From a commercial perspective, you know, we pivoted, like, as an example, when we had to have folks work from home. You know, we did that in 2020, so that was an easy process. The real impact was really just to the manufacturing facility in Shanghai that we described in the prepared remarks. It was really not really a commercial issue relative to commercial activity, really just a function of the fact that our factory, the Tek factory, as well as our Industrial Scientific factory were shut down, and our logistics providers were shut down as well. Right. I guess, Can you maybe talk about have you guys done any, you know, analysis around what if we went into kind of a mild global recession, what would be kind of the algorithm for you guys? What you think your core would do, you know, how you would defend earnings? I mean, I think there's obviously a lot of concern around recession out there. You guys get bucketed in this kind of short cycle industrial camp for some reason. Maybe talk about what you would kind of any leverage you could pull to mitigate the cyclicality that's inherent in the business. Well, I think number one, in the short run, given our backlog position, we would be in very good shape. As an example, if we saw the sort of a slowdown some businesses saw in 2019, you know, we would weather that storm with the backlog without an issue. We would just dip into the backlog more than we anticipate in this guide. In that sense, we've got much more of an insurance policy going into the second half. More broadly, as you remember, I think even when we see something more dramatic like we did in Q2 of 2020, you know, we had outstanding free cash flow then. We had obviously protected our gross margins extremely well, and with a high gross margin number, we can, you know, we can flex expenses pretty well in the medium term, which we demonstrated in 2020. I think those are some of the levers. Then the last thing would just be we'd lean on the 40% of recurring revenue in the healthcare side of the business, which, you know, we're gonna be in a healthcare resurgence here, I think, because of COVID, and it's really not gonna be economically impacted. It's really gonna be all the things we've described, and I'm sure we'll talk a little bit more about. I think, you know, we certainly don't want a recession in any way, shape, or form, but I think we've built the portfolio for the last five or six years with anticipation that inevitably something like that might happen, and we'd be far more resilient relative to our business model in which to be able to handle a situation like that. Right. Great. Thanks a lot. Thanks, Steve. Your next question comes from the line of Julian Mitchell with Barclays. Your line is now open. Hi, good afternoon. Hey. Hey. Maybe just the first question, trying to drill into the adjusted operating margin. You know, I guess looking sequentially, you know, revenues were flattish in Q1. You had a big margin dip sequentially. You're assuming a pickup sequentially in Q2, even with the China headwind getting worse. Or looking at it year on year, you know, you're looking for a bigger acceleration year on year in Q2 than Q1, again, even with that China headwind. Maybe help me understand the sort of confidence on margins, particularly as I think you only came in line with the initial guide for Q1. Yeah. Julian, you know, a couple of things. First of all, the revenues were flat from Q4 to Q1, but really there was, we brought on ServiceChannel that didn't have the same. I'm sorry, Provation, I mean, into that mix. When you look at Q1 to Q2, I think that there's merits and things that come in, but Q2's margins are up 80 basis points over the prior year and really showing those 40% incrementals in Q2. As we move through the year, we see more revenue coming through, not even having it, you know, having it come through probably around 50% incremental margins on the step-up in volume, plus things like the ServiceChannel and, you know, the margins will increase as we go through the year and also probably get a little bit more consumables. We expect to have more consumables in the second half. All these things build towards that margin expansion. Having said that, you know, in a tough environment, 23% in line operating profit margins for Q1 is up 30 basis points, and given everything that went on, we feel very good about where the start to the year. Thank you. Just, you know, wanted to discuss sort of how you're thinking about your orders in the current quarter. I think you called out Jim, you know, hardware orders overall at 40 were up 14% in Q1, even including strength in China there. You know, I wondered how you're thinking about the resilience of that order intake in the current quarter and whether you've seen anything change, for example, in terms of, you know, European demand yet. You know, what's interesting, Julian, is European orders were good. I would say, but I think as we look around the world, and I'll stick to the orders or order question, obviously continued improvement in orders. I like the fact that when we look at things like US POS for Fluke and Tech as an example, that those numbers were in line with POS. Our order growth was pretty close to our sales out. You know, I think we feel very good about the durability of the order pattern at this point. You know, the numbers are slow on a real basis simply in the second half, simply because of the two-year stack and things like that. I think if you look at the progression of strength, it remains there. We saw a little bit of advanced buying at Fluke for some ahead of a price increase. There's a little bit of that. But that's all inherent in our guide, and I think you know we built, as we said, $130 million in backlog. I think when you really look at it, the durability's good. Some of the order strength in sensing was advanced ordering for the second half. We saw some large customers who put in their orders for the second half. I think we have a good sense of what's advanced ordering and what's really real-time demand, and we base that against a number of the things that we're looking at. Channel inventories are in pretty good shape. A little bit of elevation, but not anything that we would be alarmed, certainly within the band of what they'd typically be at. I think on balance, we, you know, when we look at the hardware businesses, we're certainly looking for signs of things that might suggest a slowdown or anything like that. I think thus far, we've yet to see that and feel good about the backlog situation that we're in and our ability to sort of deliver on that. If the order rate were to go down, as an example, like I said on Steve's question, if the order rate were to go down in the second half, then we would just dip into the backlog, which in the current guide is we're not planning to do much of. Great. Thank you. Thank you. Your next question comes from the line of Andrew Obin with Bank of America. Your line is now open. Oh, yes, good morning. Hi, Andrew. Hey, just looking at the slide 14, you know, you seem to be embedding high throughput in volume, just shipping more hardware and, you know, looking at the progress from Q4 to Q1, can you just talk about some tangible steps that enables you to achieve this, if you could share on this? Is it just more supply chain clearing or the countermeasures that you are taking? But just maybe dig in a little bit more as to what is allowing you to sort of actually finally get the volume out of the system. Thank you. Yeah. Thanks, Andrew. I think number one is, you know what we saw in the quarter were some nice examples of getting after a number of the things relative to some of the supply chain constraints that we've described, obviously, for a few quarters here. To be just consistent with what I've said pretty much for the last nine months, we really never anticipated that supply chain issues would go away in 2022. What we anticipated and what I think we saw in the quarter and we'll continue to see is the impact of our countermeasures. You know, you saw that at Fluke with their growth rate as one example. Certainly, Sensing Tech performance in the quarter, which was outstanding both on the top line and bottom line, is another good example of that. Quite frankly, we would have seen more of that at Tektronix if it hadn't been for the shutdown in Shanghai in the last week. A number of examples of progress in the quarter relative to those challenges. Not from a lack of challenges, but just the power of FBS to countermeasure those challenges. We'll continue to see that as the year progresses. As you mentioned, some of the things that'll provide that volume in the second half, some of that is just kind of normal seasonality. We just tend to see things go out a little bit more in the second half. Some of that is US government buying in the Q3. Some of it is year-end stuff, so some of it's inherent in that. We're gonna see consumables get better, elective procedures get better. We'll see ACV growth continue to sequentially improve in our software businesses. As I described, we'll see some continued improvement at Fluke and at Sensing Technologies, which I think we demonstrated in the Q1 and we'll continue to demonstrate through the remaining part of the year and into 2023. Just a follow-up question, and perhaps it's a conjecture on our part, but, you know, we would have thought that tech has the most advanced chips and, you know, once again, conjecture, but probably the toughest supply chain situation. What gives you the confidence you'll be able to catch up on the $60 million of volume that was shifted out of the first half into the second half? Thanks a lot. Yeah, sure. I think number one is if we look at tech's performance in the quarter, you never like to say if China hadn't happened. The reality is we had an unanticipated shutdown of a manufacturing facility in the last week of the quarter. If we shift some of that volume, roughly $15 million, you're into a good growth rate for tech, and I think that just represents the progress we're making. You're right, a sophisticated supply chain for sure. We've got good partnerships with a number of large-scale semiconductor manufacturers who supply us a number of key components. We're redesigning some things that are going to occur in the second and Q3. I think we look at the tangible actions that are in place, the progress that we've made thus far, and the confidence in those, in that progress going forward. Those are really this is not in a theoretical level. This is really we talked about the conversion Obeya and some of the daily visual management as part of FBS. This is literally walking into those Obeya's and having a sense for the actions, pressure testing them, like we would, under any kind of operating review, that we do every month. Really what comes out of that is a higher degree of confidence as we progress through the year. Chuck and I were with the tech team down at Beaverton a few weeks ago. I guess it was more than that now. You know, literally walking through the factory and seeing the actions and what the team's doing, and that's where that confidence comes from. Fabulous. Thanks so much. Thanks, Andrew. Your next question comes from the line of Nigel Coe with Wolfe Research. Your line is now open. Thanks. Good afternoon. Morning. Good afternoon, Nigel. Yeah. How are things? Hope all is well. By the way, I love the new format of the slides. It's a much easier read, much more informative. Just thinking about the Accruent and Gordian performance, you know, double digits, I think maybe mid-teens in Q1. I wanna make sure I heard this right. Accruent grew mid-single digits there, which I think is the Q1 of growth in some time. Number one, just maybe talk about that transition back to growth at Accruent. Then looking into Q2, you got into mid-single digit growth from Accruent and Gordian. That's a detail from Q1. Just wondering what you see in there. Thanks. Yeah. I think we have. First of all, we had good quarters in both businesses. I think we're. You know, we mentioned in the Q4 call about we were starting to see traction with some of the countermeasures and actions that were happening in Accruent. I think we've just seen. We're continuing to see those things. It's a consistent message from what we said in our last call. Olumide Soroye is doing a really great job with him and the team, I think, in making progress. That's a you know, that's a multi-quarter continued improvement, but we're starting to see the green shoots of their efforts and obviously you see that in the quarter. Gordian had a fabulous quarter across many, many ways. Their JOC solution was up over 20% I think. Just a very good quarter and really across their product line. You know, that's just a continued strength of that business that we've seen for some time. The combination of those two businesses is really performing well right now. As you know, we've moved some product lines between businesses. It'll slow a little bit in the Q2 because of a comp that we had at Gordian last year, where they had some finishing of contracts in their Job Order Contracting that was some upside in the Q2 last year. In the base business and kind of on a two-year stack, we're seeing good performance Q1 to Q2 sequentially with the comment in those businesses for sure. Great. Thanks, Jim. Just on the price, I think the quarter called out 2.2% price in the quarter. Can you just remind us what your expectations are for the full year, and how that shakes out between first half versus second half? Thanks. Well, I think we had roughly about 300 basis points of price, if I remember, in the quarter, I think, if I remember that number right. You know, I think we had good price across the board. We'll probably see part of, you know, you obviously saw it in the bridge. There's, I think, $20 million more of price in the bridge first half to second half. You're gonna see a little bit more price in the bridge. I think on balance, we're continuing to see good traction with price and a good balance between price and volume as well. I think we're certainly getting price and price cost. I think you know the idea that we grew gross margins by 60 basis points in the quarter. I don't know a lot of companies that grew gross margins in this environment. For us to grow gross margins in the quarter, I think is just a real testament to the high quality work. We mentioned on the slide the price realization work and the price tie-ins that we do, really you know continuing to demonstrate our ability to get price, but also, quite frankly, our ability to still maintain and deliver value to customers. Great. Thanks, Jim. Thanks, Nigel. Nigel, I didn't answer your second question, so the second part of that question, which is, that will improve, as I said, $20 million in the second half. We would believe that there's, you know, that just demonstrates, I think, the continued success that we would have relative to those tie-ins. We're gonna continue to do a lot of those events through the remaining part of the year, not assuming that inflation does anything but, you know, either stay the same or maybe even get worse. We wanna be ahead of the game and proactive on the pricing game. Ben. Emma, go ahead. Your next question comes from the line of Deane Dray with RBC. Your line is now open. Hey, good day, everyone. Hey, Deane. Hey, first question, just to clarify the expectation or how you land on that $40 million impact from China. Is that a bottom-up analysis of the front log, customer discussions and so forth, or is it a kind of a top-down swag on a percent of the business that you'd be expecting? Deane, it's really not a customer issue at all. As we mentioned, we've got really strong backlog. It's just about, you know, rolling lockdowns in Shanghai particularly, and having the factory open and being able to produce that. We've done a great job of getting material in and available and improving supply chains, but we need those lockdowns to end, and it's a function of how many days it's locked down. That's how we're calculating the impact. Customer-specific orders to your question around details, Deane. This is not, you know, this is really looking at orders that are on hand on the books, in some cases, products that are already sitting in the factory just need to go out. Understood. If you think about potential sales that could not be realized in the Q2, you've quantified China. Are there any other either areas, regions or product lines that, of sales that, you know, will be either past due, you just can't ship, component shortages, or is it all China? I think the story of Fortive. Certainly the Fortive we talked about is the China story. Certainly inherent in the way we've talked about our backlog is that, you know, we continue to, you know, have a very robust backlog, but of course, that means the customers aren't always getting the product in the timeframe that they necessarily want them. You know, in some cases where it's distribution, you know, that might be going into the distributor inventory. I think the stat we look at in that case is we look at the amount of time to fill, meaning what is our. If we're missing an order from an on-time perspective, how much time does it take for us to fill it on to the time that the customer requested? Those numbers are getting better. I think, you know, first thing we look at is that time to fill. After that, then we look at the on-time delivery. When those numbers are starting to get better, we're in customer conversations all the time in situations. Throughout those conversations around backlog, we're having conversations with customers about, you know, how do we, how do we help them be more successful? I think what's been good about that is I think we continue to see share gain opportunities and have seen share gains across the portfolio in a number of those cases. I think that suggests that we're doing a nice job of managing those challenges. That's helpful. Just as a follow-up on the commentary about M&A and the capacity, you said you've got both hardware, software candidates there. Do you have a bias between the two? Is there a bias on deal size? Lastly, what inning do you think Fortive is in terms of the portfolio pivot that has started a couple years ago? Because, you know, you think back to 2016, you had a set of businesses, and it's been dramatically changed in terms of a higher gross margin, higher recurring revenues, more software. If we think of that as a journey. At what point, what inning do you think you're in today? And when would you see that there'd be a stabilization or, you know, maybe a landing point? I know there'll be continuous tweaking from there, but just some context would be helpful. Yeah, great question. I think number one, our bias is balanced, and I think, you know, we're gonna be deal dependent in the sense of what comes available. It's hard to say with relative to the funnel, hardware, software balancing act versus what becomes available, what we've been working towards and that kind of thing. I would say at any point in time, it's gonna look like we have a bias, but I think over a longer period of time, you see that balance kind of come out. I'll stay away from committing to that balance because some of it is very much asset dependent. I think we probably are biased more towards bolt-on kinds of deals right now, I would say. You know, I think given where we just did two great deals in Provation and ServiceChannel, as we mentioned in the prepared remarks, they're out of the gate and outdoing really well. We certainly see an opportunity to do a number of kinds of deals, the breadth and depth of the funnel. If you had to sort of think about, there's probably a slight bias towards the bolt-on or two here in the near term, at least. Relative to the transformation, you know, I think it's interesting, and Chuck and I have talked a lot about this with you know, if you look at the segment structure today, we're only 12 months into that segment structure. I think when you look at it and you look at the power of what the segments have delivered this quarter, I think you could only look at that and say, "We must be in the final innings of a transformation because of, you know, this performance is so strong across the board and the opportunity is so great with $40 billion worth of served market." You never say never. That's why we do strategic plans every year. That's why we sit down with the board on a regular basis to talk about performance. But I think where we stand right now, we feel very good about where we're at. You know, it's spring, so we're always optimistic as baseball fans. But I think at the end of the day, we feel really good about the portfolio right now. I think as you look at the guide for the remaining part of the year, and you start to see how the full year stacks up segment to segment, strong growth, strong margin expansion with great free cash flow performance. I mean, all three segments are gonna be strong contributors to Fortive. That's really helpful. Thank you. Thanks, Deane. Your next question comes from the line of Scott Davis with Melius Research. Your line is now open. Good. Hey, Scott. Good morning, afternoon, whatever it is, guys. I was interested in just getting an update on Provation. I mean, it, where are you versus kind of the deal model? I mean, pretty big growth rates, but you were expecting good growth rates. Are we ahead of the deal model or in line, behind? An update there would be helpful. Yeah, we did a 100-day plan with the team, actually last week and could not have been more excited about the work that they did, the quality of the business and the degree of growth opportunity. They're certainly out of the gate well ahead. You know, we'll see where they end up the year. It's still early, but we feel really good about where the business is at. We mentioned the prepared remarks about you know, the number of GI wins and as well as their extension, one of the largest orders in the history of the company in anesthesia solutions. So we're seeing those additional studies. We're seeing the strength of the clinical superiority. We feel really good about the business and the ability for that business to grow. You know, I think in the short run, like we thought, in the long run, I'm starting to think maybe even better just given the number, the strength of the strategic plan. You know, strategies are just PowerPoint slides. We got to go out and execute, and I like our chances with the team we have. Okay. You know, on slide four, there's a little quote there that just says M&A returns nearly double next five years. What's the context on that? You mean deals done in the last year, double in the next five years, done in the last five? Is there a little color you can put on that? And what does that mean? Double from five to 10 or four to eight or three to six? Scott, we're talking about the ROI returns, and I think that it would be doubling, you know, let's just say four to eight is probably a good way to think about that. That doesn't mean we think most of our deals are getting to the 10% ROIs in five years, and we're very pleased with the progress. Coming out of, you know, with the last couple of years, we feel like we're inflecting here, and we're gonna start seeing more from these deals, and that's what we're trying to talk about. Okay. [crosstalk] I think what we saw in the quarter and what you'll see maybe just add on. Chuck's spot on here. I think, you know, the legacy deals, the ones we did early, right? eMaint and ISC and Landauer are doing outstanding. Some of that medium-term, you're starting to see, you know, Gordian's trajectory just take off here. Intelex had a strong quarter. You know, Accruent, as I mentioned in the question around continuing to improve. You know, ASP with really strong margins and ready for consumables to come back as healthcare changes. Certainly the last two deals we've done as I described. I think we're in a great place relative to returns, and this inflection is obviously. We're excited about. We put a lot of hard work into it. I think we're in a really good place relative to those. Doesn't mean we won't have an issue or two. I think what we've seen certainly in the last several quarters as well is these inflections have started to happen in the business. Well, well, good luck, guys. Thank you. Thanks, Scott. Your next question comes from the line of Jeff Sprague with Vertical Research Partners. Your line is now open. Hey, good day, everyone. Hi, Jeff. Hi. Hey. two from me. Just first on back on price/cost. Jim, you noted IOS was price/cost on a positive on a dollar basis. Was that true for the other segments? Also, if you could maybe put it in the context of margins. As you noted, gross margins did improve nicely. Was that in spite of negative friction on price/cost? Right? You can be positive on dollars and still negative on margins, kind of the essence of the question. Jeff, this is Chuck. For Q1, our core operating margin expansion is up 30 basis points. As a percentage basis, we've talked about the dollars being up. But certainly, we saw real margin expansion. We continue to see that accelerate as we go through the year. Was it true for everyone? It was true in PT, but we were down a little bit in AHS. You know, down I think about 40 basis points is what's on the slide there. On core. Okay. On AHS, I think you gave us the 88% recovery on procedures for the year. What was it actually in Q1, and what's the magnitude of improvement you're expecting in Q2? 85 was quarter-over-quarter, Q1, excuse me. Obviously, that's got progressively better through the quarter. I think we're probably in the couple basis points better in the Q2. Then, obviously, probably starts to approach 90 as we get through the second half of the year. Still early. Omicron was an influence in January and February, particularly in the US We expect now to really just see gradual improvement. We're seeing some green shoots. We're starting to see some hospitals that are now over 100% from their 2019 levels. You know, it's a combination of sort of confidence gets built on the overall number, but also kind of looking through the detail to understand, you know, what hospital networks and where they're at. We're starting to see some of those numbers where, you know, hospitals are getting in much better shape as they progress through the quarter. Okay, great. Thanks for the color. Thanks, Jeff. Your next question comes from the line of Andy Kaplowitz with Citigroup. Your line is now open. Good morning, everyone. Andy. Jim, you mentioned the new Five series in Tektronix, and you've been talking about a significant product refresh, I think, in Tektronix and Fluke for some time now. Maybe you can give us a little more perspective on how much new product growth should help you in 2022. How might this new product cycle compare to previous cycles you've had? Then I think you said last quarter that you expect minimal backlog reduction in Fluke and Tektronix for the year. Is that still the case? Yeah. Let's break them up. I think tech certainly has a refresh coming in a couple of product lines. You mentioned the five series. I don't wanna ruin their announcements here, but we'll start to see in the second and Q3 some announcements around things that they're coming out with. They'll, you know, inherent in that sort of step up from the first half to the second half probably is some new product introductions in the business at Tektronix. It's hard to sort of say what's backlog reduction, what's new product. I mean, I sort of put those. We will see good product refresh. Some of that refreshing, quite frankly, comes with you know, some changes in chips as we were doing some things relative to component changes and so decided to you know, make some improvements to the product as well. I think at Tech, we don't anticipate much by way of backlog reduction at Tech in the year, consistent with what we've been saying before. I think the business is gonna be in very good shape. As we said, you know, the China situation very much an independent situation relative to just Shanghai. Overall growth in the rest of the world was very good and should continue to improve through the year. Relative to Fluke's kind of always a little bit of a, you know, has a pretty broad product line, so there's really no one product that necessarily moves the needle. They will, you know, they do have some things that are going on in terms of new clamps and some acoustic imaging, things like that are coming through, that'll probably be more back half. Unlike Tech, where one product category can make a difference, typically at Fluke, it takes a, you know, that is, you know, they just have a broader product line. It's the nature of the business. We will get a little bit of backlog reduction at Fluke this year, I suspect. They'll end the year as well in a good position for 2023. You know, both businesses showed demonstrated success against their countermeasures relative to challenges in the quarter. Inherent in what we think about the year will be those continued countermeasures will continue to have impact for the business. Thanks for that. Jim, maybe just talking a little bit more about the M&A market. You obviously have a ton of capacity. You mentioned a big pipeline of opportunities. Have sellers' asks come down yet a bit given lower market valuations? Or do you think it might take some time to get buyers and sellers on the same page here given the volatility in the markets? Well, every deal has its story, but I would say typically it takes longer. Our conversations here recently in a couple of situations probably would suggest that, and some transactions that we've watched occur would suggest that things are still, I would say things haven't changed much. I would anticipate that's more of a second half, early 2023 real impact. Some deals will have different situations and be, you know, certainly be situational dependent, but I think at the end of the day, just more broadly about how we think about things, I would say we're probably still awaiting a little bit more until some of the uncertainties that we've seen recently sort of find their way to kind of knowing the natural direction of what that might be. Interest rates being one of them, the macro, some of those things. Appreciate it, Jim. Thanks, Andy. Your next question comes from Josh Pokrzywinski with Morgan Stanley. Your line is now open. Hi, good morning, guys. Hi, Josh. Just a quick question on the backlog, Jim. You mentioned it, you know, several times on this call, and I think, you know, for across kind of the shorter cycle industrial world, this has been, you know, a bit of a talking point, like, what does backlog really mean in this environment? Any historical context for what happens to backlog if, you know, incoming orders soften? Like, do you see cancellations? Is there any kind of context for something like a double ordering or channel dynamic? Like, doesn't sound like anything's happening today. Just trying to get my arms around, like, what does backlog look like if the environment were to change? Yeah, I think, you know, it's something we spend a lot of time on, Josh. Obviously, when you build another $130 million in backlog like we did in the Q1, obviously a topic of conversation every month with our operating reviews with the presidents and CFOs. I would say I'd break it into a few places within Fortive. In our sensing tech businesses, we have a real sense of what it looks like. What we're seeing is we are seeing some orders being placed for like November shipments and things like that. That's not double ordering. That's just somebody wanting to say, "Hey, I wanna get in the queue for deliveries for that kind of thing." In the case of sensing tech, I think we have a good sense of the backlog. We don't see double ordering. Little bit of people trying to get around some pricing. At the end of the day, that backlog will flow, and it will flow out, and we're confident with that. On the tech side, 50% of the business is direct, and we can very much see those customers and their use cases and their needs, and we've tested that pretty profusely. Feel very good about that. The channel inventory then, and that's about, you know, a little bit less than half of Tektronix revenue and, you know, close to 75% or 80% of Fluke's revenue. That's where we get into looking at point-of-sale data. Where are those trends going? What do inventory positions look like? What do they have on order? We have a sort of methodology and calculation that we use from an analytical perspective to test that. What we see today is, in those, we don't see anything getting out of range. Point of sale remains good. Inventories remain in a good place, and there's no natural increases that if you sort of play around with the analytics where things would go haywire quickly. That's what we watch, and we watch it consistently. We get you know a little bit better, more refined data in the US and Europe on some of those things than we do in the rest of the world. But that's how we test the portfolio. I think when you step back and say, "What does that all tell you?" We'd say the natural demand patterns are good. The inventory levels are not substantive relative to natural numbers. What's on order doesn't significantly increase their inventory at any time soon. That's what makes us feel pretty good about the near term. I would say, you know, that informs our guide. It gives us the confidence. We'll start the second half with good backlog. If we saw some changes in some of those demand patterns, you might see a little cancellation, you know, although, and I would say historically, we haven't seen a lot of that. Got it. That's helpful. I guess just on, you know, some of the more facilities-facing platforms on the software side, you know, return to work and, you know, maybe even a more of a hybrid model than remote than, you know, folks would have expected six months ago. Seems like it's well in order. Anything that's kind of permeated through that organization or, you know, customer behavior that you track alongside some of those changes, good or bad? Well, I think it's great to be in facilities and asset lifecycle management from a software perspective because it really, you know, the combination of what we're doing in ServiceChannel and Accruent and to some extent, Gordian, I think it supports hybrid work and supports the kinds of changes that are gonna occur in facilities over time to support collaboration and the kinds of things that people wanna do as people come back into the offices, not full-time, but, you know, from time to time. I think that trend and that secular driver is gonna be out there for years. It's well documented that we're very in the early innings of those transformations. I think, you know, on balance, we're back. Our customers are in many cases back. We're back in hospitals. We're, you know, there's times when our service revenue, trying to get customers on site to get things serviced, can take a little bit longer. As we mentioned in a couple of places, we're starting to see the opportunity to compress those timelines from when we come on site to help start up a customer, as an example, whether it be in a hardware or software business and the time to value. We're starting to see those come down as people come back to work, come back into the office, come back into the facility. I think on balance, inherent in sort of our natural trajectory of the business is some of these things happening and being helpful to how we conduct business. Appreciate the color, guys. Best of luck. Thanks, Josh. Your final question today comes from the line of John Walsh with Credit Suisse. Your line is now open. Hey, John. Hey there. Good day, and thanks for squeezing me in. You know, kind of following along those lines, was just curious if you could talk to, for the software businesses, kinda what you're seeing, in terms of maybe a net add. As it relates to subscribers or if you have more granularity around churn and absolute adds. Then just as I'll do my follow-on right now, the pricing, are you seeing anything different between the ability to get the price on the software side versus the hardware side? Thank you. Yeah, great question. I think on Vegas, we announced that, you know, a lot of the prepared remarks, we tried to highlight a number of places where new logos are occurring. I think, quite frankly, we had our largest, I think we have one of our largest iNet deals in the history of the company at ISC. We have one of our largest, I think we have the largest anesthesia iProcedures order in Provation. A number of places where new logos. We're in a good place relative to new logo growth in the quarter. I think when you look at where our software growth was, I think our, you know, our low double-digit teens and low double-digit growth in SaaS and our teens growth in software, that's gonna stand up, I think, against a lot of software players. Looked at a few folks that reported today even and feel really good about where that double-digit number is gonna stand up relative to others. That's also helpful because our net dollar retention continues to improve on the backs of, you know, churn reduction. I think we're in a really good place to continue to improve net dollar retention. Our FBS efforts are making a difference there. I think that some of that is also getting a little bit more price. We're still getting more price in the hardware businesses to the second part of your question, John. You know, we think we're in a good place relative to that. I think the balance, we didn't talk about this, but in our hardware businesses that good balance of probably about 50% price, 50% volume in our growth, I think is an outstanding balance that really demonstrates the strength of our brand, the strength of our value propositions. We think that's gonna play out this year. You know, obviously, we're getting the price that's inherent in some of the inflationary challenges that we've documented. We're also driving tremendous value with customers that ultimately is driving our volume. Anyway, I think I'll end it there. Thanks everybody for a great call today. I think we're incredibly proud of the quarter we had. We're incredibly excited about 2020 year. We've said this was a show me year, and I think we just did that. We'll look forward to your follow-up questions. We'll talk to you soon, and we'll see you on the road. Thanks. This concludes today's conference call. Thank you for attending. You may now disconnect.