Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Solventum's Q2 FY2026 results were shaped by a combination of organic growth acceleration and significant one-time items, including advanced customer orders ahead of a U.S. ERP deployment that boosted sales by approximately $125 million and the recognition of $120 million in IEEPA tariff refund receivables. Management highlighted strong volume growth in MedSurg and Dental Solutions, driven by products like Tegaderm CHG and negative pressure wound therapy, though the company noted a potential reversal in Q3 as customers normalize inventory. While gross margin expanded sharply, operating income declined due to a surge in SG&A costs tied to legal expenses and separation activities, and operating cash flow remained weak at just $38 million YTD, pressured by higher incentive payments and transition agreement exit costs. The quarter also introduced strategic uncertainty with the announced plan to separate the Health Information Systems business.
Revenue
$2.21B
+2.22% YoY
EPS (Diluted)
$0.53
+3.92% YoY
Gross Margin
58.2%
+3.8 pts YoY
Operating Income
$181M
-15.42% YoY
Source: SEC XBRL
Solventum (SOLV) reported Q2 FY2026 revenue of $2.21B, up 2.2% year over year. Operating margin was 8.2%, down 1.7 points from 9.9% a year earlier. SOLV's fiscal Q2 FY2026 corresponds to calendar Q2 2026.
Last 4 quarters: 4 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026This filing | 2.55 | 1.94 | Beat +31.2% |
| Mar 2026 | 1.48 | 1.38 | Beat +7.3% |
| Dec 2025 | 1.57 | 1.53 | Beat +2.9% |
| Sep 2025 | 1.50 | 1.46 | Beat +2.7% |
Adjusted (non-GAAP) EPS of $2.55 versus the $1.94 analyst consensus — a +31.2% beat for Jun 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $0.53.
4 reported segments · SEC XBRL
Segment revenue totals $2.12B; with $87M of reconciling items (corporate, unallocated and eliminations) it ties to the $2.21B of consolidated revenue on the income statement.
Profit above is reported as operating income, the measure SOLV itself discloses in this filing. Each company chooses its own measure here, so these margins are not comparable with another company's.
Compiled by AI from 10-Q Item 2 of this filing
Customer ordering ahead of the July 2026 U.S. ERP deployment added approximately $125 million to second-quarter sales, with management warning of a negative impact in Q3 as customers reduce inventory to normal levels.
Source: 10-Q Item 2 MD&A
The company recognized a $120 million receivable for IEEPA tariff refunds, which reduced cost of product and lifted segment margins across MedSurg and Dental Solutions.
Source: 10-Q Item 2 MD&A
SG&A expenses rose 20.1% YoY to $927 million, driven by accrued legal expenses and higher costs to separate operations from 3M, partially offset by insurance recoveries.
Source: 10-Q Item 2 MD&A
On August 5, 2026, Solventum announced plans to pursue a separation of its Health Information Systems business, evaluating a range of pathways to maximize shareholder value.
Source: 10-Q Item 2 MD&A
Cash from operations YTD dropped 80.8% to $38 million, primarily due to higher annual incentive compensation payments and costs to exit certain transition agreements with 3M.
Source: 10-Q Cash Flow Statement (XBRL), 10-Q Item 2 MD&A
Compiled by AI from this SEC filing · 0 high, 5 medium, 0 low
The review of strategic alternatives for the health information systems business may not result in a transaction, could divert management attention, create customer uncertainty, and incur costs regardless of outcome.
Source: 10-Q Item 1A Risk Factors
The $125 million in advanced customer orders ahead of the ERP go-live is expected to reverse in Q3 2026, creating potential for a sharp sequential sales decline and earnings disappointment.
Source: 10-Q Item 2 MD&A
SG&A expenses grew over 20%, driven by legal accruals and standalone separation costs; if these costs remain elevated or legal exposures worsen, operating margins could face sustained pressure.
Source: 10-Q Income Statement (XBRL), 10-Q Item 2 MD&A
Operating cash flow YTD fell to $38 million, and the company used $350 million in financing activities for share repurchases; with $403 million in cash against $4.57 billion in long-term debt, reliance on capital markets may increase.
Source: 10-Q Cash Flow Statement (XBRL), 10-Q Item 2 MD&A
Although IEEPA tariffs were refunded, new tariffs under other authorities remain; ongoing trade policy uncertainty could raise supply chain costs or disrupt sourcing, partially offset by savings programs.
Source: 10-Q Item 2 MD&A
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 2.21 $B | 2.16 $B | +2.22% |
Gross Profit $B | 1.29 $B | 1.18 $B | +9.45% |
Operating Income $M | 181.00 $M | 214.00 $M | -15.42% |
Net Income $M | 92.00 $M | 90.00 $M | +2.22% |
EPS (Basic) $ | 0.53 $ | 0.52 $ | +1.92% |
EPS (Diluted) $ | 0.53 $ | 0.51 $ | +3.92% |
R&D Expense $M | 178.00 $M | 189.00 $M | -5.82% |
SG&A Expense $M | 927.00 $M | 772.00 $M | +20.08% |
Answers draw on this SEC filing and the data on this page
Expected release date, analyst estimates & what to watch
SOLV's Q1 FY2026 results showed significant earnings deterioration with net income plunging 90.5% YoY to $13M on a 3.0% revenue decline to $2.007B, driven by a sharp 7.5% rise in SG&A expenses and negative operating cash flow of -$189M, though the balance sheet improved materially with long-term debt cut by 41.4% and stockholders' equity up 52.3%.
SOLV delivered strong FY2025 earnings growth with net income surging 224.8% to $1.56B and operating income more than doubling to $2.18B, driven by significant debt reduction and margin expansion, though operating cash flow declined sharply by 68.9%.
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