Solventum Reports Fourth Quarter 2025 Financial Results and Introduces 2026 Full-Year Guidance

ST. PAUL, Minn., Feb. 26, 2026 /PRNewswire/ -- Solventum (NYSE: SOLV) today reported financial results for the fourth quarter and year ended December 31, 2025.

Fourth Quarter 2025 Highlights

"Solventum's fourth quarter results reflect another quarter of solid performance resulting in full year 2025 results ahead of our expectations for sales and EPS," said Bryan Hanson, chief executive officer of Solventum. "We continue to deliver on our commitments; our underlying momentum and the intentional steps we've taken in our transformation journey demonstrate clear progress towards achieving our long-range plan."

Fourth Quarter and Year Ended 2025 Financial Results

Three months ended December 31,

Year ended December 31,

(Dollars in millions, except per share amounts)

2025

2024

Year over

year change

2025

2024

Year over

year change

Net sales

$ 1,998

$ 2,074

(3.7) %

$ 8,325

$ 8,254

0.9 %

Selling, general and administrative expenses

$ 759

$ 784

(3.2) %

$ 3,080

$ 2,782

10.7 %

Research and development expenses

$ 175

$ 199

(12.1) %

$ 739

$ 775

(4.6) %

Operating income margin

6.2 %

6.6 %

(40) bps

26.2 %

12.6 %

1,360 bps

Adjusted operating income margin 1

19.9 %

20.4 %

(50) bps

20.5 %

22.0 %

(150) bps

Net income

$ 63

$ 30

110.0 %

$ 1,556

$ 479

224.8 %

Diluted earnings per share

$ 0.36

$ 0.17

111.8 %

$ 8.88

$ 2.76

221.7 %

Adjusted diluted earnings per share 1

$ 1.57

$ 1.41

11.3 %

$ 6.11

$ 6.70

(8.8) %

Net cash provided by operating activities

$ 96

$ 219

(56.2) %

$ 369

$ 1,185

(68.9) %

Free cash flow 1

$ 33

$ 92

(64.1) %

$ (10)

$ 805

(101.2) %

Organic sales growth in the quarter reflects positive performance from all segments, primarily driven by results of the Infection Prevention and Surgical Solutions business within MedSurg as well as Dental Solutions.

GAAP and adjusted operating income margin remained largely consistent with prior year. On an adjusted basis, operating expense savings and the accretive benefit of the Purification and Filtration divestiture more than offset incremental tariff headwinds. Debt paydown following the sale of Purification and Filtration was the primary driver of the increase to adjusted earnings per share.

1 Represents non-GAAP financial measure; see the "Non-GAAP Financial Measures" section for applicable information.

Segment and Total Company Net Sales for Fourth Quarter*

Three months ended

December 31,

Increase/(Decrease)

(Dollars in millions)

2025

2024

Reported

Growth

Currency

Impact

Constant

Currency 2

Other 3

Organic

Growth

Advanced Wound Care

$ 483

$ 466

3.8 %

1.5 %

2.2 %

0.5 %

1.7 %

Infection Prevention and Surgical Solutions

752

708

6.2

2.0

4.2

—

4.2

MedSurg

1,235

1,174

5.2

1.8

3.4

0.2

3.2

Dental Solutions

343

315

8.6

2.8

5.9

—

5.9

Health Information Systems

348

336

3.7

0.5

3.2

—

3.2

Total business segment net sales

1,926

1,825

Purification and Filtration

—

177

All Other 4

0.2

0.8

(0.6)

—

(0.6)

Total Company

$ 1,998

$ 2,074

(3.7) %

1.7 %

(5.4) %

(8.9) %

3.5 %

*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum. "NM" reflects results considered not meaningful due to sale of the Purification and Filtration business in September 2025.

2 Constant currency represents the change in net sales absent the impact on sales from foreign currency translation.

3 Other represents sales impact from acquisitions and divestitures measured separately for the first 12 months post-transaction. Acquisitions include sales from the December 2025 acquisition of Acera. Divestitures primarily represents lost sales from the Company's Purification and Filtration business that was sold in September 2025.

4 All Other includes the drinking water business, which was previously reported within Purification and Filtration, and sales related to product supplied to 3M and other supply agreements related to legacy 3M business and assumed by the company at Spin-Off.

Full-Year 2026 Guidance

Solventum is providing its full year 2026 guidance as follows:

Organic sales, adjusted diluted EPS and free cash flow amounts included in Solventum's full-year guidance are non-GAAP financial measures. Solventum does not provide reconciliations of the forward-looking non-GAAP financial measures to the respective GAAP metrics as it is unable to predict with reasonable certainty and without unreasonable effort certain items, such as the impact of changes in currency exchange rates, impacts associated with business acquisitions or divestitures, and the timing and magnitude of restructuring activities, among other items.

Please note Solventum's Q1 2024 results were reported on a carve-out basis.

See the "Non-GAAP Financial Measures" section for explanations of our non-GAAP financial measures.

Earnings Conference Call

Solventum will host a conference call today, Feb. 26, at 4:30 p.m. Eastern Time to discuss its fourth quarter financial results and provide a fiscal year 2026 outlook. The conference call can be accessed via audio webcast at investors.solventum.com or by dialing (800) 715-9871 within the U.S. or +1 (646) 307-1963 for international callers, using the conference ID 6342275.

A replay of the webcast, along with the earnings press release, slides highlighting the results, and supplemental financial disclosures, will also be available at the same link on the Investor Relations section of the company's website.

Forward-Looking Statements

This news release contains forward-looking information about Solventum that contains or incorporates by reference statements that relate to future events and expectations, including financial results, estimates and business prospects, including guidance for 2026, that constitute forward-looking statements that involve risk and uncertainties. Forward-looking statements include those containing such words as "anticipates," "believes," "could," "estimates," "expects," "forecasts," "goal," "guidance," "intends," "may," "outlook," "plans," "projects," "seeks," "sees," "should," "targets," "will," "would," or other words of similar meaning in connection with any discussion of future operating or financial performance or business plans or prospects. Among the factors that could cause actual results to differ materially from those described in our forward-looking statements are the following: (1) any failure by the 3M Company ("3M") to perform any of its obligations under the various separation agreements in connection with the separation from 3M (the "Spin-Off"); (2) any failure to realize the expected benefits of the Spin-Off; (3) a determination by the IRS or other tax authorities that the Spin-Off or certain related transactions should be treated as taxable transactions; (4) financing transactions undertaken in connection with the Spin-Off and risks associated with additional indebtedness; (5) the risk that incremental costs of operating on a standalone basis (including the loss of synergies), costs of restructuring transactions and other costs incurred in connection with the Spin-Off will exceed Solventum's estimates; (6) the impact of the Spin-Off on its businesses and the risk that the Spin-Off may be more difficult, time-consuming or costly than expected, including the impact on its resources, systems, procedures and controls, diversion of management's attention and the impact on relationships with customers, suppliers, employees and other business counterparties; (7) the effects of, and changes in, worldwide economic, political, regulatory, international, trade and geopolitical conditions, natural disasters, war, and other events beyond Solventum's control; (8) the deployment of artificial intelligence and other emerging technologies in Solventum's products and services or a failure to adapt products and services to such technologies; (9) public health crises; (10) damage to our reputation or our brands; (11) risks from acquisitions, strategic alliances, divestitures and other strategic events, including integration; (12) the success of Solventum's restructuring program; (13) Solventum's ability to access the capital and credit markets and changes in Solventum's credit ratings; (14) exposure to interest rate and currency risks; (15) the highly competitive environment in which Solventum operates and consolidation in the healthcare industry; (16) reduction in customers' research budgets or government funding; (17) the timing and market acceptance of Solventum's new product and service offerings; (18) ongoing working relationships with certain key healthcare professionals; (19) changes in reimbursement practices of governments or private payers or other cost containment measures; (20) Solventum's ability to obtain components or raw materials supplied by third parties and other manufacturing and related supply chain difficulties, interruptions, and disruptive factors; (21) legal and regulatory proceedings and legal compliance risks (including third-party risks) with regards to antitrust, Foreign Corrupt Practices Act and other anti-bribery laws, environmental laws, anti-kickback and false claims laws, privacy laws, tax laws, and other laws and regulations in the United States and other countries in which Solventum operates; (22) potential liabilities related to a broad group of perfluoroalkyl and polyfluoroalkyl substances, collectively known as "PFAS"; (23) climate change and measures to address climate change; (24) risks related to the highly regulated environment in which Solventum operates; (25) risks related to government contracts, public procurement and government reimbursement; (26) risks associated with product liability claims; (27) security breaches and other disruptions to information technology infrastructure; (28) Solventum's failure to obtain, maintain, protect, or effectively enforce its intellectual property rights; (29) any inability to retain key personnel and qualified employees; and (30) our anti-takeover provisions may limit shareholder power.

The above list is not exhaustive or necessarily set forth in the order of importance. Forward-looking statements are based on certain assumptions and expectations of future events and trends, and actual future results and trends may differ materially from historical results or those reflected in any such forward-looking statements depending on a variety of factors. A further description of these factors is located under "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in Solventum's periodic reports on file with the U.S. Securities & Exchange Commission. Solventum assumes no obligation to update any forward-looking statements discussed herein as a result of new information, future events or otherwise, except as required by applicable law.

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with U.S. GAAP, Solventum also provides non-GAAP measures that we use, and plan to continue using, when monitoring and evaluating operating performance and measuring cash available to invest in our business. The adjusted measures are not in accordance with, nor are they a substitute for, GAAP measures. These non-GAAP financial measures are supplemental measures of our performance and our liquidity that we believe help investors understand our underlying business performance and Solventum uses these measures as an indication of the strength of Solventum and its ability to generate cash.

Solventum calculates forward-looking non-GAAP financial measures, including organic sales growth, adjusted operating income, adjusted operating income margin, adjusted effective tax rate, adjusted diluted earnings per share, and free cash flow based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. Solventum does not provide reconciliations of these forward-looking non-GAAP financial measures to the respective GAAP metrics as it is unable to predict with reasonable certainty and without unreasonable effort certain items such as the impact of changes in currency exchange rates, impacts associated with business acquisitions or divestitures, and the timing and magnitude of restructuring activities, among other items. The timing and amounts of these items are uncertain and could have a material impact on Solventum's results in accordance with GAAP.

The Q4 2025 financial statements and financial information, including reconciliations of non-GAAP financial measures, are available on Solventum's website: investors.solventum.com.

About Solventum

At Solventum, we enable better, smarter, safer healthcare to improve lives. As a new company with a long legacy of creating breakthrough solutions for our customers' toughest challenges, we pioneer game-changing innovations at the intersection of health, material and data science that change patients' lives for the better — while empowering healthcare professionals to perform at their best. See how at Solventum.com.

Solventum Corporation

CONSOLIDATED STATEMENTS OF INCOME*

(Dollars in millions, except per-share data)

(Unaudited)

Three months ended

December 31,

Year Ended December 31,

2025

2024

2025

2024

2023

Net sales of product

$ 1,490

$ 1,581

$ 6,349

$ 6,348

$ 6,296

Net sales of software and rentals

508

493

1,976

1,906

1,901

Total net sales

1,998

2,074

8,325

8,254

8,197

Cost of product

855

830

3,402

3,172

3,023

Cost of software and rentals

116

125

472

489

481

Gross profit

1,027

1,119

4,451

4,593

4,693

Selling, general and administrative expenses

759

784

3,080

2,782

2,299

Research and development expenses

175

199

739

775

758

Gain on sale of business

(31)

—

(1,549)

—

(56)

Operating income

124

136

2,181

1,036

1,692

Interest expense, net

107

347

367

—

Loss on debt extinguishment, net

—

Other expense (income), net

Income before income taxes

1,713

605

1,667

Provision for (benefit from) income taxes

(5)

(18)

157

127

321

Net Income

$ 63

$ 30

$ 1,556

$ 479

$ 1,346

Earnings per share:

Basic earnings per share

$ 0.36

$ 0.17

$ 8.94

$ 2.77

$ 7.79

Diluted earnings per share

0.36

0.17

8.88

2.76

7.79

Weighted-average number of shares outstanding:

Basic

174.4

173.4

174.1

173.2

172.7

Diluted

175.7

174.5

175.3

173.7

172.7

*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum.

Solventum Corporation

CONSOLIDATED BALANCE SHEETS*

(Dollars in millions, except per-share data)

(Unaudited)

December 31,

2025

2024

Assets

Current assets

Cash and cash equivalents

$ 878

$ 762

Accounts receivable — net of allowances of $87 and $86

1,034

1,044

Due from related parties

150

185

Inventories

Finished goods

636

539

Work in process

201

190

Raw materials and supplies

229

236

Total inventories

1,066

965

Other current assets

731

293

Total current assets

3,859

3,249

Property, plant and equipment — net

1,326

1,622

Goodwill

5,704

6,377

Intangible assets — net

2,592

2,544

Other assets

814

665

Total assets

$ 14,294

$ 14,457

Liabilities

Current liabilities

Short-term borrowings and current portion of long-term debt

$ —

$ 200

Accounts payable

687

618

Due to related parties

435

272

Unearned revenue

621

572

Other current liabilities

1,393

1,041

Total current liabilities

3,136

2,703

Long-term debt

5,035

7,810

Pension and postretirement benefits

363

350

Deferred income taxes

164

225

Other liabilities

547

410

Total liabilities

$ 9,245

$ 11,498

Equity

Common stock, par value $0.01 per share, 750,000,000 shares authorized

$ 2

Shares issued and outstanding - December 31, 2025: 173,490,864

Shares issued and outstanding - December 31, 2024: 172,785,606

Additional paid-in capital

3,876

3,771

Retained earnings

1,797

242

Accumulated other comprehensive income (loss)

(625)

(1,056)

Total equity

5,049

2,959

Total liabilities and equity

$ 14,294

$ 14,457

*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum.

Solventum Corporation

CONSOLIDATED STATEMENTS OF CASH FLOWS*

(Dollars in millions)

(Unaudited)

Twelve months ended December 31,

2025

2024

2023

Cash Flows from Operating Activities

Net income

$ 1,556

$ 479

$ 1,346

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization

489

555

561

Pension and postretirement benefit expense

Stock-based compensation expense

161

112

Gain on sale of business

(1,549)

—

(56)

Transaction costs

(111)

—

Deferred income taxes

(120)

(155)

(142)

Changes in assets and liabilities

Accounts receivable

(129)

Due from related parties

233

—

Inventories

(139)

(132)

Accounts payable

104

266

105

Due to related parties

(11)

(395)

—

Accrued compensation

142

All other operating activities — net

(194)

(15)

Net cash provided by operating activities

369

1,185

1,915

Cash Flows from Investing Activities

Purchases of property, plant and equipment

(379)

(380)

(290)

Acquisitions, net of cash acquired

(696)

—

Proceeds from sale of business

3,890

—

Other — net

(18)

—

Net cash provided by (used in) investing activities

2,797

(380)

(230)

Cash Flows from Financing Activities

Repayment of debt

(3,070)

(300)

—

Net transfers to 3M

(33)

(8,251)

(1,553)

Proceeds from long-term debt, net of issuance costs

—

8,303

—

Other — net

Net cash used in financing activities

(3,057)

(240)

(1,552)

Effect of exchange rate changes on cash and cash equivalents

—

Net increase (decrease) in cash and cash equivalents

116

568

133

Cash and cash equivalents at beginning of year

762

194

Cash and cash equivalents at end of year

$ 878

$ 762

$ 194

*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum.

Solventum Corporation

SALES CHANGE ANALYSIS*

(Dollars in millions)

(Unaudited)

Segment and Total Company Net Sales for the Years Ended

Twelve months ended

December 31,

Increase/(Decrease)

2025

2024

Reported

Growth

Currency

Impact

Constant

Currency 2

Other 3

Organic

Growth

Advanced Wound Care

$ 1,883

$ 1,835

2.6 %

0.5 %

2.1 %

0.1 %

2.0 %

Infection Prevention and Surgical Solutions

2,934

2,802

4.7

0.5

4.2

(0.4)

4.5

MedSurg

4,817

4,637

3.9

0.6

3.3

(0.2)

3.5

Dental Solutions

1,349

1,295

4.2

1.1

3.1

(0.2)

3.3

Health Information Systems

1,360

1,306

4.1

0.2

3.9

—

4.0

Total business segment net sales

7,526

7,238

Purification and Filtration

497

709

(29.9)

1.1

(31.0)

(36.5)

5.5

All Other 4

302

306

(1.5)

0.3

(1.8)

4.3

(6.1)

Total Company

$ 8,325

$ 8,254

0.9 %

0.6 %

0.3 %

(3.0) %

3.3 %

*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum.

2 Constant currency represents the change in net sales absent the impact on sales from foreign currency translation.

3 Other represents sales impact from acquisitions and divestitures measured separately for the first 12 months post-transaction. Acquisitions include sales of Acera that was acquired in December 2025, non-healthcare related supply agreements that conveyed from 3M to the Company at Spin-Off and sales from new supply agreements with 3M that commenced at Spin-Off. Divestiture impacts include lost sales from the Company's Purification and Filtration business that was sold in September 2025, certain health care businesses retained by 3M India in connection with the Spin-Off, as well as impacts from other immaterial divested businesses.

4 All Other includes the drinking water business, which was previously reported within the Purification and Filtration, and sales related to product supplied to 3M and other supply agreements related to legacy 3M business and assumed by the company at Spin-Off.

Solventum Corporation and Subsidiaries

BUSINESS SEGMENTS – (CONTINUED)*

(Unaudited)

The Company's operating activities are primarily managed through three segments: MedSurg, Dental Solutions, and Health Information Systems.

Purification and Filtration consists of filters and membranes for biopharmaceutical and medical technologies, as well as microelectronics and food and beverage that were reported prior to the sale of the business in September 2025.

All Other primarily consists of the Water Business that was retained after the sale of the Purification and Filtration Business. All Other also includes sales and cost of sales related to our agreements to supply 3M and other supply agreements assumed by the Company at Spin-Off related to legacy 3M businesses, which were historically included within Corporate and Unallocated.

BUSINESS SEGMENT INFORMATION AND DISAGGREGATED NET SALES*

Three months ended December 31,

2025

Three months ended December 31,

2024

(Dollars in millions)

Net Sales

Operating

Income

Operating

Margin %

Net Sales

Operating

Income

Operating

Margin %

Advanced Wound Care

$ 483

$ 466

Infection Prevention and Surgical Solutions

752

708

MedSurg

1,235

191

15.5 %

1,174

$ 208

17.8 %

Dental Solutions

343

24.4

315

23.3

Health Information Systems

348

133

38.3

336

114

34.1

Total reportable segment net sales and operating income

1,926

408

1,825

395

Purification and Filtration

—

177

6.8

All Other

15.3

8.3

Amortization Expense

(77)

(88)

Corporate and Unallocated

(218)

(189)

Total Company

$ 1,998

$ 124

6.2 %

$ 2,074

$ 136

6.6 %

*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum.

Solventum Corporation and Subsidiaries

BUSINESS SEGMENTS – (CONTINUED)*

(Unaudited)

BUSINESS SEGMENT INFORMATION AND DISAGGREGATED NET SALES*

Twelve months ended December 31,

2025

Twelve months ended December 31,

2024

(Dollars in millions)

Net Sales

Operating

Income

Operating

Margin %

Net Sales

Operating

Income

Operating

Margin %

Advanced Wound Care

$ 1,883

$ 1,835

Infection Prevention and Surgical Solutions

2,934

2,802

MedSurg

4,817

$ 810

16.8 %

4,637

$ 887

19.1 %

Dental Solutions

1,349

346

25.6

1,295

350

27.0

Health Information Systems

1,360

496

36.5

1,306

431

33.0

Total reportable segment net sales and operating income

7,526

1,652

7,238

1,668

Purification and Filtration

497

19.3

709

10.4

All Other

302

13.9

306

9.8

Amortization Expense

(312)

(349)

Corporate and Unallocated

702

(387)

Total Company

$ 8,325

$ 2,181

26.2 %

$ 8,254

$ 1,036

12.6 %

*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum.

Solventum Corporation

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES

(Unaudited)

In addition to reporting financial results in accordance with U.S. GAAP, the Company uses non-GAAP financial measures to supplement the financial measures prepared in accordance with U.S. GAAP. These include (1) adjusted operating income and adjusted operating income margin, (2) adjusted diluted earnings per share, and (3) free cash flow. Management believes that these non-GAAP financial measures are useful in evaluating current performance and focusing management on our underlying operational results.

There are limitations to the use of the non-GAAP financial measures presented in this information statement. These non-GAAP financial measures are not prepared in accordance with U.S. GAAP nor do they have any standardized meaning under U.S. GAAP. In addition, other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to such similarly titled non-GAAP financial measures used by other companies. Management cautions you not to place undue reliance on these non-GAAP financial measures, but instead to consider them with the most directly comparable U.S. GAAP measure. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation. These non-GAAP financial measures should be considered supplements to, not substitutes for, or superior to, the corresponding financial measures calculated in accordance with U.S. GAAP.

The tables below reconcile our non-GAAP financial measures to the nearest financial measure that is in accordance with U.S. GAAP for the periods presented.

Adjusted Operating Income, Adjusted Operating Income Margin and Adjusted Earnings Per Share (Non-GAAP measures)

Adjusted operating income and adjusted operating income margin are not defined under U.S. GAAP. Therefore, they should not be considered a substitute for earnings data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. Solventum defines adjusted operating income as operating income excluding the effects of amortization, restructuring costs, Spin-Off and separation-related costs, certain litigation-related costs, separation-related impacts due to the sale of the Purification and Filtration business, gain on sale of businesses, and acquisition-related costs. Adjusted operating income margin is adjusted operating income divided by the U.S GAAP measure total net sales for the same period. The company believes adjusted operating income and adjusted operating income margin provide investors with visibility into the company's unleveraged, pre-tax operating results and reflects underlying financial performance. However, adjusted operating income should not be construed as inferring that the company's future results will be unaffected by the items for which the measure adjusts.

Adjusted diluted earnings per share is not defined under U.S. GAAP. Therefore, it should not be considered a substitute for earnings data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. Solventum defines adjusted diluted earnings per share as net income excluding the after-tax effects of amortization, restructuring costs, Spin-Off and separation-related costs, certain litigation-related costs, legal entity restructuring costs, separation-related impacts due to the sale of the Purification and Filtration business, gain on sale of businesses, acquisition-related costs, and loss on debt extinguishment, net. The company believes adjusted earnings per share provides investors with improved comparability of underlying operating results and a further understanding and additional transparency regarding how the company evaluates the business. However, adjusted earnings per share should not be construed as inferring that the company's future results will be unaffected by the items for which the measure adjusts.

Solventum Corporation

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES – (CONTINUED)*

(Unaudited)

Three months ended December 31, 2025

(Dollars in millions, except per share amounts)

Net sales

Cost of

Sales 5

Gross

Margin %

Operating

Expenses 6

Operating

Income

Operating

Income

Margin %

Non-

Operating

Expense

(Income),

net 7

Income

Before

Income

Taxes

Net Income

Attributable

Solventum

Diluted

EPS

Effective

Tax Rate

GAAP

$ 1,998

$ 971

51.4 %

$ 934

$ 124

6.2 %

$ 65

$ 58

$ 63

$ 0.36

(8.3) %

Non-GAAP Adjustments:

Amortization of acquisition-related intangible assets

—

(77)

3.8

—

0.37

Restructuring costs (a)

(1)

—

(51)

2.6

—

0.23

3M spin-off and separation-related costs (b)

(42)

2.1

(104)

146

7.3

—

146

111

0.63

Certain litigation-related costs (d)

—

(22)

1.1

—

0.09

Purification and Filtration separation-related (e)

—

(5)

(0.3)

—

(5)

(0.03)

Gain on sale of business (f)

—

(31)

(1.6)

—

(31)

(22)

(0.13)

Acquisition-related costs (g)

—

(12)

0.6

—

0.05

Non-GAAP

$ 1,998

$ 929

53.5 %

$ 672

$ 397

19.9 %

$ 65

$ 332

$ 277

$ 1.57

16.6 %

*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum.

Three months ended December 31, 2024

(Dollars in millions, except per share amounts)

Net sales

Cost of

Sales 5

Gross

Margin %

Operating

Expenses 6

Operating

Income

Operating

Income

Margin %

Non-

Operating

Expense

(Income),

net 7

Income

Before

Income

Taxes

Net Income

Attributable

Solventum

Diluted

EPS

Effective

Tax Rate

GAAP

$ 2,074

$ 955

54.0 %

$ 983

$ 136

6.6 %

$ 123

$ 13

$ 30

$ 0.17

(142.0) %

Non-GAAP Adjustments:

Amortization of acquisition-related intangible assets

—

(88)

4.2

—

0.42

Restructuring costs (a)

(23)

1.0

(42)

3.1

—

0.30

3M spin-off and separation-related costs (b)

(24)

1.2

(108)

132

6.4

—

132

0.57

Legal entity restructuring (c)

—

(10)

(0.06)

Non-GAAP

$ 2,074

$ 908

56.2 %

$ 745

$ 422

20.4 %

$ 123

$ 299

$ 247

$ 1.41

17.4 %

*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum.

(a)

2025 restructuring costs primarily related to the Company's Transform for the Future program. Includes employee termination costs of $42 million and other costs of $11 million, which includes third-party consulting and compensation for employees dedicated to the program. 2024 restructuring costs primarily relate to the Company's Solventum Way program. Includes employee termination costs of $46 million and other costs of $16 million, which includes asset write-offs and other contractual third party termination costs.

(b)

Consists of costs specifically incurred in connection with the Company's separation from 3M.

(c)

Reflects the tax impacts for legal entity restructuring in connection with the separation from 3M.

(d)

Consists of charges and recoveries related to certain litigation business and related transaction cost.

(e)

Costs related to the separation of the Company's Purification and Filtration business, including legal, finance and tax advisory, and information technology-related.

(f)

Primarily related to the sale of a business within the Company's Health Information Systems clinician solutions portfolio.

(g)

Transaction costs and employee retention related to the acquisition of Acera Surgical.

5 Cost of sales is the combination of cost of product and cost of software and rentals line items from the Consolidated Statements of Income and represents the total company cost of sales.

6 Operating expenses is the combination of selling, general and administrative expenses and research and development expenses from the Consolidated Statements of Income and represents the total company other operating expenses.

7 Non-operating expense (income), net is the combination of interest expense, net, loss on debt extinguishment, net, and other expense (income), net line items from the Consolidated Statements of Income and represents the total company non-operating expense.

Solventum Corporation

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES – (CONTINUED)*

(Unaudited)

Twelve months ended December 31, 2025

(Dollars in millions, except per share amounts)

Net sales

Cost of

Sales 5

Gross

Margin %

Operating

Expenses 6

Operating

Income

Operating

Income

Margin %

Non-

Operating

Expense

(Income),

net 7

Income

Before

Income

Taxes

Net Income

Attributable

Solventum

Diluted

EPS

Effective

Tax Rate

GAAP

$ 8,325

$ 3,874

53.5 %

$ 3,819

$ 2,181

26.2 %

$ 468

$ 1,713

$ 1,556

$ 8.88

9.2 %

Non-GAAP Adjustments:

Amortization of acquisition-related intangible assets

—

(312)

312

3.7

—

312

264

1.50

Restructuring costs (a)

—

(10)

0.1

(70)

1.0

—

0.34

3M spin-off and separation-related costs (b)

—

(139)

1.7

(439)

579

7.0

—

579

444

2.54

Certain litigation-related costs (d)

—

(51)

0.6

—

0.22

Purification and Filtration separation-related (e)

—

(45)

0.5

—

0.19

Gain on sale of business (f)

—

(1,549)

(18.6)

—

(1,549)

(1,397)

(7.97)

Loss on debt extinguishment, net (h)

—

(82)

0.35

Acquisition-related costs (g)

(12)

0.1

—

0.05

Non-GAAP

$ 8,325

$ 3,725

55.2 %

$ 2,890

$ 1,709

20.5 %

$ 386

$ 1,324

$ 1,070

$ 6.11

19.1 %

*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum.

Twelve months ended December 31, 2024

(Dollars in millions, except per share amounts)

Net sales

Cost of

Sales 5

Gross

Margin %

Operating

Expenses 6

Operating

Income

Operating

Income

Margin %

Non-

Operating

Expense

(Income),

net 7

Income

Before

Income

Taxes

Net Income

Attributable

Solventum

Diluted

EPS

Effective

Tax Rate

GAAP

$ 8,254

$ 3,661

55.6 %

$ 3,557

$ 1,036

12.6 %

$ 431

$ 605

$ 479

$ 2.76

20.9 %

Non-GAAP Adjustments:

Amortization of acquisition-related intangible assets

—

(349)

349

4.2

—

349

291

1.68

Restructuring costs (a)

—

(28)

0.3

(50)

0.9

—

0.35

3M spin-off and separation-related costs (b)

—

(74)

0.9

(275)

349

4.2

(38)

387

306

1.76

Legal entity restructuring (c)

—

0.14

Non-GAAP

$ 8,254

$ 3,559

56.9 %

$ 2,882

$ 1,812

22.0 %

$ 392

$ 1,419

$ 1,162

$ 6.70

18.1 %

*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum.

(a)

2025 restructuring costs primarily related to the Company's Transform for the Future program and Solventum way program. Includes employee termination costs of $70 million and other costs of $10 million, which includes third-party consulting and compensation for employees dedicated to the program. 2024 restructuring costs primarily relate to the Company's Solventum Way program. Includes employee termination costs of $62 million and other costs of $16 million, which includes asset write-offs and other contractual third party termination costs.

(b)

Consists of costs specifically incurred in connection with the Company's separation from 3M.

(c)

Reflects the tax impacts for legal entity restructuring in connection with the separation from 3M.

(d)

Consists of charges and recoveries related to certain litigation business and related transaction cost.

(e)

Costs related to the separation of the Company's Purification and Filtration business, including legal, finance and tax advisory, and information technology-related.

(f)

Gain on sale of the Purification and Filtration business, net of applicable tax impacts, in addition to a business in the Health Information Systems business .

(g)

Transaction and employee retention costs related to the acquisition of Acera Surgical.

(h)

Premium paid and related expenses incurred in connection with tender of debt, net of gains from related interest rate hedging contracts.

5 Cost of sales is the combination of cost of product and cost of software and rentals line items from the Consolidated Statements of Income and represents the total company cost of sales.

Solventum Corporation

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES – (CONTINUED)*

(Unaudited)

Free Cash Flow (non-GAAP measure):

Free cash flow is not defined under U.S. GAAP. Therefore, it should not be considered a substitute for income or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The company defines free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. The company believes free cash flow is meaningful to investors as it is a useful measure of liquidity and the company uses these measures as an indication of the strength of the company and its ability to generate cash. Free cash flow varies across quarters throughout the year. Below find a recap of free cash flow.

(Dollars in millions)

Three months ended

December 31,

Twelve months ended

December 31,

Major GAAP Cash Flow Categories

2025

2024

2025

2024

Net cash provided by operating activities

$ 96

$ 219

$ 369

$ 1,185

Net cash provided by (used in) investing activities

(746)

(127)

2,797

(380)

Net cash used in financing activities

(115)

(104)

(3,057)

(240)

Free Cash Flow (non-GAAP measure)

Net cash provided by operating activities

$ 96

$ 219

$ 369

$ 1,185

Purchases of property, plant and equipment

(63)

(127)

(379)

(380)

Free cash flow

(10)

805

*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum.

SOURCE Solventum