Solventum's Q2 2026 organic sales rose 9.5% and adjusted EPS jumped 51% to $2.55, boosted by ~$125M of orders pulled forward ahead of its July ERP switch and an IEEPA tariff refund, while a $157M Bair Hugger litigation charge held GAAP EPS to $0.53 (+3.9%).
Revenue
$2.2B
+2.2% YoY
Net income
$92M
+2.2% YoY
Diluted EPS
$0.53
+3.9% YoY
Operating margin
8.2%
Overview
Solventum's second quarter of 2026 (three months to June 30) had two very different stories in it. On the surface, sales rose only 2.2% to $2.21 billion, because the year-ago quarter still included $189 million from the Purification and Filtration business sold to Thermo Fisher in September 2025. Strip out that sale, currency moves and the December 2025 Acera acquisition and organic sales grew 9.5%. Organic growth is the like-for-like measure: same businesses in both years, no currency effect. That was the fastest organic growth in the company's short life as a standalone company.
Much of that growth was borrowed from the next quarter, though. The 10-Q says sales "benefited by approximately $125 million" from customers ordering early ahead of Solventum's July 2026 switch to a new US ordering and accounting system (an ERP, or enterprise resource planning, system). Management "anticipates that sales in the third quarter of 2026 will be negatively impacted as customers reduce inventory to normal levels."
Profit moved in two directions. GAAP net income, the figure under standard accounting rules, was nearly flat at $92 million ($0.53 per diluted share), and the GAAP operating margin fell to 8.2% from 9.9%. The company's adjusted EPS, which excludes one-off and non-cash items, jumped 50.9% to $2.55. About $446 million of pre-tax charges separate the two figures, led by a Bair Hugger litigation accrual.
Key figures
Metric
Q2 2026
Q2 2025
YoY Change
Net sales
$2,209M
$2,161M
+2.2%
Organic sales growth (total company)
+9.5%
n/a
n/a
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Source: Q2 2026 Form 10-Q (income statement, MD&A) and the August 5, 2026 earnings release (Exhibit 99.1) for the non-GAAP and cash-flow lines. Gross margin is gross profit divided by net sales.
Segment performance: every unit grew, and the ERP pull-forward inflated two of them
Segment
Q2 2026 sales
Q2 2025 sales
Reported growth
Organic growth
ERP pull-forward effect
Segment operating margin (2026 vs 2025)
MedSurg
$1,372M
$1,218M
+12.7%
+8.9%
~$85M / ~7.0 pts
25.8% vs 17.3%
Dental Solutions
$396M
$338M
+17.0%
+15.2%
~$35M / ~10.4 pts
33.0% vs 28.5%
Health Information Systems
$354M
$339M
+4.4%
+5.4%
not cited
41.0% vs 35.5%
Purification and Filtration (sold)
n/a
$189M
n/a
n/a
n/a
n/a
All Other (retained water business, 3M supply)
$87M
$77M
+11.8%
+10.6%
n/a
n/a
MedSurg (62% of sales; wound care, infection prevention, surgical supplies) reported organic growth of 8.9%, but the 10-Q attributes about 7.0 points of it to advance ERP orders. What remains is roughly 2% underlying growth, which is our subtraction and not a company figure. The filing credits "volume in I.V. site management products, including Tegaderm CHG" and negative-pressure wound therapy in Advanced Wound Care, "partially offset by our SKU rationalization program". That program deliberately drops low-margin product lines. Reported sales also include about 2.7 points from Acera. The segment's margin rose 8.5 points to 25.8%, "primarily driven by recognition of receivables for IEEPA tariff refunds and cost savings programs, including Transform for the Future benefits".
Dental Solutions grew fastest at 15.2% organic, but roughly 10.4 points of that was the ERP pull-forward. That leaves underlying growth of about 5% (again our subtraction), which the company credits to restorative, prevention and orthodontics products, with "both volume and price" contributing and "led by new products launched in the prior year."
Health Information Systems (medical coding, documentation and revenue-cycle software) is the one segment the filing does not tie to the ERP pull-forward. Its 5.4% organic growth came from "continued adoption of our Solventum 360 Encompass and Performance Management Solutions," while clinician productivity solutions declined "due to impacts from changing market conditions." Its margin rose to 41.0% on "price, favorable mix and savings from Transform for the Future." On August 5, 2026 Solventum announced it intends to separate this business. It is the company's highest-margin segment.
Why GAAP profit went nowhere while adjusted EPS rose 51%
Gross profit rose $111 million, but SG&A (selling, general and administrative costs) rose $155 million to $927 million, or 42.0% of sales against 35.7% a year earlier. The 10-Q attributes this to "accrued legal expenses, partially offset by insurance recoveries, and higher costs associated with activities to separate operations from 3M."
The earnings release lists the items excluded from adjusted results (pre-tax, Q2 2026):
$157M of litigation-related costs. The 10-Q says that "based on developments in the Bair Hugger matter, the Company increased its litigation accrual." Bair Hugger is the patient-warming system at the center of roughly 8,400 US lawsuits against 3M, for which Solventum indemnifies 3M.
$145M of costs from separating from 3M, such as new IT systems and moving manufacturing.
$90M of amortization. This is a non-cash charge that writes down the value of acquired intangible assets.
$42M of restructuring costs, $15M of acquisition-related costs and $6M tied to the planned separation of Health Information Systems.
Adding these back gives adjusted operating income of $627 million, compared with $181 million under GAAP.
The adjusted figures were also flattered by two items that will not repeat.
The tariff refund. In February 2026 the US Supreme Court ruled that the IEEPA emergency tariffs imposed in 2025 were unlawful. In June Solventum filed refund claims accepted by US Customs "totaling approximately $120 million, including interest", and booked them as a receivable. Where the tariffs related to inventory already sold, the refund reduces cost of product. This is the main reason cost of product fell to 47.5% of product sales from 51.9%. The company does not state exactly how much of the $120 million went through Q2 profit, but the release names the refund, together with the ERP timing benefit, as the main driver of the higher adjusted margin.
The ERP pull-forward, which added about $125 million of sales at high incremental margins.
Below operating income, net interest expense fell to $64 million from $103 million because of "lower debt outstanding", after part of the ~$4 billion from the Purification and Filtration sale went to paying down debt. That $39 million saving is the main reason pre-tax income edged up to $108 million from $103 million.
Takeaway: Solventum's 9.5% organic growth and 51% adjusted EPS jump overstate the underlying trend. About $125 million of sales was pulled forward from Q3 by customers ordering ahead of the July ERP switch, and a one-time IEEPA tariff refund (about $120 million claimed) boosted margins. Excluding the pull-forward, organic growth was roughly 3–4%, and GAAP EPS rose just 3.9% after a $157 million Bair Hugger litigation charge. The quarter to watch is Q3, when the pull-forward reverses.
Cash, debt and buybacks
Cash flow: Q2 operating cash flow was $227 million and free cash flow was $144 million. Free cash flow is operating cash flow minus capital spending. The release says both were "ahead of expectations driven by timing of tax payments and insurance proceeds." For the first half, operating cash flow was only $38 million, against $198 million a year earlier. The 10-Q blames "higher payments for annual incentive compensation and payments made in connection with the exit of certain transition agreements with 3M." First-half free cash flow was negative $129 million.
Balance sheet: total debt was $5,079 million at June 30, 2026, against $5,035 million at year-end 2025. Cash fell to $403 million from $878 million.
Buybacks: Solventum repurchased 3.9 million shares for about $288 million in Q2, and 4.8 million shares for $355 million in the first half, under a $1 billion program approved in November 2025.
Comparability notes
The divestiture is inside the reported numbers. Purification and Filtration was not reclassified as a discontinued operation. Its $189 million of Q2 2025 sales and $43 million of segment operating income stay in the prior-year column, so reported growth (+2.2%) is about 8 points below organic growth. The first half shows the same effect: reported sales fell 0.4%, while organic sales rose 5.8%.
First-half GAAP comparisons are distorted by tax. H1 2025 had an $86 million tax benefit (an effective tax rate of −61.0%). That is why H1 net income fell 53.7% to $105 million and H1 diluted EPS fell to $0.60 from $1.30, even though pre-tax income fell only 13%.
Outlook
Management raised its full-year 2026 guidance on August 5:
Organic sales growth of +2.5% to +3.0%, up from +2.0% to +3.0%. Excluding about 100 bps (1 percentage point) of drag from product-line exits, the range is +3.5% to +4.0%.
Adjusted EPS of $7.10 to $7.20, above the upper end of the prior $6.40–$6.60 range.
Free cash flow of $200–$300 million, up from about $200 million.
Our read: full-year organic growth of 2.5–3% after first-half organic growth of 5.8% implies second-half organic growth of roughly zero. That is consistent with the ERP pull-forward reversing in Q3, so a soft Q3 sales print is in the plan and should not come as a surprise. The raised adjusted EPS range covers more than the tariff refund. Segment margins improved in every unit, including Health Information Systems, which has no tariff exposure, and the filing credits "Transform for the Future" cost savings in all three. That points to part of the margin gain being structural.
The main risks are outside the adjusted numbers:
Bair Hugger litigation, where the company "is not able to estimate a possible loss or range of possible loss in excess of the recorded liability."
Ongoing 3M separation costs.
Free cash flow that is thin for a company with over $5 billion of debt.
The planned Health Information Systems separation could reshape the company again. It would leave a pure medical-technology business but remove its highest-margin segment (41% operating margin in Q2), so the terms of any deal will matter a lot.