SOLV 10-K & 10-Q changes, risk factors and insider trading
Solventum Corp · NYSE · Surgical & Medical Instruments & Apparatus · CIK 1964738 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “The deployment and use of artificial intelligence ("AI"), machine learning, or other emerging technologies in Solventum’s products and services, including as part of its research and development efforts, or its failure to adapt its products or services to industry trends and developments related to such technologies in a timely manner, or at all, could adversely affect Solventum’s business, financial condition, results of operations and cash flows.”
New heading “Solventum may not be able to effectively integrate acquired businesses into its operations or achieve expected cost savings or profitability from its acquisitions.”
New heading “Solventum’s restructuring program may not be successful or Solventum may not fully realize the expected cost savings and/or operating efficiencies from its restructuring initiatives.”
Removed heading “Summary of Risk Factors”
Largest changes
The impacts of climate change may include physical risks (e.g., rising sea levels or frequency and severity of extreme weather conditions, including natural disasters), social and human effects (e.g., population dislocations, economic disruption, political and social instability or harm to health and well-being)see in full comparison, compliance costsand transition risks (e.g., regulatory or technology changes), shifts in market trends (e.g., customers increasingly prioritize purchasing products that are sustainably made) and other adverse effects.SuchInimpactsaddition,maySolventumcausefacesphysicalthedamage to Solventum’s facilities as well as thoserisk ofitsincreasedsuppliers,compliancecustomers and other business partners, and disrupt Solventum’s supply chain and operations by adversely affecting its ability to procure goods or services required for the operation of its business at the quantities and levels it requirescosts due toimpairmentregulationofaimedtheatavailabilityeliminating carbon intensive inputs to its products; imposing climate-related costs associated with product sterilization, disposal, or recycling; and/or imposing an economic costofoncertaincarbonproducts,suchmaterials,asnaturalthroughresources,carboncommoditiestaxesandorenergy.cap-and-trade systems.
“•Security and data breaches, cyberattacks and other cybersecurity incidents involving Solventum’s information technology systems and infrastructure could disrupt or interfere with Solventum’s operations.”see in full comparison
“Solventum’s restructuring program may not be successful or Solventum may not fully realize the expected cost savings and/or operating efficiencies from its restructuring initiatives.”see in full comparison
“The deployment and use of artificial intelligence ("AI"), machine learning, or other emerging technologies in Solventum’s products and services, including as part of its research and development efforts, or its failure to adapt its products or services to industry trends and developments related to such technologies in a timely manner, or at all, could adversely affect Solventum’s business, financial condition, results of operations and cash flows.”see in full comparison
In the ordinary course of business, Solventum relies on centralized and local information technology networks and systems, some of which are provided, hosted or managed by vendors and other third parties, to process, transmit and store electronic information, and to manage or support a variety of businesses. That technology includes systems that could be used to process, transmit and store sensitive information, including personal information, protected health information, employee data, financial information, intellectual property, clinical data and sales and marketing data. Further, Solventum expects that the breadth and complexity of its information technology networks and systems will increase as it expands its product and service offerings to utilize AI, machine learning, and other emerging technologies. Third parties and threat actors, including organized criminals, nation-state or nation-state supported actors who are increasingly well-resourced, regularly attempt to gain unauthorized access to the information technology networks and infrastructure, data and other information used by or belonging to Solventum, and many such attempts are increasing in their frequency, sophistication and intensity and are not recognized until launched against a target. In addition, AI is increasing in use among such third parties and threat actors which may lead to more sophisticated and targeted phishing attempts, cyberattacks, phishing attempts, or otherwise enhance the social engineering capabilities of such parties. Despite Solventum’s cybersecurity and business continuity measures (including employee and third-party training, monitoring of networks and systems, patching, maintenance and backup of systems and data), its information technology networks and infrastructure are still potentially susceptible to attack, compromise, damage, disruption or shutdown, including as a result of the exploitation of known or unknown hardware or software vulnerabilities in its systems, the introduction of computer viruses or ransomware, service or cloud provider disruptions or security breaches, phishing attempts, employee error or malfeasance, power outages, telecommunication or utility failures, systems failures, natural disasters or other catastrophic events. Furthermore, Solventum relies on third-party vendors to supply and/or support certain aspects of its information technology systems and resulting products. These third-party systems could also become vulnerable to cyber-attack, malicious intrusions, breakdowns, interference or other significant disruptions, and may contain defects in design or manufacture or other problems that could result in system disruption or compromise the information security of Solventum’s own systems. Solventum’s increased adoption of remotesee in full comparisonworking, initially driven by the COVID 19 pandemic,working also introduces additional threats and risk of disruptions to its information technology networks and infrastructure. Geopolitical conflict may increase cybersecurity risks on a global basis.
•Datasee in full comparisonPrivacyPrivacy, Emerging Technology and Cybersecurity Laws - Because Solventum is a business with a significant global footprint, compliance with evolving regulations and standards in dataprivacyprivacy, emerging technologies, and cybersecurity may result in increased costs, compliance challenges and the threat of increased regulatory enforcement activity. Solventum’s business relies on the secure electronic transmission, storage and hosting of sensitive information, including personal information, protected health information, financial information, intellectual property and other sensitive information related to our customers and workforce. Solventum is required to comply with increasingly complex and changing legal and regulatory requirements that govern the collection, use, storage, security, transfer, disclosure and other processing of personaldatadata, including for the development and use of AI, in the U.S. and in othercountries,countries.including,Examples of those laws include, but are not limited to, the Health Insurance Portability and Accountability Act of1996 (“HIPAA”),1996, asamended,amended by the Health Information Technology for Economic and Clinical Health Act of2009,2009 (collectively, HIPAA), various U.S. state consumer privacy laws that have become effective recently, theCaliforniaEUConsumer Privacy Act (“CCPA”) and other similar state laws in the U.S., the European Union’s GlobalGeneral Data Protection Regulation (“Regulation (EU) 2016/679 (GDPR”),and theU.K.’sUnitedDataKingdom'sProtectionversionActof2018theandsame,GeneraltheDataLeiProtectionGeraiRegulation,de Proteção de Dados Pessoias (Brazil LGPD), China’s Personal Information ProtectionLaw,Law (PIPL), PRC Cybersecurity Law and Personal Data Cross Border Transfer Rule, the European Union's Artificial Intelligence Act and various other country-specific requirements at the state and federal level around the world. In addition, privacy laws and regulations are becoming stricter and may potentially impose additional requirements on Solventum’s business, and certain jurisdictions have implemented data localization laws which can be costly and operationally difficult to satisfy. Similarly, the legal and regulatory landscape surrounding AI is rapidly evolving and uncertain and includes an increasingly large amount of complex, stringent, and inconsistent global regulations, including with regard to certification requirements in many of the countries in which Solventum's customers are located. Solventum cannot be sure how these laws and regulations will be interpreted,enforcedenforced, or applied to itsoperations.operations, products and services. In addition to the risks associated with enforcement activities and potential contractual liabilities, Solventum’s ongoing efforts to comply with evolving laws and regulations may be costly and require ongoing modifications or limitations to its products, services, policies, procedures and systems. If Solventum or third parties are unable to effectively manage the use of AI or other emerging technologies by employees and third party providers, Solventum or third parties may fail to adequately safeguard confidential personal data, or if such information or data are wrongfully used by Solventum or third parties or disclosed to unauthorized persons or entities, such an event could result in a material adverse effect on its business, results of operations, financial condition and cash flows.
Full comparison: every changed paragraph (87)
Summary of Risk Factors
•Solventum’s historical financial information for periods prior to the Spin-Off is not necessarily representative of the results or performance that it would have achieved as a separate, publicly traded company.
•Solventum may not achieve some or all of the expected benefits of the Spin-Off.
•Solventum’s accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which it is subject to as a standalone publicly traded company.
•In connection with the Spin-Off, Solventum incurred debt obligations and may incur additional obligations in the future, which could adversely affect its business and profitability and its ability to meet other obligations.
•Solventum may not be able to engage in desirable capital-raising or strategic transactions following the Spin-Off.
•If the Spin-Off, together with certain related transactions, were to fail to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, Solventum and its shareholders could be subject to significant tax liabilities.
•The transfer to Solventum of certain contracts, permits and other assets and rights may have required the consents or approvals of, or provide other rights to, third parties and governmental authorities.
•Following the Spin-Off, Solventum’s commercial relationships with 3M remain significant, which could adversely affect Solventum’s business, its ability to meet other obligations and the market price of its common stock.
•Solventum’s results may be impacted by the effects of, and changes in, worldwide economic, political, regulatory, international trade and geopolitical conditions, war and other events beyond its control.
•Our brands are critical to our success, and damage to our reputation or our brands could adversely affect our business, results of operations or financial condition.
•Acquisitions, strategic alliances, divestitures and other strategic events resulting from portfolio management actions and other evolving business strategies, and possible further organizational restructuring, could affect future results.
•Solventum may not be able to access the capital and credit markets on terms that are favorable to Solventum, or at all.
•Change in Solventum’s credit ratings could increase cost of funding.
•Changes in interest rates could adversely affect Solventum.
•Solventum operates in highly competitive markets, competition may increase in the future and the healthcare industry may be disrupted, necessitating that Solventum lower prices or resulting in a loss of market share.
•Consolidation in the healthcare industry could have an adverse effect on Solventum’s revenues and results of operations.
•Reductions in customers’ research budgets or government funding may adversely affect Solventum’s business.
•Solventum’s growth objectives are largely dependent on the timing and market acceptance of its new products and services.
•The success of many of Solventum’s products depends upon certain key healthcare professionals.
•Changes in reimbursement practices of third-party payers or other cost containment measures or worsening economic conditions could affect the demand for Solventum’s products and the prices at which they are sold.
•Solventum’s future results are subject to vulnerability with respect to materials and availability of purchased components, compounds, raw materials, energy, production capacity and labor.
•3M is the sole source of supply for raw materials used in certain of our products and our business will be harmed if 3M does not satisfy our requirements.
•Solventum is subject to risks related to international, federal, state and local treaties, laws and regulations, as well as related compliance risks.
•Solventum may face potential liabilities related to PFAS, which could adversely impact Solventum’s results.
•Solventum operates in a strictly regulated industry, and compliance with laws and regulations applicable to the commercialization of Solventum’s products is costly and failure to comply may result in significant penalties.
•Solventum is subject to laws and regulations governing government contracts and public procurement in many jurisdictions, as to which the failure to comply could adversely affect Solventum’s business.
•Solventum is exposed to risks associated with product liability claims, including existing claims and claims resulting from the actions or inactions of its customers or third parties that are outside of its control.
•Security and data breaches, cyberattacks and other cybersecurity incidents involving Solventum’s information technology systems and infrastructure could disrupt or interfere with Solventum’s operations.
•Solventum may be unable to obtain, maintain, protect or effectively enforce its intellectual property rights.
•Changes in tax rates, laws or regulations could adversely impact Solventum’s financial results.
•Solventum’s tax burden could increase as a result of ongoing or future tax audits and inquiries.
•Solventum could be negatively impacted by future changes in the allocation of income to each of the income tax jurisdictions in which Solventum operates.
•A significant number of shares of Solventum common stock may be sold by 3M or others, which may cause the Solventum stock price to decline.
•Because Solventum does not currently intend to pay any dividends on its common stock, holders of its common stock must rely on stock appreciation for any return on their investment.
•Anti-takeover provisions could enable Solventum’s Board of Directors to resist a takeover attempt by a third party and limit the power of its shareholders.
The historical financial information of Solventum for periods prior to the Spin-Off included in this Annual Report is derived from the Consolidated Financial Statements and accounting records of 3M. Accordingly, the financial information included herein does not necessarily reflect the financial condition, results of operations or cash flows that Solventum would have achieved as a separate, publicly traded company during the periods presentedprior to the Spin-Off or those that Solventum will achieve in the future primarily as a result of the factors described below:
•Prior to the Spin-Off, Solventum’s working capital requirements and capital for its general corporate purposes, including capital expenditures and acquisitions, had historically been satisfied as part of the corporate-wide cash management policies of 3M. Following the Spin-Off, Solventum’s results of operations or cash flows may be more vulnerable to changing market conditions and therefore more volatile.
•The cost of capital for Solventum’s business may be higher than 3M’s cost of capital prior to the Spin-Off, and Solventum may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements in order to fund capital expenditures and investments, payreturn dividendscapital andto shareholders or service debt, which may or may not be available and may be more costly.
•Solventum has and will continue to incur costs in connection with the separation from 3M and the related transition agreements entered into with 3M.
Solventum may not achieve these and other anticipated benefits for a variety of reasons, including, among others: (1) the operation of Solventum as a standalone public company continues to demand significant management resources and require significant amounts of management’s time and effort, which may divert management’s attention from operating and growing Solventum’s business; (2) Solventum may continue to be required to pay costs that could be substantial and material to its financial resources, including costs associated with separating its operations from 3M and for related transition services, as well as increased accounting, tax, legal and other professional services costs, recruiting and relocation costs associated with hiring key senior management and personnel new to Solventum, tax costs and other costs; and (3) operational challenges as a standalone company, including those related to customer service, pace of change and productivity improvements, could result in additional expenses or reductions in productivity. If Solventum fails to achieve some or all of the benefits expected to result from the Spin-Off, or if such benefits are delayed, it could have a material adverse effect on its competitive position, business, financial condition, results of operations and cash flows.
To comply with these requirements, Solventum has needed to migrate its systems, including information technology systems and enterprise resource planning systems, implement additional financial and management controls, reporting systems and procedures and hire additional accounting and finance staff. Solventum has incurred and expects to incur additional annual expenses related to these steps, and those expenses may be significant. If Solventum is unable to implement appropriate financial and management controls, reporting systems, information technology and procedures in a timely and effective fashion, its ability to comply with its financial reporting requirements and other rules that apply to reporting companies under the Exchange Act could be impaired. In addition, implementation of management controls, reporting systems, information technology and procedures may result in additional material costs to Solventum. Any failure to achieve and maintain effective internal controls in a timely, effective and cost-effective manner could have a material adverse effect on its business, financial condition, results of operations and cash flows.
In connection with the Spin-Off, Solventum completed certain financing transactions. As a result of such transactions and the subsequent repayment of debt with proceeds from the divestiture of the Purification and Filtration business, as of December 31, 2024,2025, Solventum had approximately $8.0$5 billion of outstanding indebtedness. Depending on market or other economic conditions, Solventum could also incur additional indebtedness in the future.
•Solventum could be negatively affected if it is required to make material payments pursuant to its indemnification obligations to 3M such as with respect to certain taxes (and any related costs and other damages) resulting from the separation and/or for uninsured liabilities related to the Bair Hugger patient warming system under the Separation and Distribution Agreement and certain other 3M Agreements. In addition, 3M’s indemnity of Solventum with respect to certain liabilities relating to PFAS prior to Spin-Off may not be sufficient to protect Solventum against the full amount of such liabilities if, for example, 3M fails to fully satisfy its indemnification obligations or disputes whether that liability aroseis priorsubject to the Spin-Off.indemnification.
•The disposition by 3M of its remaining ownership interest in Solventum, which currently represents 19.9%approximately 14.8% of the outstanding Solventum common stock, may be subject to various conditions, including receipt of any necessary regulatory and other approvals and the existence of satisfactory market conditions. These conditions may not be satisfied or 3M may decide for any other reason not to consummate the disposition and instead retain a significant ownership interest in Solventum for a period of time, not exceeding five years. Satisfying the conditions relating to such disposition may require actions that 3M has not anticipated. Any delay by 3M in completing the disposition could have a material adverse effect on the market price for Solventum common stock.
Solventum develops, manufactures, distributes and sells its products globally, and, accordingly, Solventum’s operations and the execution of its business strategies and plans are subject to global competition and economic and geopolitical risks that are beyond its control, such as, among other things, disruptions in financial markets, economic downturns, military conflicts, political changes and trends such as protectionism, economic nationalism or regionalism resulting in government actions impacting international trade agreements, imposing trade restrictions such as tariffs, and retaliatory countermeasures, changes in regulatory regimes that could restrict Solventum’s ability to manufacture and sell its products (including healthcare regulatory regimes), diminished or insufficient protection of intellectual property and government deficit reduction and other austerity measures in locations or industries in which Solventum operates. For example, changes in the policies or practices of government programs, authorities or agencies (e.g., Medicare and Medicaid in the U.S.) resulting from the change in the U.S. presidential administration could adversely impact the amount of funding Solventum’s customers have for its products and services. Trade and tariff actions have had an impact on Solventum and its suppliers and may have material adverse effects on Solventum's business, financial condition, results of operations and cash flows. Further escalation of specific trade tensions, including those between the U.S. and China, or more broadly of global trade conflict, could adversely impact Solventum’s business and operations around the world. Solventum’s business is also impacted by social, political and labor conditions in locations in which Solventum or its suppliers or customers operate; adverse changes in the availability and cost of capital; monetary policy; interest rates; inflation; recession; commodity prices; currency volatility or exchange control; ability to expatriate earnings; and other laws and regulations in the jurisdictions in which Solventum or its suppliers or customers operate.
The deployment and use of artificial intelligence ("AI"), machine learning, or other emerging technologies in Solventum’s products and services, including as part of its research and development efforts, or its failure to adapt its products or services to industry trends and developments related to such technologies in a timely manner, or at all, could adversely affect Solventum’s business, financial condition, results of operations and cash flows.
Solventum has begun to deploy AI in its products and services, including as part of its research and development efforts, and Solventum expects to continue to explore additional uses as AI continues to develop. In addition, Solventum intends to devote significant resources to develop and deploy cloud, edge and software solutions in its healthcare solutions. For example, Solventum has incorporated AI into certain products in the Health Information Systems business segment and certain of its digital offerings and expects to continue to build AI into additional products. Any disruption or failure in the AI, machine learning, or other emerging technologies Solventum deploys or uses in its products and services, including as part of its research and development efforts, could adversely impact Solventum’s business, including as a result of flawed AI algorithms, insufficient or biased datasets, malfunctions or manipulations, unintentional release of confidential information, or product or service delays or recalls. In addition, any failure to successfully deploy or use such technologies in Solventum’s products and services, or to adapt to medical technology industry trends and developments related to such technologies in a timely manner (or at all), particularly as competitors incorporate such technologies into new and existing products and services, could adversely affect customer demand for Solventum’s products and its competitiveness. The deployment of AI, machine learning or other emerging technologies into Solventum’s products and services will require additional investment and increase its costs. Furthermore, the rapid advancement of technology, including AI, creates additional risks as Solventum includes such technology into its products and services, including from confidentiality, privacy, data protection, cybersecurity and compliance perspectives, and raises intellectual property issues and operational, technological and other concerns. Any of the above factors could adversely affect Solventum’s business, financial condition, results of operations and cash flows.
Public health crises such as the COVID-19 pandemic may increase Solventum’s cost of doing business and disrupt Solventum’s operations.
Due to Solventum’s global operations, Solventum’s business is and will be impacted by public health crisescrises, suchepidemics asand the COVID-19 pandemicpandemics in the locations in which Solventum or its suppliers or customers operate, and these events have adversely affected, and could in the future adversely affect, Solventum’s operations and financial performance. ForAs example,a result of such events, we have in the globalpast COVID-19experienced, pandemic,and includingin the relatedfuture governmentalmay responses to it, has significantlyexperience, increased economic and demand uncertainty and hascould impactedexperience andadverse will continueimpacts to impact Solventum’s operations, including its supply chain and; its manufacturing and distribution capabilities.capabilities; Insite addition,shutdowns, theworkplace COVID-19disruptions; pandemicrestrictions hason adverselymovement impactedof thepeople, continuedraw servicematerials and availabilitygoods (both at our own facilities and at those of skilledour personnel necessary to run Solventum’s operations, including through increased absenteeism in connection with the rise of COVID-19 variantscustomers and objectionssuppliers); toglobal governmentalsupply vaccinechain mandates or heightened safety protocols. To the extent Solventum’s management or other personnel are impacted in significant numbers by COVID-19 or another public health crisisdisruptions and areprice not available to perform their professional duties, Solventum could experience disruptions in its manufacturing operations or disruptions in other activities and other functions.inflation. Solventum is not able to predict the impact of public health crisescrises, suchepidemics asor the COVID-19 pandemic,pandemics, which may have a material adverse effect on its business, cash flows, financial condition and results of operations.
Our reputation and our brands could in the future be damaged by negative publicity, whether or not valid. Negative publicity could relate to our company, our brands, our products, our supply chain, our ingredients, our packaging, our ESGsustainability and social impact practices, our employees or any other aspect of our business. Our reputation or our brands could also be adversely affected by negative publicity related to our industry, our competitors, our competitors’ products, our customers or our third-party partners, including healthcare professionals, and other individuals with whom we have relationships, even if the publicity is not directly related to our company or our brands and even if the publicity is not accurate. In addition, widespread use of digital and social media platforms around the world has greatly increased the accessibility of information and the speed with which it is disseminated, which has made, and likely will continue to make, maintaining our reputation and our brands more challenging. Damage to our reputation or our brands could cause employees, consumers, customers and third-party partners to lose trust in our business or our products, require us to expend substantial resources to remedy the damage or otherwise adversely affect our business, results of operations or financial condition.
Solventum monitors its business portfolio and organizational structure and may make acquisitions, divestitures and changes to its organizational structure or enter into strategic alliancesalliances, equity investments or joint ventures. For example, on September 2, 2025, Solventum announced the close of its sale of the Purification & Filtration business ("P&F") to Thermo Fisher Scientific Inc. for $4.0 billion in cash before customary adjustments. In addition, on December 23, 2025, Solventum acquired Acera Surgical ("Acera"), a privately held bioscience company focused on developing and commercializing fully engineered materials for regenerative wound care, for cash consideration of $696 million, net of cash acquired, plus a future payment of $125 million dependent on the acquired business achieving a sales-based milestone. These activities have resulted, and any future activities may resultresult, in substantial investment of Solventum’s resources. The success of any such activities will depend upon a number of factors, including Solventum’s ability to:
•successfully separate any divested business;
In addition, acquisitions may expose Solventum to significant risks and uncertainties, including failure to identify significant non-compliant behaviors or practices by, or liabilities relating to, the acquisition target (or its agents) prior to acquisition; successor liability imposed by regulators for actions by the acquisition target (or its agents) prior to acquisition; and diversion of management’s attention from existing operations to the acquisition and integration process. Equity and other investments and strategic alliances pose additional risks, as Solventum could share ownership in companies and, in some cases, management responsibilities with one or more other parties whose objectives for the alliance may diverge from those of Solventum over time; who may not have the same priorities, strategies, or resources as Solventum does; or whose interpretation of applicable policies may differ from those of Solventum. Such transactions will be subject, in certain circumstances, to the consent of 3M under the Tax Matters Agreement that Solventum entered into with 3M, as discussed in “"—Risks Related to the Spin-Off and Solventum’s Relationship with 3M.”" There can be no assurance that any future transactions of this type will be pursued or, if pursued, will be successful.
Solventum may not be able to effectively integrate acquired businesses into its operations or achieve expected cost savings or profitability from its acquisitions.
Solventum’s acquisitions involve numerous risks, including:
•unforeseen difficulties in integrating personnel and sales forces, operations, manufacturing, logistics, research and development, information technology, compliance, vendor management, communications, purchasing, accounting, marketing, administration and other systems and processes;
•difficulties harmonizing and optimizing quality systems and operations;
•diversion of financial and management resources from existing operations;
•unforeseen difficulties related to entering markets for which or geographic regions where Solventum does not have prior experience;
Management's Discussion & Analysis (MD&A)
New heading “Healthcare Market Drivers”
New heading “Changing demographics”
New heading “Optimizing workflows to improve care quality and operational efficiency”
New heading “Increasing digital technology and data-driven care delivery”
New heading “Shifting care from the hospital to lower-cost care sites”
New heading “Increasing demand for personalized care”
New heading “Year ended 2025 results”
New heading “Gain on Sale of Business”
New heading “Goodwill and Intangible Assets”
Removed heading “Year ended 2023 results”
Largest changes
As of December 31,see in full comparison2024,2025, goodwill totaled approximately$6.4$5.7 billion. The Company has four reportingunits,units that are assigned goodwill, with the MedSurg reporting unit accounting for approximately5674 percent of thegoodwill.goodwillBasedbalance.onIntheconnection with our annualteststesting in the fourth quarter of2024, 2023, and 2022,2025, nogoodwillqualitative indicators of impairmentwaswereindicatedidentified for any of the Company's reporting units.Further,Fortherereportingwereunitsnowhereeventsquantitativeortestingchangeswas completed, the fair value exceeded the carrying value of the reporting unit by at least 65 percent. On December 23, 2025, subsequent to our annual impairment test, the Company completed the acquisition of Acera. Preliminary goodwill related to the acquisition was recognized and is included incircumstances duringtheyearbalanceendedof our MedSurg reporting unit at December 31,2024 that would indicate the carrying amount of a reporting unit may be impaired.2025. The Company will continue to monitor its reporting units for any triggering events or other indicators of impairment.
The Company makes certain estimates and judgments in impairment assessments of goodwill. Goodwill is tested for impairment annually in the fourth quarter of each year, as further discussed below, and is tested between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. The Company may assess qualitative factors for its reporting units to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount including goodwill. Alternatively, the Company may bypass this qualitative assessment and perform a quantitative goodwill impairment test.see in full comparison
“Costs of product includes manufacturing, engineering and logistics costs. The Company operates a global supply chain and sourcing organization, including product sourced under master supply and transition manufacturing agreements with 3M. As a result, the Company is impacted by changes in the global regulatory and economic environment, including tariffs. The evolving regulatory and economic environment may impact our cost or ability to source products. To the extent possible the Company takes actions to offset these costs or identify alternative sources of supply.”see in full comparison
“Optimizing workflows to improve care quality and operational efficiency”see in full comparison
Full comparison: every changed paragraph (120)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Company’s consolidated financial statements and corresponding notes elsewhere in this Annual Report on Form 10-K. The following discussion and analysis provides information management believes to be relevant to understanding the financial condition and results of operations of Solventum for the years ended December 31, 20242025 and 2023.2024. Discussion, analysis and comparisons of the year ended December 31, 2023 that are not included in this Annual Report on Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Annual Report on Form 10-K for the year ended December 31, 2024 filed on February 28, 2025. This discussion contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “"Risk Factors.”" See “"Cautionary Note Regarding Forward-Looking Statements.”"
All amounts discussed are in millions of U.S. dollars, unless otherwise indicated. CertainAmounts reported within this Annual Report are rounded to the nearest million and the sum of the components may not equal the total amount reported due to rounding. Additionally, certain columns and rows within tables may not add upsum due to the use of rounded numbers.rounding.
Solventum manages its operations in three reportable business segments: MedSurg, Dental Solutions, and Health Information Systems. On February 25, 2025, the Company entered into a Transaction Agreement to sell its Purification and Filtration business to Thermo Fisher Scientific Inc. ("Buyer"). On June 25, 2025, the Company and Buyer entered into an Amended and Restated Transaction Agreement to exclude the Company’s drinking water filtration business (the "Water Business") from the scope of the Purification and Filtration business to be acquired by Buyer (such acquired business, the "Business"). On September 1, 2025, Solventum completed the sale of the Business to the Buyer in accordance with the terms of the Agreement. The cash consideration paid to Solventum at closing was approximately $4 billion. Refer to Note 3, "Acquisitions and Divestitures" for additional information.
Solventum manages its operations in four business segments: MedSurg, Dental Solutions, Health Information Systems, and Purification and Filtration.
References are made to organic sales change, which is defined as the change in net sales, absent the separate impacts on sales from foreign currency translation and acquisitions, net of divestitures. Constant currency, as reflected in the tables below, is defined as the change in net sales absent the impact on sales from foreign currency translation. Other, as comprised in the tables below, includes acquisition and divestiture-related activities. Acquisitions include sales from Acera that was acquired in December 2025, non-health care 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 dentalPurification anestheticsand Filtration business that was sold in AugustSeptember 2023 as well as lost sales from2025, certain health care businesses retained by 3M India in connection with the Spin-Off.Spin-Off, as well as impacts from other immaterial divested businesses. Solventum believes this information is useful to investors and management in understanding ongoing operations and in analysis of ongoing operating trends.
Healthcare Market Drivers
Changing demographics
An aging population, the prevalence and incidence rates of chronic conditions, and a rising middle class are driving the demand for improved access to quality care.
Optimizing workflows to improve care quality and operational efficiency
Of the $5.3 trillion in annual U.S. healthcare spending, an estimated 25% represents administrative costs that do not contribute to health outcomes and which we believe to be potentially wasteful based on overall spending data reported by the Centers for Medicare & Medicaid Services in the NHE Fact Sheet (available on CMS.gov as of January 14, 2026) and administrative spending estimates published in JAMA (Shrank et. al., Waste in the US Health Care System: Estimated Costs and Potential for Savings, published October 7, 2019). As healthcare providers and payers face increasing reimbursement constraints and evolving payment models, the need to reduce avoidable administrative costs has become more acute. Our solutions are designed to optimize workflows, enabling clinicians to be more productive by spending less time on administrative tasks and more time focused on improving the patient care experience. Our solutions also support reducing infections and complications that lead to an increase in avoidable administrative and clinical costs.
Increasing digital technology and data-driven care delivery
Both clinicians and patients have shifted their preferences towards utilizing digitally enabled solutions to provide data-driven care. Whether it is interactions with patients through a digital interface or the use of data, analytics, and artificial intelligence (AI) to support informed health decisions, the need for digital tools in the healthcare industry has grown over time. Our solutions integrate digital processes, AI-enabled capabilities and data in multiple ways and across different parts of the healthcare industry and are intended to enable efficient and effective delivery of care.
Shifting care from the hospital to lower-cost care sites
Although hospitals continue to be a core site for delivery of care, patients are increasingly looking for flexibility of care when and where they need it. Alternative care sites, such as ambulatory surgery centers, wound care clinics, retail pharmacies, and the home, are more affordable and accessible to patients. We believe our solutions enable clinicians to extend their care delivery from acute to ambulatory to home settings without compromising the quality of care and while reducing the total cost of care.
Increasing demand for personalized care
Engaging patients in a personalized way allows clinicians to provide a better care experience while improving outcomes and reducing costs. This spans several areas of healthcare, including customized orthodontic aligner treatments, and follow-up wound care at home. We believe our solutions deliver personalized care options in a way that is patient-centric, scalable, and cost-effective.
Our ability to take advantage of these market opportunities will be subject to various risks, including general economic, business and market dynamic risks, the impact of our separation from 3M; and the cost to service the debt we incurred in connection with the separation. See Part I, Item 1A, "Risk Factors" in this Annual Report on Form 10-K, for a discussion of these risks, which you should consider carefully.
The following tables contain sales and operating results by business segment for all periods presented. The Company’s use of the term “NM” reflects results considered not material due to not having material activity in comparable prior years. Refer to the section entitled “"—Performance by Business Segment”" below for discussion of sales change and operating performance. Refer to Note 1718 to the consolidated financial statements for additional information on the Company's business segments.
While the Company manages its businesses globally and believes its business segment results are the most relevant measure of performance, the Company also utilizes geographic area data as a secondary performance measure. Sales are generally reported within the geographic area thatbased originatedon the invoicelocation toof the Company'scustomer customer.taking possession of the products or in which services are rendered. Additional geographic financial information related to the Company’s operations is provided in Note 1718 in the accompanying consolidated financial statements.
Year ended 2025 results
•In the United States geographic area, both total sales and organic sales increased. Organic growth was led by MedSurg and Health Information Systems. Other is comprised of lost sales due to the divestiture of the Purification and Filtration business in September 2025.
•In the International geographic area, total sales declined while organic sales increased. Organic growth was led by MedSurg and Dental Solutions. Other is comprised of lost sales due to the divestiture of the Purification and Filtration business in September 2025.
•In the International geographic area, total sales decreased while organic sales increased. Organic growth was led by MedSurg and Purification and Filtration.
Year ended 2023 results
•In the United States geographic area, all business segments saw organic sales growth year on year, led by Health Information Systems and MedSurg.
•In the International geographic area, total sales growth and organic sales growth decreased. Organic growth decline in Purification and Filtration was partially offset by organic growth in MedSurg and Dental Solutions.
Prior to April 1, 2024, Solventum indirectly participated in 3M’s centrally managed hedging program, which utilizes a number of tools to manage currency risk including natural hedges such as pricing, productivity, hard currency, hard currency-indexed billings, and localizing source of supply. 3M also used financial hedges to mitigate currency risk.program. Starting in the second quarter of 2024, Solventum established its own hedging program. Refer to Note 1011 to the consolidated financial statements for additional details.
Foreign currency had a positive worldwide impact on sales for the year ended December 31, 2025 compared to 2024. Solventum estimates that year-on-year foreign currency transaction effects, including hedging impacts, increased pre-tax income by approximately $6 million in 2025.
Costs of product includes manufacturing, engineering and logistics costs. The Company operates a global supply chain and sourcing organization, including product sourced under master supply and transition manufacturing agreements with 3M. As a result, the Company is impacted by changes in the global regulatory and economic environment, including tariffs. The evolving regulatory and economic environment may impact our cost or ability to source products. To the extent possible the Company takes actions to offset these costs or identify alternative sources of supply.
Costs of product includes manufacturing, engineering and freight costs.
Costs of product, measured as a percent of sales of product, increased in 20242025 when compared to 2023.2024. The increase was driven by increased costs due to the impact of highernew coststariffs onof approximately $55 million, the full year impact from inventory sourced under the master supply and transition manufacturing agreements with 3M3M, and duehigher tologistics thecosts, partially offset by benefits from cost ofsavings other transition support provided by 3M.programs.
Costs of product, measured as a percent of sales of product, increased in 2024 when compared to 2023. The increase was driven by increased costs due to the impact of higher costs on inventory sourced under the master supply and transition manufacturing agreements with 3M and due to the cost of other transition support provided by 3M that have been incurred since Spin-Off.
Costs of product, measured as a percent of sales of product, increased in 2023 when compared to 2022. Material and labor inflation, partially offset by benefits from both price and logistics costs, drove an increase of 0.7%. The material and labor inflation was primarily driven by a 1.4% impact from a higher cost of inventory produced in 2022 but sold in 2023.
Costs of software and rentals includes compensation-related costs associated with installation, training and maintenance for our software products, and depreciation, maintenance and refurbishment costs and freightlogistics costs related to our hardware rental units.
Costs of software and rentals, measured as a percent of sales of software and rentals, decreased in 2025 as compared to 2024. The decrease was due to the impact of lower external license fees, price and sales mix, primarily driven by higher sales of our revenue cycle management solution.
Costs of software and rentals, measured as a percent of sales of software and rentals, decreased in 2023 as compared to 2022 due to product mix from higher software sales.
SG&A, measured as a percent of total net sales, increased in 2025 when compared to 2024. The increase was driven by costs incurred to separate the Purification and Filtration business, higher compensation, including equity-based awards, and higher costs associated with both initial stand-up and ongoing operations to support a standalone company.
SG&A, measured as a percent of total net sales, decreased slightly in 2023 when compared to 2022. This decrease was driven by the impact of the gain related to the sale of the Company’s dental local anesthetic business of 0.7%, partially offset by higher expense due to restructuring charges of 0.5%.
R&D, measured as a percent of total net sales, decreased slightly in 2025 when compared to 2024 primarily due to reimbursement of a portion of our technical development costs from 3M related to our supply chain separation.
Gain on Sale of Business
The gain on sale of business primarily relates to the Company's completed sale of the Purification and Filtration business in the third quarter of 2025, which resulted in a net gain of $1.5 billion for 2025.
R&D, measured as a percent of total net sales, decreased slightly in 2023 when compared to 2022 as the Company prioritized investment initiatives.
Interest Expense, NetNet, Loss on Debt Extinguishment, Net, and Other Expense (Income), Net
Interest expense, net includes interest accrued on debt obligations, offset by interest income from cash and marketable securities. Interest expense, net decreased in 2025 as compared to 2024 due to lower interest expense as a result of lower debt outstanding. Interest expense, net increased in 2024 as compared to 2023 due to interest incurred on the February 2024 issuance of senior notes and March 2024 draw on the senior term loan credit facilities. Refer to Note 89 to the consolidated financial statements for more information. This increase was partially offset by interest earned from cash and marketable securities held during the period. There was no material activity in the years ended December 31, 2023 or 2022.
Loss on debt extinguishment, net includes charges incurred in the third quarter of 2025 from the differential between carrying value and the amount paid to acquire the tendered Senior Notes and related expenses. Refer to Note 9 to the consolidated financial statements for additional information. These charges were partially offset by the gain from interest rate swaps entered into and subsequently settled in connection with the sale of the Purification and Filtration business. Refer to Note 11 to the consolidated financial statements for additional information.
Other expense (income), net includes the non-service component of periodic pension cost, investment gains and losses, and currency-related impacts from foreign currency translation.transaction gain (loss). Other expense (income), net decreased in 2025 as compared to 2024 primarily due to charges associated with the substantial liquidation of foreign operations completed as part of our separation from 3M. Other expense (income), net increased in 2024 as compared to 2023 resulting from charges associated with the substantial liquidation of foreign operations completed as part of our separation from 3M in addition to foreign currency impacts and investment losses.
Other expense (income), net increased in 2023 as compared to 2022 due to investment losses and higher foreign currency transaction losses.
The change in the effective tax rate in 2025 when compared to 2024 was primarily driven by impacts associated with the sale of the Purification and Filtration business. Refer to Note 8 to the consolidated financial statements for additional detail on the Company's effective tax rate.
Refer to Note 7 to the consolidated financial statements for further discussion of income taxes.
Note 1718 to the consolidated financial statements provides an overview of Solventum’s reportable business segments in addition to disclosures relating to Solventum’s segments. WeUpon closing the sale of our Purification and Filtration business, we primarily manage our operations in fourthree business segments. The reportable segments are: MedSurg, Dental Solutions, and Health Information Systems, and Purification and Filtration.Systems. Our Chief Operating Decision Maker evaluates segment operating performance using net sales and business segment operating income.
All Other
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.
Certain items are maintained at the corporate level and not allocated to the segments ("Corporate and Unallocated"). Prior to Spin-Off, Corporate and Unallocated primarily includedincludes amortization of acquired intangible assets, restructuring and related charges, andtiming related benefits or costs relatedassociated towith capitalized manufacturing variances.variances, charges and recoveries related to certain litigation, transaction and employee retention costs related to the acquisition of Acera, and gains on sale of businesses. In addition, Corporate and Unallocated also includes Spin-Off and separation related costs. Spin-Off and separation related costs include any costs incurred as part of our separation from 3M and costs to setup operations as a standalone company, including system implementations, manufacturing relocations, legal entity separations, certain equity awards granted as part of the Spin-Off, profit mark-ups on transition service arrangements with 3M and other one-time costs. Corporate and Unallocated also includes income and costs related to transition service agreements entered into in connection with the sale of the Purification and Filtration business.
Corporate and Unallocated also includes sales and cost of sales related to our supply agreements with 3M and other supply agreements assumed by the Company at Spin-Off related to legacy 3M businesses. Because Corporate and Unallocated includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis.
Sales in MedSurg were up 3.9%:
•Organic growth was driven by volumes in our Infection Prevention and Surgical Solutions business, led by I.V. site management. Growth within our Advanced Wound Care business was led by volume growth in negative pressure wound therapy.
•Other primarily includes lost sales from certain health care businesses retained by 3M India in connection with the Spin-Off.
•Foreign currency translation positively impacted sales by 0.6%.
Business segment operating income margin decreased when compared to the same period last year. The decrease was primarily driven by the impact of higher product costs due to tariffs, logistics and a full year of supply agreement mark-ups from 3M.
Sales in MedSurg were up 1.0%:
What changed in the latest 10-Q
Risk Factors
New heading “Risks related to Solventum’s review of strategic alternatives for its health information system business”
Largest changes
“Risks related to Solventum’s review of strategic alternatives for its health information system business”see in full comparison
“Our business, financial condition and operating results are affected by a number of factors, whether currently known or unknown, including risks specific to us or our industry, as well as risks that affect businesses in general. In addition to the factors set forth under the caption "Cautionary Note Concerning Forward-Looking Statements" set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors described in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. …”see in full comparison
“We are evaluating strategic alternatives for our health information systems business. The review may not result in the identification or implementation of a strategic alternative, and any alternative that is pursued may not be completed within any given timeframe or at all. We may be unable to successfully execute any strategic alternative or realize any or all strategic, operational, or financial benefits. The review process may also create uncertainty to our customers, employees and other constituencies or counterparties and divert management attention from ongoing operations. …”see in full comparison
“There have been no material changes to the risk factors as disclosed in our 2025 Annual Report on Form 10-K.”see in full comparison
Full comparison: every changed paragraph (4)
Our business, financial condition and operating results are affected by a number of factors, whether currently known or unknown, including risks specific to us or our industry, as well as risks that affect businesses in general. In addition to the factors set forth under the caption "Cautionary Note Concerning Forward-Looking Statements" set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors described in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The risk factor set forth below updates, and should be read in conjunction with, the risk factors disclosed in such Annual Report on Form 10-K. Other than the risk factor set forth below, we believe there have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. However, additional risks and uncertainties not currently known or which we currently deem to be immaterial may also materially adversely affect our business, financial condition, or results of operations.
There have been no material changes to the risk factors as disclosed in our 2025 Annual Report on Form 10-K.
Risks related to Solventum’s review of strategic alternatives for its health information system business
We are evaluating strategic alternatives for our health information systems business. The review may not result in the identification or implementation of a strategic alternative, and any alternative that is pursued may not be completed within any given timeframe or at all. We may be unable to successfully execute any strategic alternative or realize any or all strategic, operational, or financial benefits. The review process may also create uncertainty to our customers, employees and other constituencies or counterparties and divert management attention from ongoing operations. We may incur costs and expenses in connection with the review process, whether or not a transaction is successful. In addition, we may determine to abandon the review, pursue a different structure, or take no action. Any of these factors could have a material adverse effect on our business, financial condition, results of operations, or cash flows.
Management's Discussion & Analysis (MD&A)
New heading “Separation of Health Information Systems Business”
New heading “Dental Solutions (17.9% and 17.8% of consolidated sales for the three and six months ended June 30, 2026)”
New heading “Health Information Systems (16.0% and 16.5% of consolidated sales for the three and six months ended June 30, 2026)”
Removed heading “Dental Solutions (17.6% of consolidated sales for the three months ended March 31, 2026)”
Removed heading “Health Information Systems (17.0% of consolidated sales for the three months ended March 31, 2026)”
Largest changes
Cost of product, measured as a percent of sales of product,see in full comparisonincreaseddecreased in both the second quarter and firstquartersix months of 2026whenas compared to thefirstsamequarterperiodsoflast2025.year. Theincreasedecrease was primarily driven byincreasedIEEPAcoststariffduerefundstoand theimpactbenefitoffromhigherprogrammaticsourcingsavingscosts, including tariffs which did not impact the first quarter of 2025. Higher costs wereprograms, partially offset bytheinflationbenefitandfromtariffportfoliocosts,actions,whichincludinghad minor impacts in both thesalesecond quarter and first six months ofthe Purification and Filtration business, and other cost savings initiatives.2025.
“Business segment operating income margin increased when compared to the same period last year. The increase was primarily driven by recognition of receivables for IEEPA tariff refunds and cost savings programs, including Transform for the Future benefits. These increases were partially offset by higher product costs due to tariffs and other inflation, including freight.”see in full comparison
“Business segment operating income margin decreased when compared to the same period last year. The decrease was primarily driven by the impact of higher product costs due to tariffs and other inflation, including freight. These additional costs were partly offset by savings programs, including Transform for the Future benefits.”see in full comparison
“Health Information Systems (16.0% and 16.5% of consolidated sales for the three and six months ended June 30, 2026)”see in full comparison
“Business segment operating income margin increased when compared to the same period last year as benefits from price, volume, savings programs, including Transform for the Future, and recognition of receivables for IEEPA tariff refunds, partially offset by tariffs and inflation, including freight.”see in full comparison
“Business segment operating income margin increased when compared to the same period last year as benefits from price, volume, savings programs, including Transform for the Future, and recognition of receivables for IEEPA tariff refunds, partially offset by tariffs and inflation, including freight.”see in full comparison
Full comparison: every changed paragraph (68)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Solventum Corporation's ("Solventum," "we," "our," "us," or the "Company") condensed consolidated financial statements and corresponding notes elsewhere in this Quarterly Report on Form 10-Q. The following discussion and analysis provides information management believes to be relevant to understanding the financial condition and results of operations of Solventum for the three and six months ended MarchJune 31,30, 2026 and 2025. For full understanding of the Company’s financial condition and results of operations, the discussion below should be read alongside the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s 2025 Annual Report on Form 10-K. This discussion contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed below and elsewhere in this Quarterly Report on Form 10-Q, and particularly in Item 1A, “Risk Factors” in the Company’s 2025 Annual Report on Form 10-K.
Separation of Health Information Systems Business
On August 5, 2026, the Company announced its intention to pursue a separation of its Health Information Systems business as part of the company's ongoing portfolio optimization strategy. The company will evaluate a range of separation pathways with the objective of maximizing shareholder value that position both businesses for long-term success, accelerated innovation and enhanced growth opportunities.
In 2025, the United States government announced new tariffs on imported goods from certain countries,countries. and inIn response, foreignsome governmentsof havethose countries threatened or imposed retaliatory tariffs orand other actions.measures. On February 20, 2026, the United States Supreme Court issued a decision concluding that the International Emergency Economic Powers Act (the "IEEPA") does not provide authority for the President to impose tariffs. During 2025, certain tariffs that affectedimpacted us were imposed under this statute pursuant to presidential executive order.order, Afterwhich theare ruling,expected theto be fully refunded. The U.S. Presidenthas signed an Executive Order whichsubsequently implemented a new tarifftariffs under Sectiondifferent 122authorities, authority.including Sections 122, 301, 338 and 232. The Company will continue to monitor developments.
IEEPA tariff refunds are accounted for as a gain contingency and are recognized in the financial statements when fully realized or realizable. Refunds attributed to inventory previously sold are recorded as a reduction to cost of product and refunds attributed to hardware units are recorded as a reduction to carrying value of the capitalized assets.
In April 2026, the U.S. Customs and Border Protection ("CBP") agency formalized a process for refunds. In June 2026, the Company submitted requests for refunds that were accepted by the CBP totaling approximately $120 million, including interest. The Company recognized a corresponding receivable for this amount within the condensed consolidated financial statements as of June 30, 2026.
On March 4, 2026, the U.S. Court of International Trade ruled that certain tariffs imposed under the IEEPA were unlawful and directed the U.S. Customs and Border Protection to refund the collected IEEPA tariffs. The administrative process for seeking refunds of IEEPA tariffs previously paid remains under development and ultimate financial impact of this decision cannot be reasonably estimated at this time. The extent and timing of any potential recoveries of tariffs previously paid remain subject to further legal interpretation and administrative processes. The U.S. Administration has signaled that further tariffs under new authority will be released in 2026. The Company will continue to monitor developments and will evaluate the effect of the ruling on future reporting periods as additional information becomes available.
Due to uncertainty around process, timing, and amount of any recovery, the Company has not recorded any potential benefit from a refund as of March 31, 2026.
Solventum manages its operations in three reportable business segments: MedSurg, Dental Solutions, and Health Information Systems. On February 25, 2025, the Company entered into a Transaction Agreement to sell its Purification and Filtration business to Thermo Fisher Scientific Inc. ("Buyer"). On June 25, 2025, the Company and Buyer entered into an Amended and Restated Transaction Agreement (as amended, the "Agreement"), to exclude the Company’s drinking water filtration business (the "Water Business") from the scope of the Purification and Filtration business to be acquired by Buyer (such acquired business, the "Business"). On September 1, 2025, Solventum completed the sale of the Business to the Buyer in accordance with the terms of the Agreement. The cash consideration paid to Solventum at closing was approximately $4 billion.
During the second quarter 2026, the Company benefited from advanced customer ordering in connection with the Company's July 2026 U.S. enterprise resource planning ("ERP") deployment. Sales growth for the three months ended June 30, 2026 benefited by approximately $125 million due to these advanced orders. The Company anticipates that sales in the third quarter of 2026 will be negatively impacted as customers reduce inventory to normal levels.
Percent change information compares the three and six months ended MarchJune 31,30, 2026 with the same period for the prior year, unless otherwise indicated.
•In the United States geographic area, both total sales and organic sales increased. Organic growth occurred across all segments, led by MedSurg and HealthDental InformationSolutions, Systems.partly driven by advanced customer ordering in connection with the Company's ERP deployment. Other is comprised of lost sales due to the divestiture of the Purification and Filtration business in September 2025, partially offset by sales from the December 2025 Acera acquisition.
•In the International geographic area, both total sales anddecreased while organic sales decreased.increased. Organic growth inoccurred across all segments, led by Dental Solutions was more than offset by decreases in both MedSurg and Health Information Systems.MedSurg. Other is comprised of lost sales due to the divestiture of the Purification and Filtration business in September 2025.
•In the United States geographic area, both total sales and organic sales increased. Organic growth occurred across all segments, led by MedSurg and Dental Solutions, partly driven by advanced customer ordering in connection with the Company's ERP deployment. Other is comprised of lost sales due to the divestiture of the Purification and Filtration business in September 2025, partially offset by sales from the December 2025 Acera acquisition.
•In the International geographic area, total sales decreased while organic sales increased. Organic growth was led by Dental Solutions and MedSurg, while Health Information Systems was flat. Other is comprised of lost sales due to the divestiture of the Purification and Filtration business in September 2025.
Foreign currency had a positive worldwide impact on sales for the firstsecond quarter 2026 compared to the same period last year. Solventum estimates that year-on-year foreign currency transaction effects, including hedging impacts, decreased pre-tax income by approximately $5 million and $10 million for the three and six months ended MarchJune 31,30, 2026, respectively.
Cost of product, measured as a percent of sales of product, increaseddecreased in both the second quarter and first quartersix months of 2026 whenas compared to the firstsame quarterperiods oflast 2025.year. The increasedecrease was primarily driven by increasedIEEPA coststariff duerefunds toand the impactbenefit offrom higherprogrammatic sourcingsavings costs, including tariffs which did not impact the first quarter of 2025. Higher costs wereprograms, partially offset by theinflation benefitand fromtariff portfoliocosts, actions,which includinghad minor impacts in both the salesecond quarter and first six months of the Purification and Filtration business, and other cost savings initiatives.2025.
Cost of software and rentals includes compensation-related costs associated with installation, training and maintenance for our software products, and depreciation, maintenance and refurbishment costcosts and logistics costs related to our hardware rental units.
Cost of software and rentals, measured as a percent of sales of software and rentals, decreased during both the second quarter and first quartersix months of 2026 as compared to the same periodperiods last year due to the impact, driven by benefits from both price and product mix.
SG&A, measured as a percent of total net sales, increased in both the second quarter and first quartersix months of 2026 when compared to the same period last year. The increase was driven by accrued legal expenses, partially offset by insurance recoveries, and higher costs associated with activities to separate operations from 3M and the cost of actions, net of savings from our Transform for the Future restructuring program.3M.
R&D, measured as a percent of total net sales, was relatively flatdecreased in both the second quarter and first quartersix months of 2026 when compared to the same period last year. The increasedecrease was driven by the impact of higher sales in advance of the ERP deployment and higher capitalized software development costs, partially offset by additional amortization expense from the acquisition of Acera.
Interest expense, net includes interest accrued on debt obligations, offset by interest income from cash and marketable securities. Interest expense, net decreased for both the three and six months ended MarchJune 31,30, 2026 as compared to the same period last year due to lower interest expense as a result of lower debt outstanding.
Other expense (income), net includes the non-service component of periodic pension cost, investment gains and losses, and foreign currency transaction gain (loss). Other expense (income), net decreasedincreased slightly for the three months ended MarchJune 31,30, 2026 as compared to the same period last year primarily due to higher foreign currency transaction losses mostly offset by lower periodic pension costs and losses on investments in the prior year. Other expense (income), net decreased for the six months ended June 30, 2026 as compared to the same period last year primarily due to lower periodic pension costs and higher gains on investments.
MedSurg (61.5%62.1% and 61.8% of consolidated sales for the three and six months ended MarchJune 31,30, 2026)
•Organic growth was primarilyimpacted by approximately $85 million or 7.0% due to advanced order timing ahead of the Company's U.S. ERP deployment. In addition, growth was driven by volume growth in I.V. site management products, including Tegaderm CHG, within our Infection Prevention and Surgical Solutions business. Advanced Wound Care business growth was driven by negative pressure wound therapy and advanced skin care.therapy. Growth was partially offset by our SKU rationalization program, which had a larger impact on our Infection Prevention and Surgical Solutions business.
•Other includes sales from the Company's December 2025 acquisition of Acera.
•Foreign currency translation positively impacted sales by 3.0%.
Business segment operating income margin decreased when compared to the same period last year. The decrease was primarily driven by the impact of higher product costs due to tariffs and other inflation, including freight. These additional costs were partly offset by savings programs, including Transform for the Future benefits.
Dental Solutions (17.6% of consolidated sales for the three months ended March 31, 2026)
Sales in Dental Solutions were up 7.9%:
•Organic growth in restorative and prevention solutions was partially offset by a decrease in orthodontics solutions. Both volume and price contributed to growth, led by new products launched in the prior year.
•Foreign currency translation positively impacted sales by 4.5%.
•Foreign currency translation positively impacted sales by 1.1% Business segment operating income margin increased when compared to the same period last yearyear. asThe benefitsincrease fromwas price,primarily volumedriven by recognition of receivables for IEEPA tariff refunds and cost savings programs, including Transform for the Future,Future benefits. These increases were partially offset by higher product costs due to tariffs and inflation.other inflation, including freight.
Health Information Systems (17.0% of consolidated sales for the three months ended March 31, 2026)
Sales in Health Information SystemsMedSurg were up 4.1%9.7%:
•Organic growth was impacted by approximately $85 million or 3.6% due to advanced order timing ahead of the Company's U.S. ERP deployment. In addition, growth was driven by volume in I.V. site management products, including Tegaderm CHG, within our Infection Prevention and Surgical Solutions business. Advanced Wound Care business growth was driven by negative pressure wound therapy. Growth was partially offset by our SKU rationalization program, which had a larger impact on our Infection Prevention and Surgical Solutions business.
•Other includes sales from the Company's December 2025 acquisition of Acera.
•Foreign currency translation positively impacted sales by 2.0%.
Business segment operating income margin increased when compared to the same period last year. The increase was primarily driven by recognition of receivables for IEEPA tariff refunds and cost savings programs, including Transform for the Future benefits. These increases were partially offset by higher product costs due to tariffs and other inflation, including freight.
Dental Solutions (17.9% and 17.8% of consolidated sales for the three and six months ended June 30, 2026)
Sales in Dental Solutions were up 17.0%:
•Organic growth was impacted by approximately $35 million or 10.4% due to advanced order timing ahead of the Company's U.S. ERP deployment. In addition, organic growth was driven by both restorative and prevention solutions and orthodontics solutions. Both volume and price contributed to growth, led by new products launched in the prior year.
•Foreign currency translation positively impacted sales by 1.8%.
Business segment operating income margin increased when compared to the same period last year as benefits from price, volume, savings programs, including Transform for the Future, and recognition of receivables for IEEPA tariff refunds, partially offset by tariffs and inflation, including freight.
Sales in Dental Solutions were up 12.5%:
•Organic growth was impacted by approximately $35 million or 5.2% due to advanced order timing ahead of the Company's U.S. ERP deployment. In addition, organic growth was driven by both restorative and prevention solutions and orthodontics solutions. Both volume and price contributed to growth, led by new products launched in the prior year.
•Foreign currency translation positively impacted sales by 3.1%.
Business segment operating income margin increased when compared to the same period last year as benefits from price, volume, savings programs, including Transform for the Future, and recognition of receivables for IEEPA tariff refunds, partially offset by tariffs and inflation, including freight.
Health Information Systems (16.0% and 16.5% of consolidated sales for the three and six months ended June 30, 2026)
Sales in Health Information Systems were up 4.4%:
Business segment operating income margin increased when compared to the same period last year, driven by price, favorable mix and savings from Transform for the Future.
Sales in Health Information Systems were up 4.3%:
•Positive organic growth was driven by continued adoption of our Solventum™ 360 EncompassTM and performance management solutions.
•Clinician productivity solutions declined primarily due to impacts from changing market conditions.
•Foreign currency translation positively impacted sales by 0.5%.
The Company had approximately $90$93 million and $82 million in bank guarantees, surety bonds, and other similar instruments issued and outstanding at MarchJune 31,30, 2026 and December 31, 2025, respectively. These instruments are utilized in connection with normal business activities.
On March 4, 2024, the Company entered into a commercial paper program that allows it to issue up to $2.0 billion aggregate principal amount of short-term notes to finance short-term liabilities. Any such issuance will mature within 364 days from the date of issue. There was no commercial paper outstanding as of MarchJune 30, 2026 or December 31, 2026.2025.
As of MarchJune 31,30, 2026, Solventum had $561$403 million of cash and cash equivalents, of which approximately $488$291 million was held by the Company’s foreign subsidiaries and approximately $73$112 million was held in the United States. These balances are invested in bank instruments and other high-quality fixed income securities. As of December 31, 2025, Solventum had $878 million of cash and cash equivalents, of which approximately $800 million was held by the Company’s foreign subsidiaries and $78 million was held in the United States. There were immaterial amounts of marketable securities at both MarchJune 31,30, 2026 and December 31, 2025.
In the first threesix months of 2026, cash flows usedprovided inby operating activities increaseddecreased compared to the first threesix months of 2025 primarily due to higher payments for annual incentive compensation and payments made in connection with the exit of certain transition agreements with 3M.
In the first threesix months of 2026, cash flows used in investing activities decreased compared to the first threesix months of 2025 primarily due to capital spending related to the Purification and Filtration business that was included in the prior year comparable period.
SOLV insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-01 | Hanson Bryan C |
Option exercise | 67,261 | — | — |
| 2026-09-01 | Hanson Bryan C |
Shares withheld for tax | 26,468 | $90.95 | $2.4M |
| 2026-05-13 | Gomez Tammy L |
Shares withheld for tax | 1,668 | $74.41 | $124.1K |
| 2026-05-13 | Gomez Tammy L |
Option exercise | 3,960 | — | — |
| 2026-05-13 | Mcmillan Wayde D. |
Shares withheld for tax | 4,404 | $74.41 | $327.7K |
| 2026-05-13 | Mcmillan Wayde D. |
Option exercise | 9,503 | — | — |
| 2026-05-13 | Harrington Paul S |
Option exercise | 3,960 | — | — |
| 2026-05-13 | Harrington Paul S |
Shares withheld for tax | 1,678 | $74.41 | $124.9K |
| 2026-05-13 | Wilcox Mary T |
Option exercise | 2,376 | — | — |
| 2026-05-13 | Wilcox Mary T |
Shares withheld for tax | 728 | $74.41 | $54.2K |
| 2026-05-13 | Kirberger Marcela A. |
Shares withheld for tax | 1,952 | $74.41 | $145.2K |
| 2026-05-13 | Kirberger Marcela A. |
Option exercise | 4,488 | — | — |
| 2026-05-13 | Hanson Bryan C |
Shares withheld for tax | 13,503 | $74.41 | $1.0M |
| 2026-05-13 | Hanson Bryan C |
Option exercise | 34,315 | — | — |
| 2026-05-13 | Landucci Amy |
Option exercise | 4,422 | — | — |
| 2026-05-13 | Landucci Amy |
Shares withheld for tax | 2,017 | $74.41 | $150.1K |
| 2026-04-30 | Wendell Amy Mcbride |
Option exercise | 3,403 | — | — |
| 2026-04-30 | Weiland John H |
Option exercise | 3,403 | — | — |
| 2026-04-30 | Mily Elizabeth |
Option exercise | 3,403 | — | — |
| 2026-04-30 | Wilson Darryl L. |
Option exercise | 3,403 | — | — |
| 2026-04-30 | May Karen J |
Option exercise | 3,403 | — | — |
| 2026-04-30 | Harris Bernard A Jr |
Option exercise | 3,403 | — | — |
| 2026-04-30 | Eisenberg Glenn A |
Option exercise | 3,403 | — | — |
| 2026-04-30 | Edwards Shirley Ann |
Option exercise | 3,403 | — | — |
| 2026-04-30 | Devore Susan D. |
Option exercise | 3,403 | — | — |
| 2026-04-30 | Cox Carrie Smith |
Option exercise | 4,916 | — | — |
| 2026-04-30 | Alban Carlos |
Option exercise | 3,403 | — | — |
Well-known investors holding SOLV (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Trian Fund Management (Nelson Peltz) | 2026-06-30 | 8,236,753 | $635.5M | 15.02% | No change |
| Davis Selected Advisers (Chris Davis) | 2026-06-30 | 6,307,729 | $486.7M | 2.09% | No change |
| Millennium Management (Israel Englander) | 2026-06-30 | 1,199,940 | $92.6M | 0.06% | Added 122% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 1,082,100 | $83.5M | 0.03% | Added 48% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 763,416 | $58.9M | 0.14% | Added 23% |
| D. E. Shaw & Co. | 2026-06-30 | 526,392 | $40.6M | 0.03% | Added 261% |
| Bridgewater Associates | 2026-06-30 | 177,921 | $13.7M | 0.06% | Added 5167% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 102,705 | $7.9M | 0.01% | New position |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 98,232 | $7.6M | 0.0% | Reduced 84% |
| Two Sigma Investments | 2026-06-30 | 3,435 | $265.0K | 0.0% | New position |