We're moving along with Mark Okerstrom from CFO of Fortive. Thank you so much for joining us here in lovely Washington, D.C.
Yeah, thanks. Great to be here.
Yeah. Just wanted to start off with a basic kind of background on what's happening out in the world today. Kinda have to ask the question about exposures and anything that's going on in the world that is a concern or impact for Fortive, Middle East-wise.
Listen, I'd say we're on track with Fortive accelerated strategy, on track in terms of our strategic initiatives. The Middle East for us is a small portion of our revenue. It's low single digits% of our revenue. We are seeing strong demand for products into the Middle East, so Fluke, Industrial Scientific that does gas sensors, again, seeing strong demand. Some challenges getting shipments into the Middle East. Again, generally, it's a pretty small portion and it's, you know, for better or for worse, seems like it's an opportunity as opposed to a risk for us.
How are you guys, you know, putting the Middle East and what's happening over there aside, how are things kinda trending over the course of the quarter, kinda quarter to date?
Yeah.
Point of sale trends, software sales, anything like that?
Well, I would just reiterate again, we're on track. I think, if you looked at the cadence of 2025, you know, we delivered acceleration in the back half. We were growing, you know, 2.6% core growth. We continued to see strength through January. The teams continue to execute well. Again, I think overall, we're on track.
As far as the investor day is concerned, the longer term growth algorithm, how do you guys think about the building blocks there? Any changes so far? I mean, I know it's recent, but any changes?
No
in how you think about maybe what's better, what's worse
Yeah
kind of how it all nets out on the long term organic?
Yeah. We feel good about it. Again, the framework was 3%-4% core growth, 50-100 basis points of adjusted EBITDA margin expansion and high single digit plus adjusted EPS growth. We're on track. The core drivers to organic acceleration were commercial acceleration. So think about more boots on the ground, more specialized sales teams that has been put in place. More salespeople in India, for example, for ASP and Fluke. More specialized salespeople in Fluke to address data center and defense, for example. The second lever was product innovation. We're seeing the faster pace of innovation across the portfolio. Another Fluke example, the CertiFiber Max, which is now, you know, the fastest and highest bandwidth data center fiber testing device.
Driving more recurring revenue in our ARR continues to grow faster than the overall business. The levers are in place, the framework is set, and we feel good about our ability to deliver on it, and our aspirations are to do much better.
Can you talk about the recurring revenue in your portfolio? Just remind us how big that is, and then by the businesses.
Yeah
what you're seeing in each of those.
Recurring revenue is about 50% of revenue right now. Generally, you know, it is growing faster than the overall business, has been for some time. The biggest piece of recurring revenue is probably, you know, subscription businesses. We've got a software business in the FAL division we talk about, as well as a couple of software businesses in healthcare. Those are roughly 20% or so of revenue, excluding transactional revenue. They continue to grow very nicely. We've also got consumable businesses in ASP, which is, you know, essentially the razor blade model, the razor blades. Then, you know, at Fluke, we've also got a number of other businesses, service plan subscriptions, kinda like AppleCare, as well as some hardware as a service business.
All of those recurring revenue streams are areas of investment for us, and we continue to like the trends we're seeing.
Probably under the one that we recognize as the most software-wise would be FAL.
Mm-hmm.
Maybe just walk through those businesses and what you're seeing there and touch on, perhaps, you know, why this software is more defensive than some other software may be against any kind of disruption from AI.
Yeah.
First of all, just what kind of the various businesses there, and then what drives those and what are you seeing in those markets?
Yeah. There's three main businesses within the FAL group, Facilities and Asset Lifecycle management. The first is Accruent. They do property maintenance and asset management software, you know, in many cases for higher education, you know, some retail, other end markets. The second one is Gordian. Gordian does and actually invented something called Job Order Contracting. It's legislated in many states and jurisdictions that if government buildings need to be maintained or repaired, they have to use the Gordian software and this Job Order Contracting model. The third is ServiceChannel. ServiceChannel is the leader in building maintenance software for multi-site retail. Think Walmart all the way up to Louis Vuitton.
Those stores run the software that ServiceChannel provides, and they create a marketplace, so contractors are checking ServiceChannel every day for work, and it creates this great sort of marketplace effect. If you run through those businesses and you think about kind of their competitive modes, Fortive is a child of Danaher, and the whole thesis was buy high-quality businesses that are in attractive markets where they have competitive moats. The byproduct of the sort of Danaher Fortive legacy is that these are gonna be businesses with those moats, and they do have those moats. You know, each of these businesses are deeply integrated into daily workflow. Technicians are using the applications of Accruent, for example, as they walk around higher education systems and entering data and taking pictures.
You know, same thing with Gordian, same thing with ServiceChannel. These are really niche custom workflows that they run that have been built, you know, essentially over time. Secondly is they've got proprietary data, and not just the data of any particular customer, but importantly, horizontal data. You know, the dataset for public building maintenance and infrastructure for costing is RSMeans, and that's owned by Gordian. It is sort of the standard. If you look across ServiceChannel and Accruent, again, they've got these horizontal datasets that are hugely valuable. In the cases of few of the software businesses like Gordian, they've got regulatory moats. As I mentioned, there's also these network effects, these marketplace effects that we see at both Gordian and ServiceChannel. We feel really good about these businesses.
You know, I wouldn't just take my word for it. I mean, ARR growth continues to grow faster than the fleet. Net dollar retention's around 100%. We feel great about the trends that we see there. We think AI is really an accelerant for these businesses, both in terms of new feature development, but also efficiency. We feel pretty good about the positioning of these businesses. We were just down in Austin with the teams, and I think we came away, Olumide and I, feeling really good about where we are and really good about these businesses' ability to contribute to the acceleration story over time.
When you look at the actual, you know, revenue growth rate here of FAL, I know, you know, back in the day, we were talking about as kind of a, I don't know, a rule of 50 or a rule of 60 type business.
Yeah.
Where are we now on that in that calculation in that? Whatever the rollout is now.
Yeah.
How fast are we growing?
Yeah.
Where can the margins go?
I think it's, you know, Rule of 40 is getting better across the board.
Yeah.
I think, you know, ServiceChannel has been an incredible business for us, growing incredibly strongly, you know, both top and bottom line. We see that continuing for a long way. I mean, that business is expanding verticals, they're expanding geographies. All signs go. Gordian has been a little bit more up and down because it's been exposed to state and local government spending. It seems like, you know, the deferred maintenance backlog is sometimes they at some point, they have to do it. There was a bunch of ripples in 2025. Things seem to have normalized, so we feel pretty good about Gordian's prospects going forward. Accruent has been, you know, a story of kinda revamping the product portfolio and then upleveling the commercial efforts. 2026 portfolio's been largely done and commercial efforts are underway.
We feel pretty good across all three of those platforms that, you know, acceleration and profitable acceleration is, you know, is possible and in most cases likely.
Just remind us of what's the long-term growth algo for the FAL kinda portfolio. Is that a mid-single digit, like 5%-ish or?
I think it depends dramatically on which business we're talking about.
Okay.
I think overall.
Yeah.
you know, you're in the zone. I think there are end markets that are growing significantly faster. ServiceChannel is growing significantly faster than that. Our aspiration is to continue to take share in those markets. I think you're in the zone, and we hope to do better.
Okay. If you look at any of those businesses, which is the one that you're kind of most bullish about? Is there an opportunity to add to any of those businesses with recent valuations coming down?
Yeah.
in software?
You know, I'm probably most bullish on ServiceChannel because of their track record. They're not, you know, as susceptible to ups and downs in, you know, end market spending. Gordian's an incredible business, but, you know, they can be ups and downs. In terms of add-ons, I think we're open-minded, but we don't need to do any deals to actually deliver on our framework and, you know, hopefully more. We'll be opportunistic, but again, they've gotta be great businesses that can be integrated and that we can buy at a fair price and ultimately be accretive to growth and hit our financial and strategic hurdles, and those are pretty high hurdles.
Yeah.
Particularly when we've got such great organic growth prospects, we probably skew a little bit more to the hardware side of things right now in terms of where our M&A pipeline is focused.
How do you look at price in these businesses, the FAL businesses? How much of an annual benefit is price for these software businesses?
Well, it's been mixed. You know, overall price for Fortive has been at around 200 basis points. You know, FAL has been a contributor to that. What we're really having the FAL teams focus on is, as opposed to pushing price, pushing recurring revenue, so transitioning businesses that may be license and maintenance over to SaaS-based, continue to find new features and functionality that create, you know, more stickiness for the business. That's mostly the focus, and I think as we do that, we launch new features, we move to SaaS, there is some opportunities for price. Price isn't the, you know, the primary driver for those businesses. It's gonna be volume.
If you look at the total pie, how much of that now is that SaaS and how much more conversion do you have to go? I mean, some of the revenues obviously may not convert, but how far do you have to go on that?
Yeah. The majority of it is SaaS-
Yeah.
At this point.
Yeah.
We're gonna continue to push it, you know, higher and higher.
In the other businesses from a software perspective, the AHS, the Provation business, how's that trending and what are you guys seeing there?
Provation is doing really well. You know, Provation again does you know, workflow tools and, you know, AI assistance soon, you know, voice translation for GI docs. I think the ambulatory surgery center blowout or expansion has been helpful for them. Physician burnout has been super helpful for them. They've got a lot of tailwinds. The team is innovating well. They're expanding outside of GI into other verticals like anesthesia. You know, not unlike ServiceChannel. It's a team that's executing well. It's a market leader, and they've got multiple vectors for growth that they're executing against.
Is that a mid-single digit or high single digit? Or how do we think about that growth rate?
You know, it's been growing well ahead of that.
Well ahead of that.
Yeah.
Okay. Lastly on the Fluke side, talk about the connected offerings there and how fast that's been growing and just the profile of that. Is that also? It's recurring. Is it SaaS? Do you look at it that way 'cause it's kind of an add-on obviously to the hardware.
Yeah. Fluke's recurring revenue is about 15% of the total.
Yep.
has been growing nicely. There's a few pieces to that, you know, eMaint, which is software.
Yeah.
They've got essentially service plans they're selling, and then they've got Fluke Connect, which is, you know, sort of one of the connected solutions to help connect all of these devices together. Investing in all of those pieces of the business is core to the Fortive accelerated strategy. You know, as Fluke goes, so does Fortive 'cause it's our biggest business.
Yeah.
I think they're very much going to be a driver of the acceleration, as opposed to a laggard. We're optimistic.
The growth Fluke has been a phenomenal growth story over time, really solidly mid-single-digit. Even though you guys kind of define the market as a low single-digit grower, what do you think you guys are doing there that's differentiated?
Yeah.
Maybe explain why this mode of growth is just perpetually so strong.
Yeah. Well, Fluke is just a great business. It's got great brand recognition. It's got a track record for the best of the best in terms of instrument precision, incredible customer loyalty. People get Fluke tattooed on their arms. You can't really walk through an airport wearing a Fluke vest without some electrician stopping you and telling you about his latest Fluke device. It is the highest end of product that is out there. If you think about all the trends that are happening around the world, whether it's data center, whether it's electrification, defense spending, Fluke is positioned across each of these end markets very well. The Fluke device generally sits in the hand of a technician, and there's a shortage of technicians.
When there's a shortage of technicians, that means that ultimately the demand for technicians is higher. They're gonna get paid more. There's gonna be more of them coming. When more of them come, that drives volume. When they get paid more, they're gonna upgrade their $100 device from Home Depot to the $400 or $600 device for Fluke. I think that just creates tailwinds for the business. I think when you add on the velocity with which we are starting now to develop new products and the commercial efforts we put in place for more boots on the ground and more specialized selling, we feel really good about Fluke's prospects going forward.
What's one of the most exciting applications? I know in data centers, like, what exactly are they doing in data centers that is.
Yeah.
You know, that's new or differentiated? I know a couple years ago there was a solar product that was, like, really good.
Yeah.
grew a lot. What's kind of their main new product in data center?
Yeah. Well, the latest is something called the CertiFiber Max. What the CertiFiber Max does is allow data center technicians to test dramatically more strands of fiber at once faster. We're getting readings faster than once. We launched it really in the back half of Q4 and really started you know rolling it out. The order book is well in excess of what we expected. We're not able to meet demand at this point, and I think it's just a good sign of what's possible because given the Fluke reputation, these technicians already have Fluke devices in their belt. When you launch a product into a market that is growing, that is best in class, the demand's gonna be there, and that's what we're seeing.
That's not a handheld. That's probably something a little bit more of like a, yeah, portable machine that would plug into the rack or like, you know.
Well, yeah. Well, these data center technicians will basically have a tool belt.
Yeah.
On that tool belt, there's basically a console-
Yeah.
that has a bunch of readings, and the CertiFiber Max is a new attachment for this console.
Hmm.
So, uh-
It's a Fluke console?
Yeah.
Hmm.
It's really cool, and it just gives you an example of kind of the breadth of different devices that we can build. It's almost like think about a gaming console, and you can buy, you know, all the different.
Yeah.
steering wheels and guns and all these things. The CertiFiber Max is like that.
That's pretty cool. Every convention we go to, there's no matter what convention it is, there's always a Fluke booth. Just shows you how kind of ubiquitous they are across-
Yeah.
the industrial and commercial landscape.
Yeah.
Anything on a point of sale or inventory basis, you know, quarter to date that you wanna call out on Fluke. I mean, the industrial economy is getting a little bit better, I guess, before all this happened in the Middle East.
I know.
Anything on point of sale or Fluke growth that's of interest?
You know, nothing since our last earnings call. The message there was things are really looking solid across the board. North America, you know, our strongest market continues to grow really well. We did see some pretty significant improvement in Latin America, which was nice. Pockets of Asia, India have been a real bright spot for us. Europe, which had been, you know, challenged for a while, looked like it was starting to moderate and starting to show some signs of acceleration. Feel pretty good about the geo trends we're seeing so far.
Okay. On ASP or AHS, anything on the core business? Just talk about the trends there on, you know, whether it's instrument placements, consumable stream, what's the outlook there?
Well, we feel good about the macro and sort of secular backdrops that face ASP. You know, you did see some impact from healthcare spending, particularly in the U.S. federal pullbacks, which caused people to really delay capital purchases. Again, these are large machines that cost over $100,000 each to go into the sterilization processing departments of large hospital systems and ambulatory surgery centers. In 2025, we saw some of that pause. It's early, but you know, we think some of that is normalized and surgical volumes continue to be pretty healthy. We're optimistic that the base backdrop for ASP is, I think, in a better spot in 2026 than it was in 2025. We gotta execute, and ASP has got the same three levers they're executing against.
Accelerate commercial. They're putting more boots on the ground, you know, in emerging markets, for example, and in other verticals. Continue to increase the pace of new products, innovation and then continue to push recurring revenue, and they're executing on all three.
as far as pricing that business, if software is maybe just above, Fluke is on a price basis in and around that 2%?
Yeah. Oh, yeah.
ASP with the instrument shipments, it's a little bit probably tougher, not negative, but tougher to get price.
Yeah.
the consumables you can get price on.
Yeah.
Is that a good way to think about it?
I think it's a good way to think about it. The, you know, the consumables are often governed on multiyear contracts through GPOs, and so you don't always get the annual price increase as
Right.
as consistently. I think you're thinking about it the right way.
Is there anything technology-wise that's coming into that area of the world that we need to keep an eye on, whether it's different ways to sterilize or regulations or anything like that?
Yeah.
that we should keep an eye on?
I think the biggest move is really to automation. You know, the da Vinci machines, for example, these cannot go into steam sterilizers. It'll wreck them, so they go into the low temperature sterilization machines, which we have, and we're the industry leader on. So I think this trend toward automation plays, you know, into ASP. ASP has been working with a lot of the scope manufacturers who, you know, do endoscopes and other high-end scopes to make sure that they're certified and the coding of those scopes does not get eroded by sterilization and have done a number of partnership deals to, you know, open the way so that you don't wreck your scope.
Yeah.
You know, when you actually sterilize it. Yeah, there's a number of new innovations and trends, and I think, again, they all lend to be more tailwinds than anything.
Okay. That business is all these businesses seem like they're pretty much on track. Is there any part of that portfolio, maybe the ASP? I mean, I know you guys are really focused on buyback right now, but are there any parts of these segments that, you know, you would look to do bolt-ons? You've mentioned software.
Yeah.
Probably a bit of a higher hurdle there. Fluke, there's probably not too many assets you really wanna plug in there.
Yeah.
'Cause it's just got a great brand and it's an organic story. Maybe in ASP, anything you wanna plug into that AHS portfolio?
Yeah. Potentially. I would say two things. I mean, across the board, we do not need to do M&A to create a very exciting equity story here. Fortive accelerated strategy of accelerated organic growth, be disciplined stewards of capital, build and maintain investor trust, I think can deliver great returns over time, but M&A could be an accelerant to it. We have rigorous financial and strategic criteria. You know, as I said, software businesses may have a harder time right now meeting those criteria. I think in ASP as well as in the IOS segments, I think there might be opportunities, but they gotta make sense for us, and price is absolutely part of the strategy, and you gotta beat the buyback. Right now, the buyback you know looks really good.
Yeah. Your buyback trend and activity that kinda goes through the course of this year? When are you guys exhausted on what you've you know currently put out there?
Well, we've got flexibility.
Okay.
Our board is incredibly supportive of our capital allocation strategy, and so when we have an authorization, when we exhaust it's not a big issue to get it replenished. We bought back about 8% of our share capital since the spin-off.
Yeah.
As of the end of last year, you know, under $50 a share, free cash flow yield of, like, 6%.
Right.
We're gonna continue to be opportunistic and allocate capital to best relative returns, and that so far has really been a buyback.
You guys have talked about it yesterday, this NPI funnel being up, you know, 3x. You mentioned some of the Fluke new products. Maybe what certain products have hit out of that funnel and how do you describe the NPI funnel today?
Yeah. I'd say the NPI funnel across the whole portfolio is stronger than it's ever been. You know, we mentioned the Fluke CertiFiber Max. I mean, they've got a long list of product innovations that they're gonna launch this year. You know, I think they'd probably tell you that if they get them all done, it's gonna be a record breaker in terms of new product innovation. CertiFiber Max was one. They launched a ground fault detector is another. They're just gonna continue to roll things out. Industrial Scientific, our gas detection business doing really well. Again, launching 3 or 4 new products here over the course of the next several months. Our software businesses are really leveraging AI, not only in terms of launching new features and functionality, but just increasing the pace of innovation.
Gordian, for example, is in the middle of launching something called Flash. Flash will take tens or hundreds of pages of architectural drawings and actually translate them into, you know, the list of all of the quantities and materials that you need to actually construct the project.
Hmm.
Something that would take people 10, 20 days to do, they're now doing in 15 minutes.
Hmm.
There's just a host of new innovations across the board. ASP is no exception. They're launching new products to help them be, you know, better able to handle the large da Vinci scopes to make them more attractive to ambulatory surgery centers, and we're putting the commercial might behind all of these innovations as well.
How do you look at NPI as maybe a percentage of, you know, revenues or a percentage of growth going forward? I mean, it must be a pretty significant percentage of the growth going forward is from these new products.
We hope so. Again, the framework was 3%-4% core growth over 2026 and 2027. Our ambitions are to do much higher. There were three big levers to organic growth, innovation acceleration, commercial acceleration, and recurring customer value. Based on what we see right now, we think the commercial lever is a pretty quick lever to flip, and we're investing behind that. The innovation acceleration can take a little bit longer, but we've been super pleased with what we've seen from the teams, and we think it can be a meaningful contributor to growth going forward.
Okay. On that, also a bit on that front, you mentioned AI and for one of the businesses. Any other ways AI is making its way into the new products?
Yeah. I mean, it's honestly, it's everywhere. You know, as you know, you know, Fortive has been doing AI for a long time. They set up the Fort.
The Fort
Six or seven years ago, with machine learning and AI folks that were really helping to sort of get things going in terms of having that capability internally. Last year, we digested the Fort into the Fortive Business System, and the operating companies themselves are not only building AI talent within them, particularly the software companies, but are also leveraging the innovation studio that we opened up last year to help accelerate their growth. Anywhere from, you know, our marketing efforts, these are aided by AI. You know, generative AI search engine optimization is sort of key to everyone. Customer service helped by AI. Engineering efficiency helped by AI. Finance, investor relations, all helped by AI. Then the new products, I mentioned a few of them, I mean, those just keep on coming.
In most cases, the customers for our products, if you think about FAL, for example, these are, you know, real estate facilities managers. Their bosses are saying, "What are you doing in AI?
Right.
I hear it's important.
Right.
When we launch new features like, you know, work AI features that actually examine all of your work orders and make sure you're not missing anything or you've got a mistake, you know, the demand is insatiable because people are like, "Wow, this is better, and I can tell my boss I'm leveraging AI.
Right. Right. Internally, are there any use cases you're seeing where the productivity is, you know, notable and where are you when it comes to that journey?
I'll give you an anecdote. The head of product and technology for Accruent, which is one of the FAL businesses, used to be one of the top engineering leaders at Vrbo , which was part of Expedia.
Mm-hmm
When I was there. He said, "Mark, the AI applications we were doing in 2019, you know, we'd run 30 or 40 models in AWS. They cost us a ton of money." He's like, "90% of that now is off the shelf, just comes out of these foundational models. We don't need to do it ourselves." He said, "Whereas before, we may have had a ratio of one engineering manager to 6 or 8 software development engineers." He goes, "We're gonna move to 1 to 2 pretty quickly.
Hmm.
One manager, two software engineers, a bunch of agents to do a lot of the groundwork. He says it's really remarkable. I think, you know, for us, I think you'll just see that show up in the pace of innovation and hopefully having revenue go like this and costs flat to down.
Anywhere where you're able to take cost out in a big way, you know, from a structural cost perspective?
Yeah. Yes, we have. I mean, you know this, but in the back half of 2025, we took a lot of cost out, particularly corporate costs. Our IR team is half the size it was. A lot of the work. Sorry, Christina. A lot of the work that, you know, we're doing right now used to be done by analysts and is now being done by AI. Just summarization of all of the notes, key messages, spreading financials. It's just so much easier. Our M&A team is probably a third the size-
Right.
It's, you know, we see it, you know, across the board, and we've definitely taken out costs, you know, as a result of it.
Any other structural changes or the way you're doing business under Olumide versus under Jim?
I'd say that the top word spoken around Fortive now is growth. I'd say the top words spoken before were probably operating margin expansion. Both of those things are great, and we plan to do both of them. The mindset of the leaders of all of the operating companies and at corporate is it's all about Fortive accelerated. It's all about our three pillar growth strategy. We say it to investors, we say it to the board, we say it to internally, to the teams internally. I think it's just a much, much more growth-oriented, culture and business now. You know, we talk internally that we've actually just breathed growth oxygen into the room, and these operating companies are breathing it in.
Yeah.
They're investing, and we're seeing early signs that it's paying off.
As far as the margin algorithm is concerned, the 50-100 basis points, just remind us of what the building blocks of that are. Is it coming from SG&A leverage, gross margin, price cost, all of the above, mix? What are some of the moving parts there?
I'd say, you know, over a multi-year period.
Yeah.
Probably all of the above.
Okay.
You know, we're really focused though, on using that 50-100 basis points as a framework. You know, it's not something that we have to go get. Operating leverage in these businesses are really good.
Right. Right.
The question.
gross margin.
Yeah. The question is like, how much can you invest to drive growth acceleration that then starts spinning the flywheel?
Right.
You know, again, we're in the early days of it, but we really think we can have our cake and eat it too, particularly doing what we have been doing, which is taking costs out of G&A. You know, the Q4 G&A was down, I think 10%, and reinvesting it in sales and marketing and R&D.
Yeah.
Those are both up.
Yeah.
That formula, we think we can continue to push, maybe not to that degree, but I think just reallocating capital to the things that are gonna drive growth is a great formula. I think it's a repeated formula. I think again, we can deliver accelerated growth and the margin expansion that we've laid out and maybe even a bit more.
What's the right R&D as a percentage of sales for you guys going forward?
You know, I think where it's at right now, which is call it mid-single digits%, I think is probably a decent zone. I mean, some businesses are higher, some are, you know, some are lower.
Software's gonna be a bit higher than the other stuff, the hardware stuff.
Yeah.
Okay. Any questions out there? No? Anything that's not being discussed out there that, you know, you wanted to address or any questions you heard that, you know, people are asking you that you thought were interesting?
Well, I think people are quite rightly asking questions about Fluke.
Mm-hmm.
the tailwinds that business could be seeing. We feel really good about Fluke. I think in prior conferences, there was a lot of talk about software and AI.
Yeah.
I think, you know, I won't reiterate what everyone on CNBC iterates all the time, but you really gotta look at each of these businesses independently and assess them on their merits. I mean, not all manufacturing businesses are made the same, and not all software businesses are made the same. I think the biggest message is that, you know, 7 months ago, 8 months ago now, we spun off Veralto , and we embarked on a new strategy, the Fortive Accelerated Strategy. It's early days, but we're on track, and we feel really good about the prospects going ahead.
We got a question here.
You said you're reallocating some capital into sales and marketing. What specifically are you doing with it and so that you know it's going to have a direct cause and effect relationship with driving growth?
Yeah. It's a great question. I would think about it as two broad categories of investment into sales and marketing. One would just be increasing the number of feet on the ground. Across our healthcare businesses as well as a lot of our hardware businesses, we've really made a push into India and increased our presence there as well as certain places in Latin America. That's just more coverage, essentially. When we do that, we can track what are we paying this new salesperson? How long does it take them to ramp up? Once they're fully productive, what do they produce? What are the returns on that headcount that we hired? The second bucket is sort of more deep technical expertise.
Fluke, for example, has got, you know, a team that is solution selling into the data centers. They go into the data centers, they talk to the hyperscalers, they speak the same language. When they're doing that, they're much more able to think about the existing Fluke portfolio, which has broad applications into the data centers, and also sell some of the new products like CertiFiber Max. Those are the two places, and again, we can track the investment, and we can track the incremental revenue we get from it.
Yeah, go ahead.
Usually your clients, they probably have a product roadmap that for all I know goes out now 1-2 years. Now you're bringing in these tech experts to try to see. Do you have some sort of timeline for when you think you're going to see some benefits from this? Or is it I don't think it's gonna be like a drop, drive-up window where you're gonna, you know, get an order and throw it out the window.
Yeah. Well, I would say the launch of the CertiFiber Max that Fluke just launched, which again is, you know, high bandwidth, many fibers at once, instant testing, that's probably the closest thing to a drive-up that we've seen. The demand was there. The order book is way larger than we thought. We can't keep up with the demand. I think as we have increased the pace of new product innovation, given the strength of the Fluke business, particularly, I think we may be surprised again at just how much demand is there for the taking with just a little bit of turning the dials.
Thank you.
You're welcome.
Thank you very much.
Thank you.
Thanks for coming.
Yeah.
Appreciate it.
Pleasure to be here.