RAL Ralliant Corp - 10-K

ITEM 1A. RISK FACTORS

Carefully consider the risks and uncertainties described below, together with the information included elsewhere in this Annual Report and other documents the Company files with, or furnishes to, the SEC from time to time. The risks and uncertainties described below are those that the Company has identified as material but are not the only risks and uncertainties facing the Company. Ralliant’s business is also subject to general risks and uncertainties that affect many other companies, such as market conditions, economic conditions, geopolitical events, changes in laws, regulations or accounting rules, fluctuations in interest rates, terrorism, wars or conflicts, major health concerns, natural disasters or other disruptions of expected business conditions. Accordingly, the below should not be considered to be a complete statement of all potential risks and uncertainties facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently believe are immaterial also may materially and adversely affect Ralliant’s business, including its results of operations, liquidity, and financial condition.

You should read these risk factors in conjunction with Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the consolidated and combined financial statements and accompanying notes in Part II, Item 8, of this Annual Report.

Risks Related to the Company’s Business Operations

Conditions in the global economy, the markets the Company serves, and the financial markets may adversely affect the Company’s business and financial results.

The Company is impacted by general economic conditions, and adverse economic conditions arising from any slower than anticipated global economic growth, reduced demand or consumer confidence, energy, manufacturing or component supply constraints arising from international conflicts, high inflation rates and the corresponding interest rate policies, volatility in currency and credit markets, actual or anticipated default on sovereign debt, changes in global trade policies (including new or increased tariffs), unemployment and underemployment rates, reduced levels of capital expenditures, changes in government fiscal and monetary policies, political initiatives targeted at reducing government funding, government deficit reduction and budget negotiation dynamics, government shutdowns, sequestration, other austerity measures, political and social instability, other geopolitical conflict, sanctions, natural disasters, public health crises, terrorist attacks, and other challenges affect the Company and its distributors, customers, and suppliers, including having the effect of:

• reducing demand for the Company’s products and services, limiting the financing available to the Company’s customers and suppliers, increasing order cancellations, and resulting in longer sales cycles and slower adoption of new technologies;

• increasing the difficulty in collecting accounts receivable and the risk of excess and obsolete inventories;

• increasing price competition in the markets the Company serves;

• creating or exacerbating supply interruptions, which disrupt the Company’s ability to produce the Company’s products;

• increasing the risk of impairment of goodwill and other long-lived assets (such as the current period non-cash goodwill impairment charge of $1.44 billion recorded in the Test & Measurement segment, primarily driven by revised expectations for the EA Elektro-Automatik (“EA”) business, as discussed in Note 5 to the consolidated and combined financial statements included in this Annual Report), and the risk that the Company may not be able to fully recover the value of other assets such as real estate and tax assets;

• increasing the impact of currency translation; and

• increasing the risk that counterparties to the Company’s contractual arrangements will become insolvent or otherwise unable to fulfill their contractual obligations which, in addition to increasing the risks identified above, could result in preference actions against the Company.

In addition, adverse general economic conditions may lead to instability in U.S. and global capital and credit markets, including market disruptions, limited liquidity, and interest rate volatility. If the Company is unable to access capital and credit markets on terms that are acceptable to the Company or the Company’s lenders are unable to provide financing in accordance with their contractual obligations, the Company may not be able to make certain investments or acquisitions or fully execute its business plans and strategies. Furthermore, the Company’s suppliers and customers are also dependent upon the capital and credit markets. Limitations on the ability of customers, suppliers, or financial counterparties to access credit at interest rates and on terms that are acceptable to them could lead to insolvencies of key suppliers and customers, limit or prevent customers from obtaining credit to finance purchases of the Company’s products and services, and cause delays in the delivery of key products from suppliers.

If growth in the global economy or in any of the markets the Company serves slows for a significant period, if there is significant deterioration in the global economy or such markets, if there is instability in global capital and credit markets, or if improvements in the global economy do not benefit the markets the Company serves, the Company’s business and financial results will be adversely affected.

Trade relations between the United States and other countries, including the imposition of new or increased tariffs, have had, and are expected to continue to have, an adverse effect on the Company’s business and financial results.

The Company participates in various end markets outside the United States. During the fiscal year ended December 31, 2025, sales outside the United States accounted for 48.7% of the Company’s total sales. In addition, the Company has several facilities outside the United States, many of which serve multiple Ralliant operating companies in manufacturing, distribution, product design, and selling, general and administrative functions.

There continues to be significant uncertainty about the future relationship between the United States and other countries, including with respect to trade policies, treaties, government regulations, sanctions, tariffs, and application thereof. Recent and ongoing changes to U.S. tariff policy have resulted in broad-based increases in tariff rates, and several countries, including China, have imposed or threatened to impose retaliatory measures on imports from the U.S. The U.S. government has announced various modifications to its tariff policy, and further changes may be made in the future. Although the Company is continuing to evaluate the impact of these evolving developments, it cannot predict the ultimate scope, duration, or effect, including the imposition or application of new or increased tariffs between the United States and other countries. Changes to trade policies, retaliatory measures, and sustained uncertainty in global trade relationships have negatively impacted, and are expected to continue to negatively impact, the Company’s operations and financial results through supply chain disruptions, increased input costs, delayed shipments, and increased operational complexity and costs. Additionally, these developments have contributed in the past and may in the future contribute to adverse macroeconomic conditions and increased economic nationalism, which could further reduce demand for the Company’s products and negatively impact its business.

The Company’s growth could suffer if the markets into which the Company sells its products and services decline, do not grow as anticipated, or experience cyclicality.

The Company’s growth depends in part on the growth of the markets which it serves, and visibility into its markets is limited (particularly for markets into which the Company sells through distribution). The Company’s quarterly sales and profits depend substantially on the volume and timing of orders received during the fiscal quarter, which are

difficult to forecast. Any decline or lower than expected growth in the Company’s served markets could diminish demand for the Company’s products and services, which could adversely affect the Company’s financial results. Certain of the Company’s businesses operate in industries that may experience periodic, cyclical downturns. For example, the Company’s Test and Measurement segment serves the semiconductor end market, which is affected by cyclical trends in downstream markets, including cyclicality in automotive and consumer electronics due to consumer spending trends. The Test and Measurement segment also serves the communications end market, which experiences cyclicality driven by significant one-time investments to support transitions to new communication standards and technologies, and the EV industry, which is currently experiencing a slowdown due to slower-than-anticipated progress of EV adoption. The Company’s Sensors and Safety Systems segment serves the industrial manufacturing end market, which experiences expansions and contractions driven by the macroeconomic environment and overall economic growth trends, and the utilities end market, which is influenced by secular trends such as grid modernization. The Company also serves the defense and space end market, which is heavily influenced by the spending and policy actions of the U.S. federal government and allied governments that rely on U.S. suppliers to provide products and services important to their national defense. Changes in U.S. or other government defense spending, including as a result of changes in policy, budgetary positions or priorities in connection with elections or otherwise, can negatively impact the results and growth prospects of this end market. U.S. defense spending levels are difficult to predict and may be impacted by numerous factors such as the evolving nature of the national security threat environment, U.S. national security strategy, U.S. foreign policy, the domestic political environment, macroeconomic conditions, and the ability of the U.S. government to enact relevant legislation such as authorization and appropriations bills.

In addition, in certain of the Company’s businesses, demand depends on customers’ capital spending budgets, and product and economic cycles can affect the spending decisions of these entities. Demand for the Company’s products and services is also sensitive to changes in customer order patterns (including the timing of large projects), which may be affected by announced price changes, changes in the Company’s competitors’ pricing discounts and other incentive programs, new product introductions, customer inventory levels, and customer needs. These factors have adversely affected, and in the future could adversely affect, the Company’s growth and results of operations.

The Company’s financial performance varies quarterly due to seasonal purchasing patterns, which can significantly impact quarterly results.

Certain of the Company’s businesses experience seasonal variations, with certain quarters typically generating higher sales due to customer purchasing patterns, which can significantly impact quarterly results. The sale of the Company’s products and services is dependent on customers whose industries are subject to seasonal trends in the demand for their products. The Company’s sales have typically been lowest in the first quarter and highest in the fourth quarter. Failing to meet quarterly sales and earnings expectations due to these seasonal trends could negatively impact investor confidence, resulting in stock price volatility and potential reputational damage.

The Company faces intense competition, and if it is unable to compete effectively, the Company may experience decreased demand and decreased market share. Even if the Company competes effectively, the Company may be required to reduce prices for the Company’s products and services.

Many of the Company’s businesses operate in industries that are intensely competitive and have been subject to consolidation. Because of the range of the products and services the Company sells and the variety of markets it serves, the Company encounters a wide variety of competitors, and it could encounter additional competition in the future, including from Former Parent. See “Business — Competition.” In order to compete effectively, the Company must maintain longstanding relationships with major customers and continue to grow the Company’s business by establishing relationships with new customers, continually developing new or enhanced products and services to maintain and expand the Company’s brand recognition and leadership position in various product and service categories, and penetrating new markets, including high-growth markets. The Company’s failure to compete effectively or pricing pressures resulting from competition may adversely impact the Company’s financial results, and the Company’s expansion into new markets may result in greater-than-expected risks, liabilities, and expenses.

The Company’s growth depends in part on the timely development and commercialization, and customer acceptance, of new and enhanced products and services based on technological innovation.

The Company generally sells its products and services in industries that are characterized by rapid technological changes, frequent new product introductions, and changing industry standards. If the Company does not develop innovative new and enhanced products and services on a timely basis, the Company’s offerings will become obsolete over time and the Company’s competitive position and financial results will suffer. The Company’s success will depend on several factors, including the Company’s ability to:

• accurately identify customer needs and preferences and predict future needs and preferences;

• allocate the Company’s research and development funding to products and services with higher growth prospects;

• anticipate and respond to the Company’s competitors’ development of new products and services and technological innovations;

• differentiate the Company’s offerings from competitors’ offerings and avoid commoditization;

• innovate and develop new technologies and applications, and acquire or obtain rights to third-party technologies that may have valuable applications in the Company’s served markets;

• obtain adequate intellectual property rights with respect to key technologies before the Company’s competitors do;

• successfully commercialize new technologies in a timely manner, price them competitively, and cost-effectively manufacture and deliver sufficient volumes of new products of appropriate quality on time; and

• stimulate customer demand for and convince customers to adopt new technologies.

In addition, if the Company fails to accurately predict future customer needs and preferences or fails to produce viable technologies, the Company may invest heavily in research and development of products and services that do not lead to significant sales, which would adversely affect the Company’s profitability. Even if the Company successfully innovates and develops new and enhanced products and services, the Company may incur substantial costs in doing so, and the Company’s profitability may suffer.

Changes in industry standards and governmental regulations may reduce demand for the Company’s products or services or increase the Company’s expenses.

The Company competes in markets in which the Company and the Company’s customers must comply with supranational, federal, state, local, and other jurisdictional regulations, such as regulations governing health and safety, the environment, electronic communications, and market standardizations. The Company develops, configures, and markets the Company’s products and services to meet customer needs that are impacted by these regulations and standards. These regulations and standards are complex, change frequently, have tended to become more stringent over time, and may be inconsistent across jurisdictions. Any significant change or delay in implementation in any of these regulations or standards (or in the interpretation, application, or enforcement thereof) could reduce or delay demand for the Company’s products and services, increase the Company’s costs of producing or delay the introduction of new or modified products and services, or restrict the Company’s existing activities, products, and services. In addition, in certain of the Company’s markets, growth depends in part upon the introduction of new regulations or implementation of industry standards on the timeline the Company expects. In these markets, the delay or failure of governmental and other entities to adopt or enforce new regulations or industry standards, or the adoption of new regulations or industry standards that differ from the Company’s expectations or which the Company’s products and services are not positioned to address, could adversely affect demand. In addition, regulatory deadlines or industry standard implementation timelines may result in substantially different levels of demand for the Company’s products and services from period to period.

The Company’s reputation, ability to do business, and financial results may be impaired by improper conduct by any of the Company’s employees, agents, or business partners.

The Company cannot provide assurance that its internal controls and compliance systems will always protect the Company from acts committed by employees, agents, or business partners of the Company (or of businesses the Company acquires or partners with) that violate U.S. or non-U.S. laws, including the laws governing payments to government officials, bribery, fraud, kickbacks, and false claims, sales and marketing practices, conflicts of interest, competition, export and import compliance, money laundering, and data privacy. In particular, the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business, and the Company operates in many parts of the world that have experienced governmental corruption to some degree. Any such improper actions or allegations of such acts could damage the Company’s reputation and subject the Company to civil or criminal investigations in the United States and in other jurisdictions and related stockholder lawsuits, could lead to substantial civil and criminal, monetary and non-monetary penalties and could cause the Company to incur significant legal and investigatory fees. In addition, the Company relies on the third parties with whom the Company does business to adhere to the law and to the Company’s standards of conduct. Violations of law or the Company’s standards of conduct by such third parties could have a material effect on the Company’s financial results.

Any inability to consummate acquisitions at appropriate prices, and to make appropriate investments that support the Company’s long-term strategy, could negatively impact the Company’s growth rate and stock price.

The Company’s ability to grow sales, earnings, and cash flow depends in part upon the Company’s ability to identify and successfully acquire and integrate businesses at appropriate prices and realize anticipated synergies, and to make appropriate investments that support the Company’s long-term strategy. Any inability to do so could adversely impact the Company’s growth rate and the Company’s stock price. Acquisitions and investments that align with the Company’s portfolio strategy may be difficult to identify and execute for a number of reasons, including high valuations, competition among prospective buyers, the availability of affordable funding in the capital markets, general market conditions, and the need to satisfy applicable closing conditions and obtain antitrust and other regulatory approvals on acceptable terms. In addition, competition for acquisitions and investments may result in higher purchase prices. Changes in accounting or regulatory requirements or instability in the credit markets could also adversely impact the Company’s ability to consummate acquisitions and investments.

The Company’s acquisition of businesses, investments, joint ventures, and other strategic relationships could negatively impact the Company’s financial results.

As part of the Company’s business strategy, the Company acquires businesses, makes investments, and enters into joint ventures and other strategic relationships in the ordinary course, some of which may be material; please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional details. These acquisitions, investments, joint ventures, and strategic relationships involve a number of financial, accounting, managerial, operational, legal, compliance, and other risks and challenges, including the following, any of which could adversely affect the Company’s financial results:

• any business, technology, service, or product that the Company acquires or invests in could under-perform relative to the Company’s expectations and the price that the Company paid for it, or not perform in accordance with the anticipated timetable, or the Company could fail to operate any such business profitably;

• the Company may incur or assume significant debt in connection with its acquisitions, investments, joint ventures, or strategic relationships, which could also cause a deterioration of the Company’s credit ratings, result in increased borrowing costs and interest expense, and diminish the Company’s future access to the capital markets;

• acquisitions, investments, joint ventures, or strategic relationships could cause the Company’s financial results to differ from its own or the investment community’s expectations in any given period, or over the long term;

• pre-closing and post-closing earnings charges could adversely impact operating results in any given period, and the impact may be substantially different from period to period;

• acquisitions, investments, joint ventures, or strategic relationships could create demands on the Company’s management, operational resources, and financial and internal control systems that the Company is unable to effectively address;

• the Company could experience difficulty in integrating personnel, operations, and financial and other controls and systems and retaining key employees and customers;

• the Company may be unable to achieve cost savings or other synergies anticipated in connection with an acquisition, investment, joint venture, or strategic relationship;

• the Company may face regulatory scrutiny as a result of perceived concentration in certain markets, which could cause additional delay or prevent the Company from completing certain acquisitions that would be beneficial to its business;

• the Company may assume by acquisition or strategic relationship unknown liabilities, known contingent liabilities that become realized, known liabilities that prove greater than anticipated, internal control deficiencies, or exposure to regulatory sanctions resulting from the acquired company’s or investee’s activities and the realization of any of these liabilities or deficiencies may increase the Company’s expenses, adversely affect its financial position, or cause the Company to fail to meet its financial reporting obligations;

• in connection with acquisitions and joint ventures, the Company may enter into post-closing financial arrangements such as purchase price adjustments, earn-out obligations, and indemnification obligations, which may have negative or unpredictable financial results;

• in connection with acquisitions and investments (such as the EA acquisition in the first quarter of 2024), the Company has recorded significant goodwill and other intangible assets on the Company’s balance sheet and if the Company is not able to realize the value of these assets, the Company has been, and may in the future be, required to incur charges relating to the impairment of these assets (such as the current period $1.44 billion non-cash goodwill impairment charge recorded in the Test & Measurement segment and primarily driven by revised expectations for the EA business); and

• the Company may have interests that diverge from those of its joint venture partners or other strategic partners and the Company may not be able to direct the management and operations of the joint venture or other strategic relationship in the manner it believes is most appropriate, exposing it to additional risk.

The indemnification provisions of acquisition agreements by which the Company has acquired companies may not fully protect it, and as a result, the Company may face unexpected liabilities.

Certain of the acquisition agreements by which the Company has acquired companies require the former owners to indemnify the Company against certain liabilities related to the operation of the acquired company before the Company acquired it. In most of these agreements, however, the liability of the former owners is limited, and certain former owners may be unable to meet their indemnification responsibilities. The Company cannot assure you that these indemnification provisions will protect it fully or at all, and as a result the Company may face unexpected liabilities that adversely affect the Company’s financial results.

Divestitures or other dispositions could negatively impact the Company’s business, and contingent liabilities from businesses that the Company has sold could adversely affect the Company’s financial results.

The Company assesses the strategic fit of the Company’s existing businesses and may divest or otherwise dispose of businesses that are deemed not to fit with the Company’s strategic plan or are not achieving the desired return on investment. These transactions pose risks and challenges that could negatively impact the Company’s business. For example, when the Company decides to sell or otherwise dispose of a business or assets, the Company may be unable to do so on satisfactory terms within the Company’s anticipated timeframe or at all, and even after reaching a definitive agreement to sell or dispose of a business the sale is typically subject to satisfaction of pre-closing conditions which may not be satisfied. In addition, divestitures or other dispositions may dilute the Company’s earnings per share, have other adverse financial and accounting impacts, and distract management, and disputes may arise with buyers in connection with the sale or after. In addition, the Company has retained responsibility for or has agreed to indemnify buyers against some known and unknown contingent liabilities related to a number of businesses the Company has sold or disposed of. Although the resolution of these contingencies has not had a material effect on the Company’s financial results so far, the Company cannot be certain that the resolution of such contingencies in the future will not have a material effect on its financial results.

The Company’s operations, products, and services expose it to the risk of environmental, health, and safety liabilities, costs, and violations that could adversely affect the Company’s reputation and financial results.

The Company’s operations, products, and services are subject to environmental laws and regulations, which impose limitations on the discharge of pollutants into the environment and establish standards for the use, generation, treatment, storage, and disposal of hazardous and non-hazardous wastes. The Company must also comply with various health and safety regulations in the United States and abroad in connection with the Company’s operations. In addition, some of the Company’s operations require the controlled use of hazardous or energetic materials in the development, manufacturing, or servicing of the Company’s products. The Company has received notification from the United States Environmental Protection Agency, and from state and non-U.S. environmental agencies, that conditions at certain sites where the Company and others previously disposed of hazardous wastes or are or were property owners require clean-up and other possible remedial action, including sites where the Company has been identified as a potentially responsible party under United States federal and state environmental laws.

The Company cannot assure you that its environmental, health, and safety compliance program has been or will at all times be effective. Failure to comply with any of these laws could result in civil and criminal, monetary and non-monetary penalties, and damage to the Company’s reputation. In addition, the Company cannot provide assurance that the Company’s costs of complying with current or future environmental protection and health and safety laws will not exceed the Company’s estimates or adversely affect the Company’s financial results. Moreover, any accident that results in significant personal injury or property damage, whether occurring during development, manufacturing, servicing, use, or storage of the Company’s products, may result in significant production interruption, delays, or claims for substantial damages caused by personal injuries or property damage, harm to the Company’s reputation, and reduction in morale among the Company’s employees, any of which may adversely and materially affect the Company’s results of operations.

In addition, the Company may incur costs related to remedial efforts or alleged environmental damage associated with past or current waste disposal practices or other hazardous materials handling practices. The Company is also, from time to time, party to personal injury or other claims brought by private parties alleging injury due to the presence of or exposure to hazardous substances. The Company may also become subject to additional remedial, compliance, or personal injury costs due to future events such as changes in existing laws or regulations, changes in agency direction or enforcement policies, developments in remediation technologies, changes in the conduct of the Company’s operations, and changes in accounting rules. For additional information regarding these risks, please refer to Note 14 to the consolidated and combined financial statements included in this Annual Report. The Company cannot assure you that the Company’s liabilities arising from past or future releases of, or exposures to, hazardous substances will not exceed the Company’s estimates or adversely affect the Company’s reputation and financial results or that the Company will not be subject to additional claims for personal injury or remediation in the future based on the Company’s past, present, or future business activities.

The Company’s businesses are subject to extensive regulation; failure to comply with those regulations could adversely affect the Company’s financial results and business, including its reputation.

In addition to the environmental, health, safety, anticorruption, data privacy, and other regulations noted elsewhere in this Annual Report, the Company’s businesses are subject to extensive regulation by U.S. and non-U.S. governmental and self-regulatory entities at the supranational, federal, state, local, and other jurisdictional levels, including the following:

• the Company is required to comply with global import laws and export control and economic sanctions laws, which may affect the Company’s transactions with certain customers, business partners, and other persons and dealings between the Company’s employees and between the Company’s subsidiaries. In certain circumstances, export control and economic sanctions regulations may prohibit the export of certain products, services, and technologies. In other circumstances, the Company may be required to obtain an export license before exporting the controlled item. Compliance with the various import laws that apply to the Company’s businesses can restrict its access to, and increase the cost of obtaining, certain products and at times can interrupt the Company’s supply of imported inventory. The Company is also subject to audits or investigations by one or more domestic or foreign government agencies relating to its compliance with these regulations. An adverse outcome in any such audit or investigation could subject the Company to fines or other penalties;

• the Company also has agreements to sell products and services to government entities, and is subject to various statutes, regulations, and other requirements that apply to companies doing business with government entities, including, but not limited to, the Federal Acquisition Regulation (“FAR”) and federal agency-specific FAR supplements, such as the U.S. Department of War's Defense Federal Acquisition Regulation Supplement. The laws governing U.S. government contracts differ from the laws governing private contracts. For example, these laws impose a broad range of requirements, including various procurement, import and export, security, contract pricing and cost, contract termination and adjustment, audit, product integrity, and government accounting requirements. New regulations or changes to existing requirements could increase the Company’s compliance costs. Further, the Department of War and other U.S. federal government agencies have adopted rules and regulations requiring contractors and subcontractors to implement a set of cybersecurity measures to attain the safeguarding of contractor systems that process, store, or transmit certain information. Implementation and compliance with these cybersecurity requirements is complex and costly, and could result in unforeseen expenses, lower profitability, and, in the case of non-compliance, penalties, and damages, all of which could have an adverse effect on the Company’s business. These cybersecurity requirements also impact the Company’s supply base, which could impact cost, schedule, and performance on programs if suppliers do not meet the requirements and therefore, do not qualify to support the programs. The Company’s contracts and subcontracts with government end customers are often subject to termination, reduction, or modification for convenience of the government, or subject to default based on performance. Additionally, the Company may underestimate the costs of performing under the contract. In certain cases, a governmental entity may require the Company to pay back amounts such government entity has paid to the Company. Government contracts that have been awarded to the Company following a bid process could become the subject of a bid protest by a losing bidder, which could result in loss of the contract. The Company is also subject to U.S. and other government inquiries and investigations that can arise from internal or external audits regarding the Company’s compliance with the requirements governing U.S. government contracts. Any failure to comply with provisions of the Company’s government contracts or other applicable laws and regulations can lead to fines or other penalties, including civil or criminal enforcement under the U.S. False Claims Act or similar enforcement legislation, suspension, or debarment against new government business, and reputational harm;

• the Company is also required to comply with increasingly complex and changing data privacy and protection regulations in multiple jurisdictions that regulate the collection, use, protection, and transfer of personal data, including the transfer of personal data between or among countries. In particular, data privacy and data protection laws have been passed in the European Economic Area, the United Kingdom, Switzerland, California, China, Brazil, and India. The Company may also face audits or investigations by one or more domestic or foreign government agencies relating to the Company’s compliance with these regulations. An adverse outcome in any such audit or investigation could subject the Company to fines or other penalties. That or other circumstances related to the Company’s collection, use, and transfer of personal data could harm its reputation or adversely affect its business and financial position;

• the Company is also required to comply with complex and evolving U.S., state, and foreign laws regarding the distribution of the Company’s products and services. These rules are subject to change due to new or amended legislation or regulations, administrative or judicial interpretation, or government enforcement policies. Any such change could adversely impact the Company’s current distribution business models and result in a decrease in sales or expose the Company to other significant costs affecting its business and financial position;

• the Company is also subject to the federal False Claims Act (the “FCA”), which imposes civil and criminal liability on individuals or entities that knowingly submit false or fraudulent claims for payment to the government or knowingly make, or cause to be made, a false statement in order to have a false claim paid, including qui tam or whistleblower suits. There are many potential bases for liability under the FCA. In addition, the Company could be held liable under the FCA if it is deemed to “cause” the submission of false or fraudulent claims; and

• the Company is also required to comply with ever changing labor and employment laws and regulations in multiple jurisdictions, which could negatively impact the Company’s business or financial position.

These are not the only regulations that the Company’s businesses must comply with. Generally, regulations the Company is subject to have tended to become more stringent over time and may be inconsistent across jurisdictions. The Company and the industries in which the Company operates have at times been, and may in the future be, under review or investigation by regulatory authorities. Failure to comply (or any alleged or perceived failure to comply) with the regulations referenced above or any other regulations could result in civil and criminal, monetary and non-monetary penalties, and any such failure or alleged failure (or becoming subject to a regulatory enforcement investigation) could also damage the Company’s reputation, disrupt the Company’s business, limit its ability to manufacture, import, export, and sell products and services, result in loss of customers and disbarment from selling to certain federal agencies, and cause the Company to incur significant legal and investigatory fees. Compliance with these and other regulations may also affect the Company’s returns on investment, require it to incur significant expenses or modify the Company’s business model, or impair the Company’s flexibility in modifying product, marketing, pricing, or other strategies for growing the Company’s business. The Company voluntarily complies with the standards of certain industrial standards bodies such as the International Standards Organization (ISO) and SEMI Standards, and, in certain cases, follow third-party certification guidelines, including for UL, CSA, ATEX, CE, and FM approvals. This voluntary compliance enables the Company to sell its products into certain applications and in certain geographies and to satisfy certain customer requirements and expectations. Failure to comply with these rules could result in withdrawal of certifications the Company relies on to sell the Company’s products and services and otherwise adversely impact the Company’s business and financial results. For additional information regarding these risks, please refer to the section entitled “Business — Regulatory Matters.”

Climate change, or legal or regulatory measures to address climate change, may negatively affect the Company.

Climate change resulting from increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere could present risks to the Company’s operations. Physical risk resulting from acute changes (such as hurricane, tornado, wildfire, or flooding) or chronic changes (such as droughts, heat waves, or sea level changes) in climate patterns can adversely impact the Company’s facilities and operations and disrupt the Company’s supply chains and distribution systems. Concern over climate change has resulted, and may in the future result, in new or additional legal or regulatory requirements designed to reduce greenhouse gas emissions, increase climate-related disclosure, or mitigate the effects of climate change on the environment (such as taxation of, or caps or prohibitions on the use of, carbon-based energy). Any such new or additional legal or regulatory requirements, including extensive disclosure requirements being implemented in various jurisdictions, including in the European Union and domestically, may increase the costs associated with, or disrupt, sourcing, manufacturing, and distribution of the Company’s products, which may adversely affect the Company’s business and financial results. In addition, any actual or perceived failure to adequately address stakeholder expectations with respect to environmental or related matters, including inability to comply with conflicting expectations, may result in the loss of business, adverse reputational impacts, and challenges in attracting and retaining customers.

International economic, political, legal, compliance, and business factors could negatively affect the Company’s financial results.

In 2025, 48.7% of the Company’s sales were derived from customers outside the United States. In addition, many of the Company’s manufacturing operations, suppliers, and employees are located outside the United States. The Company’s principal markets outside the United States are in Europe and Asia. Since the Company’s growth strategy depends in part on the Company’s ability to further penetrate markets outside the United States and increase the localization of the Company’s products and services, the Company expects to continue to increase the Company’s sales and presence outside the United States, particularly in high-growth markets, such as Eastern Europe, the Middle East, Africa, Latin America, and Asia. The Company’s international business, including the Company’s business in high-growth markets outside the United States, is subject to risks that are customarily encountered in non-U.S. operations, as well as increased risks due to significant uncertainties related to political and economic changes, including:

• impact of geopolitical conflict;

• interruption in the transportation of materials to the Company and finished goods to its customers;

• differences in terms of sale, including payment terms;

• local product preferences and product requirements;

• changes in a country’s or region’s political or economic conditions, including changes in its relationship with the United States, particularly with respect to China;

• trade protection measures, sanctions, increased trade barriers, imposition of new or additional tariffs on imports or exports, embargoes, and import or export restrictions and requirements;

• new conditions to, and possible restrictions of, existing free trade agreements;

• epidemics, such as the coronavirus outbreak, that adversely impact travel, production, or demand;

• unexpected changes in laws or regulatory requirements, including negative changes in tax laws in the United States and in countries in which the Company manufactures or sells its products;

• limitations on ownership and on repatriation of earnings and cash;

• the potential for nationalization of enterprises;

• limitations on legal rights and the Company’s ability to enforce such rights;

• difficulty in staffing and managing widespread operations;

• differing labor regulations, including collective labor arrangements;

• difficulties in implementing restructuring actions on a timely or comprehensive basis; and

• differing protection of intellectual property.

Any of these risks could negatively affect the Company’s financial results and growth rate.

Changes in U.S. GAAP could adversely affect the Company’s reported financial results and may require significant changes to the Company’s internal accounting systems and processes.

The Company prepares its consolidated and combined financial results in conformity with generally accepted accounting principles in the United States of America (“GAAP”). These principles are subject to interpretation by the Financial Accounting Standards Board, the SEC, and various bodies formed to interpret and create appropriate accounting principles and guidance. Any new or amended standards may result in different accounting principles, which may significantly impact the Company’s reported results, result in volatility of the Company’s financial results, require the Company to apply new or amended standards retroactively, and require significant changes to the Company’s internal accounting systems and processes, which may impose significant costs and divert management attention and resources.

The Company has been, and may in the future be, required to recognize impairment charges for the Company’s goodwill and other intangible assets.

As of December 31, 2025, the net carrying value of the Company’s goodwill and other intangible assets totaled approximately $2.47 billion. In accordance with GAAP, the Company periodically, and at least annually, assesses these assets to determine if they are impaired. Significant negative industry or economic trends (including adverse changes in customer preferences and adoption of new technology), disruptions to the Company’s business, changes in government fiscal and monetary policies, political initiatives targeted at reducing government funding, government deficit reduction and budget negotiation dynamics, inability to effectively integrate acquired businesses, unexpected significant changes or planned changes in the use of the Company’s assets, changes in the structure of the Company’s business, divestitures, market capitalization declines, or increases in associated discount rates may impair the Company’s goodwill and other intangible assets. Any charges relating to such impairments adversely affect the Company’s results of operations in the periods recognized.

In the fourth quarter of 2025, in connection with its annual impairment testing, the Company recorded a $1.44 billion non-cash goodwill impairment charge in the Test & Measurement segment, primarily driven by revised expectations for the EA business due to the slower‑than‑anticipated progression and recent reduction in industry forecasts of future EV adoption. Any additional future determination of impairment of goodwill or other intangible assets could have a material adverse effect on the Company’s financial condition and results of operations. See “Critical Accounting Estimates” and Note 5 to the consolidated and combined financial statements included in this Annual Report for additional information.

Foreign currency exchange rates, including the volatility thereof, may adversely affect the Company’s financial results.

In 2025, sales outside the United States accounted for 48.7% of the Company’s total sales. These transactions expose the Company to foreign currency fluctuations, which have in the past, and may in the future, adversely affect the Company’s financial results. Strengthening of the U.S. dollar would increase the effective price of the Company’s products sold in U.S. dollars into other countries, which could require the Company to lower its prices or lead to reduced demand for its products. The Company’s non-U.S. dollar sales and expenses are translated into U.S. dollars for reporting purposes, and the strengthening or weakening of the U.S. dollar could result in less favorable financial results. The Company also faces exchange rate risk from its subsidiaries owned and operated in foreign countries and its investments in non-U.S. dollar currencies and non-U.S. dollar denominated borrowing.

Changes in the Company’s tax rate or exposure to additional tax liabilities or assessments could affect the Company’s profitability. In addition, audits by tax authorities could result in additional tax payments for prior periods.

The Company is subject to income, transaction, and other taxes in the United States and in multiple foreign jurisdictions. The Company’s future income tax provision, cash taxes paid, and effective tax rate could be volatile and difficult to predict due to changes in business profit by jurisdiction, changes in the legal entity structures, intercompany arrangements, or foreign currency exchange rates, or changes in tax laws, policies, regulations, or accounting principles, including interpretations or retroactive applications thereof. As a result of changes to tax laws, regulations, accounting principles, or global tax standards, the Company may record tax expense or benefit that is material to the quarter and year of change. Furthermore, certain tax laws are inherently ambiguous, requiring subjective interpretation on the application thereof. The Company’s interpretation and the corresponding amount of taxes the Company pays is, and may in the future continue to be, subject to audits by U.S. federal, state, and local tax authorities and by non-U.S. tax authorities. If these audits result in payments or assessments different from the Company’s reserves, the Company’s future results may include unfavorable adjustments to the Company’s tax liabilities and financial results could be adversely affected.

The Company has not made any provision for foreign remittance taxes on undistributed earnings of certain non-U.S. subsidiaries to the extent such earnings are considered to be indefinitely reinvested in the operations of those subsidiaries. If the Company’s intentions with respect to the reinvestment of these earnings change, or if the Company determines to repatriate such earnings from foreign jurisdictions, the Company’s income tax provision, cash taxes paid, and effective tax rate could increase. In addition, changes in U.S. international tax laws and related reforms may increase uncertainty and could adversely affect the Company’s income tax provision, cash taxes paid, and effective tax rate. Furthermore, many jurisdictions in which the Company operates have implemented, or are in the process of implementing, tax law and administrative changes to align with the base erosion and profit shifting initiatives led by the Organisation for Economic Co-operation and Development, which could significantly increase the Company’s income tax provision, cash taxes paid, and effective tax rate.

The Company is subject to a variety of litigation and other legal and regulatory proceedings in the course of the Company’s business that could adversely affect the Company’s financial results.

The Company is subject to a variety of litigation and other legal and regulatory proceedings incidental to the Company’s business (or the business operations of previously owned entities), including claims for damages arising out of the use of products or services and claims relating to intellectual property matters, employment matters, tax matters, commercial disputes, disputes with the Company’s suppliers or vendors, competition and sales and trading practices, environmental matters, personal injury, insurance coverage, and acquisition- or divestiture-related matters, as well as regulatory investigations or enforcement. The Company may also become subject to lawsuits as a result of past or future acquisitions or as a result of liabilities retained from, or representations, warranties, or indemnities provided in connection with, divested businesses. These lawsuits may include claims for compensatory damages, punitive and consequential damages, or injunctive relief. The defense of these lawsuits may divert the attention of the Company’s management; the Company may incur significant expenses in defending these lawsuits; the Company may experience disruption in supply or sales; and the Company may be required to pay damage awards or settlements or become subject to equitable remedies that could adversely affect the Company’s operations and financial results. Moreover, any insurance or indemnification rights that the Company may have may be insufficient or unavailable to protect it against such losses. In addition, developments in proceedings in any given period may require the Company to adjust the loss contingency estimates that it has recorded in the Company’s financial statements, record estimates for liabilities or assets that the Company was previously unable to estimate, or pay cash settlements or judgments. Any of these developments could adversely affect the Company’s financial results and reputation, and the Company cannot assure you that the Company’s liabilities in connection with litigation and other legal and regulatory proceedings will not exceed the Company’s estimates.

If the Company does not or cannot adequately protect its intellectual property, or if third parties infringe its intellectual property rights, the Company may suffer competitive injury or expend significant resources enforcing its rights.

The Company owns numerous patents, trademarks, copyrights, trade secrets, and other intellectual property and has licenses to intellectual property owned by others, which in aggregate are important to the Company’s business. The intellectual property rights that the Company obtains, however, may not be sufficiently broad or otherwise may not provide the Company a significant competitive advantage, and patents may not be issued for pending or future patent applications owned by or licensed to the Company. In addition, the steps that the Company and the Company’s licensors have taken to maintain and protect the Company’s intellectual property may not prevent it from being challenged, invalidated, circumvented, designed-around, or becoming subject to compulsory licensing, particularly in countries where intellectual property rights are not highly developed or protected. In some circumstances, enforcement may not be available to, or economically viable for, the Company because an infringer has a dominant intellectual property position or for other business reasons, or countries may require compulsory licensing of the Company’s intellectual property. The Company also relies on nondisclosure and noncompetition agreements with employees, consultants, and other parties to protect, in part, trade secrets and other proprietary rights. There can be no assurance that these agreements will adequately protect the Company’s trade secrets and other proprietary rights and will not be breached, that the Company will have adequate remedies for any breach, that others will not independently develop substantially equivalent proprietary information, or that third parties will not otherwise gain access to the Company’s trade secrets or other proprietary rights. The Company’s failure to obtain or maintain intellectual property rights that convey competitive advantage, adequately protect the Company’s intellectual property, detect or prevent circumvention or unauthorized use of such property, and the cost of enforcing the Company’s intellectual property rights could adversely impact the Company’s business, including its competitive position and financial results.

Third parties may claim that the Company is infringing or misappropriating their intellectual property rights and the Company could suffer significant litigation expenses, losses, or licensing expenses or be prevented from selling products or services.

From time to time, the Company receives notices from third parties alleging intellectual property infringement or misappropriation. Any dispute or litigation regarding intellectual property could be costly and time-consuming due to the complexity of many of the Company’s technologies and the uncertainty of intellectual property litigation. The Company’s intellectual property portfolio may not be useful in asserting a counterclaim, or negotiating a license, in response to a claim of infringement or misappropriation. In addition, as a result of such claims of infringement or misappropriation, the Company could lose its rights to critical technology, be unable to license critical technology or sell critical products and services, be required to pay substantial damages or license fees with respect to the infringed rights, be required to license technology or other intellectual property rights from others, be required to cease marketing, manufacturing, or using certain products, or be required to redesign, re-engineer, or re-brand the Company’s products at substantial cost, any of which could adversely impact the Company’s competitive position and financial results. Third-party intellectual property rights may also make it more difficult or expensive for the Company to meet market demand for particular product or design innovations. If the Company is required to seek licenses under patents or other intellectual property rights of others, the Company may not be able to acquire these licenses on acceptable terms, if at all. Even if the Company successfully defends against claims of infringement or misappropriation, the Company may incur significant costs and diversion of management attention and resources, which could adversely affect the Company’s business and financial results.

Disruptions in, or breaches in security of, the Company’s information technology systems have adversely affected, and in the future could adversely affect, the Company’s business.

The Company relies on information technology systems, some of which are managed by third parties and some of which are managed on a decentralized, independent basis by the Company’s operating companies, to process, transmit, and store electronic information (including sensitive data such as confidential business information and personally identifiable data relating to employees, customers, and other business partners), and to manage or support a variety of critical business processes and activities. These systems (or the systems of third parties upon whom the Company relies) have been in the past, and in the future may be, damaged, disrupted, accessed, or shut down due to attacks by computer hackers, nation states, cyber-criminals, computer viruses, ransomware, phishing schemes, denial of service attacks, user error or malfeasance by employee or former employees, power outages, hardware failures, telecommunication or utility failures, catastrophes (including natural disasters and terrorist attacks), or other similar events, and in any such circumstances the Company’s system redundancy and other

disaster recovery planning may be ineffective or inadequate. Since the techniques used to obtain unauthorized access to systems, or to otherwise sabotage them, change frequently and are often not recognized until launched against a target, the Company may be unable to anticipate these techniques or to implement adequate preventative measures. As these threats continue to evolve, particularly around cybersecurity, the Company may be required to expend significant resources to enhance its control environment, processes, practices, and other countermeasures. While the Company has designed and implemented controls to restrict access to its data and information technology infrastructure, it is still vulnerable to unauthorized access through cyber-attacks, theft, and other security breaches. In addition, although the Company seeks to improve its countermeasures to prevent such events, it may be unable to anticipate every scenario and it is possible that certain cyber threats or vulnerabilities will be undetected or unmitigated in time to prevent an attack on the Company, its customers, or third parties. Security breaches of the Company’s systems or lack of sufficient controls in the Company’s systems (or the systems of the Company’s customers, suppliers, or other business partners) could result in the misappropriation, change, destruction, exfiltration, or unauthorized disclosure of confidential information or personal data belonging to the Company or to its employees, partners, customers, or suppliers.

Like many multinational corporations, the Company’s information technology systems have been subject to computer viruses, malicious codes, and other cyber-attacks that have resulted in disruption of the Company’s operations, unauthorized access to confidential information, and increased the cost of operations through containment, investigation, and remediation efforts, including cybersecurity incidents in the fourth quarter of 2023. To date, the disruptions from such cybersecurity incidents have not materially impacted the Company’s business strategy, results of operations, or financial condition. However, the Company expects to be subject to similar incidents in the future as such attacks become more sophisticated and frequent, any of which may have a material adverse impact on the Company’s business strategy, results of operations, or financial condition. Increasing use of AI may increase these risks, including through the development of increasingly sophisticated or novel forms of cyber-attack. Geopolitical tensions or conflicts may further heighten the risk of cyber-attacks. Although the Company has insurance coverage for protecting against damages resulting from cyber-attacks and other privacy and security incidents, it may not be sufficient to cover all possible claims. Any of the attacks, breaches, or other disruptions or damage described above, as well as corresponding remediation efforts, can disrupt the Company’s operations, delay production and shipments, result in theft of the Company and the Company’s customers’ intellectual property and trade secrets, damage customer and business partner relationships and the Company’s reputation, or result in defective products or services, legal claims and proceedings, liability and penalties under privacy laws, and increased costs for security and remediation, each of which could adversely affect the Company’s business and financial results.

The Company uses artificial intelligence in, and is in the process of further incorporating artificial intelligence into, the Company’s business and in the Company’s products, services, operations, and product development processes, and challenges with properly managing its use could result in reputational harm, competitive harm, legal liability, and operational disruption, and adversely affect the Company’s results of operations.

The Company incorporates, and is in the process of further incorporating, AI solutions, including generative AI, into the Company’s products, services, operations, and developmental processes. In addition, third parties upon whom the Company relies use AI-enabled or -integrated systems and tools, including systems and tools that include generative AI for customers and the Company’s workforce. The Company’s competitors or other third parties may incorporate AI into their products or operational processes more quickly, more effectively, or at a lower cost than the Company, which could impair the Company’s ability to compete effectively and adversely affect its results of operations. Certain AI technologies may enable, or accelerate the pace of, disruption in the Company’s industry, including by allowing existing and future competitors to compete with or outpace the Company in areas in which the Company currently has a competitive advantage.

AI is an emerging technology, and ineffective or inadequate AI development or deployment, safeguards, controls, or application practices by the Company or third parties could result in unintended consequences. There are significant risks, uncertainties, and costs involved in developing and deploying AI, and there can be no assurance that the usage of AI will enhance the Company’s products or services or be beneficial to its business, including its efficiency or profitability. For example, models, including large language models, underlying AI solutions that the Company uses may be flawed or may be based on datasets that are biased or insufficient, or datasets of poor quality. In addition, any latency, disruption, or failure in the Company’s AI systems or data infrastructure could result in delays or errors in its offerings or operational activities. In addition, the Company’s AI-related efforts, particularly those related to generative AI, subject the Company to risks related to intellectual property infringement or

misappropriation, data privacy, and cybersecurity, among others. It will require significant resources to develop, test, validate, secure, and maintain the Company’s platforms, services, and features to successfully implement AI and minimize any unintended harmful impacts. There can be no assurance that the Company’s use of AI will yield the intended benefits or that the Company will be able to effectively mitigate the associated risks.

The regulation of AI by government or other regulatory agencies is evolving, and it is uncertain how various laws related to intermediary liability, intellectual property, privacy, data use, and other issues will apply to content generated by AI. Compliance with new or changing laws, regulations, or industry standards relating to AI may impose significant operational costs, require changes to the Company’s technology, processes, or governance frameworks, or may limit or foreclose the Company’s ability to develop, deploy, or use AI technologies. The Company’s use of AI could also result in real or perceived social harm, unfairness, or other outcomes that undermine public confidence in the Company’s use and deployment of AI, which could thereby harm the Company’s business reputation and erode customer trust.

Defects and unanticipated use or inadequate disclosure with respect to the Company’s products or services could adversely affect the Company’s business, reputation, and financial results.

Manufacturing or design defects impacting safety, cybersecurity, or quality issues (or the perception of such issues) for the Company’s products and services can lead to personal injury, death, property damage, data loss, or other damages. These events could lead to recalls or safety or other public alerts, result in product or service downtime, or the temporary or permanent removal of a product or service from the market, and result in product liability or similar claims being brought against the Company. Recalls, downtime, removals, and product liability and similar claims (regardless of their validity or ultimate outcome) can result in significant costs, as well as negative publicity and damage to the Company’s reputation that could reduce demand for the Company’s products and services.

Adverse changes in the Company’s relationships with, or the financial condition, performance, purchasing patterns, or inventory levels of, key distributors and other channel partners could adversely affect the Company’s financial results.

Certain of the Company’s businesses sell a significant amount of their products to key distributors and other channel partners that have valuable relationships with customers and end-users. Some of these distributors and other partners also sell the Company’s competitors’ products or compete with the Company directly, and if they favor competing products for any reason, they may fail to market the Company’s products effectively. Adverse changes in the Company’s relationships with these distributors and other partners, or adverse developments in their financial condition, performance or purchasing patterns, could adversely affect the Company’s financial results. The levels of inventory maintained by the Company’s distributors and other channel partners, and changes in those levels, can also significantly impact the Company’s results of operations in any given period. In addition, the consolidation of distributors and customers in certain of the industries in which the Company operates could adversely impact the Company’s profitability.

The Company’s financial results are subject to fluctuations in the cost and availability of commodities or components that the Company uses in its operations.

As further discussed in the section entitled “Business — Materials,” the Company’s manufacturing and other operations employ a wide variety of components, raw materials, and other commodities. Prices for and availability of these components, raw materials, and other commodities have fluctuated significantly in the past. In particular, widespread supply chain challenges due to labor, raw material, and component shortages, as well as widespread logistics issues, have affected companies in multiple industries (including the Company), raised material and shipping costs, limited the quantities available, and extended the lead time required for supplies and deliveries. Any sustained interruption in the supply of these items, including as a result of general supply chain constraints, increasing demand outpacing supplies, or contractual disputes with suppliers or vendors, could adversely affect the Company’s business again in the future. In addition, due to the highly competitive nature of the industries that the Company serves, the cost-containment efforts of the Company’s customers, and the terms of certain contracts the Company is party to, if commodity or component prices rise, the Company may be unable to pass along cost increases through higher prices. If the Company is unable to fully recover higher commodity or component costs through price increases or offset these increases through cost reductions or alternative supply, or if there is a time delay between the increase in costs and the Company’s ability to recover or offset these costs, the Company could experience lower margins and profitability, and the Company’s financial results could be adversely affected.

If the Company cannot adjust its manufacturing capacity, supply chain management, or the purchases required for its manufacturing activities to reflect changes in market conditions, customer demand, and supply chain disruptions, the Company’s profitability may suffer. In addition, the Company’s reliance upon sole or limited sources of supply for certain materials, components, and services could cause production interruptions, delays, and inefficiencies.

The Company purchases materials, components, and equipment from third parties for use in the Company’s manufacturing operations. The Company’s income could be adversely impacted if the Company is unable to adjust the Company’s purchases and supply chain management to reflect any supply chain or transportation disruptions or changes in customer demand and market fluctuations, geopolitical disruptions, severe weather events, increases in demand outpacing supply capabilities, labor shortages, seasonality, or cyclicality. During a market upturn or general supply chain disruptions, suppliers have extended lead times, limited supplies, or increased prices. If the Company cannot purchase sufficient products at competitive prices and quality and on a timely enough basis to meet demand for the Company’s products, the Company may not be able to satisfy market demand, product shipments may be delayed, the Company’s costs may increase, or the Company may breach its contractual commitments and incur liabilities.

Conversely, in order to secure supplies for the production of products, the Company sometimes enters into noncancelable purchase commitments with vendors, which could impact the Company’s ability to adjust its inventory to reflect declining market demands. If demand for the Company’s products is less than the Company expects, the Company may experience additional excess and obsolete inventories and be forced to incur additional charges and its profitability may suffer.

In addition, some of the Company’s businesses purchase certain requirements from sole or limited source suppliers for reasons of quality assurance, cost effectiveness, availability, contractual obligations, or uniqueness of design. If these or other suppliers encounter financial, operating, quality, or other difficulties or if the Company’s relationship with them changes, including as a result of contractual disputes, the Company might not be able to quickly establish or qualify replacement sources of supply. The supply chains for the Company’s businesses could also be disrupted by supplier capacity constraints, operational or quality issues, bankruptcy or exiting of the business for other reasons, decreased availability of key raw materials or commodities, and external events such as natural disasters, severe weather events that are occurring more frequently or with more intense effects as a result of global climate change, public health crises, war, terrorist actions, governmental actions, and legislative or regulatory changes, among others. Any of these factors could result in production interruptions, delays, extended lead times, and inefficiencies.

Because the Company cannot always immediately adapt its production capacity and related cost structures to changing market conditions, the Company’s manufacturing capacity may at times exceed or fall short of the Company’s production requirements. Any or all of these problems could result in the loss of customers, provide an opportunity for competing products to gain market acceptance or market share, and otherwise adversely affect the Company’s profitability.

The Company’s restructuring activities could have long-term adverse effects on its business.

The Company has implemented, and may continue to implement, significant restructuring activities across the Company’s businesses to adjust its cost structure, including the Cost Savings Program announced in 2025 to address dis-synergies within the Test & Measurement segment following the Separation. These significant restructuring activities as well as the Company’s regular ongoing cost reduction activities (including in connection with the integration of acquired businesses) reduce its available talent, assets, and other resources and could slow improvements in the Company’s products and services, adversely affect its ability to respond to customers, and limits its ability to increase production quickly if demand for the Company’s products increases. Restructuring activities may also pose legal issues in various jurisdictions, including difficulty terminating certain contracts and arrangements, and negatively impact the Company’s ability to attract, recruit, and retain qualified personnel. In addition, delays or failure in implementing planned restructuring activities or other productivity improvements, unexpected costs, or failure to meet targeted improvements may diminish the operational or financial benefits the Company realizes from such actions and cause reputational harm. Any of the circumstances described above could adversely impact the Company’s business and financial results.

Work stoppages, works council campaigns, and other labor disputes could adversely impact the Company’s productivity and results of operations.

The Company has various non-U.S. collective labor arrangements. The Company is subject to potential work stoppages, works council campaigns, and other labor disputes, any of which could adversely impact the Company’s productivity, results of operations, and reputation.

If the Company suffers loss to its facilities, supply chains, distribution systems, or information technology systems due to catastrophe or other events, its operations could be seriously harmed.

The Company’s facilities, supply chains, distribution systems, and information technology systems are subject to the risk of catastrophic loss due to fire, flood, earthquake, hurricane, public health crises, war, terrorism, or other natural or man-made disasters, including those related to climate change. If any of these facilities, supply chains, or systems were to experience a catastrophic loss, it could disrupt the Company’s operations, delay production and shipments, result in defective products or services, damage customer relationships and the Company’s reputation, and result in legal exposure and large repair or replacement expenses. The third-party insurance coverage that the Company maintains will vary from time to time in both type and amount depending on cost, availability, and the Company’s decisions regarding risk retention, and may be unavailable or insufficient to protect it against losses.

The Company’s ability to attract, develop, motivate, and retain senior leaders and other key employees is critical to its success, and failure to do so could negatively affect its business.

The Company’s future performance is dependent upon the Company’s ability to attract, develop, motivate, and retain senior leaders and other key employees. The loss of services of senior leaders and other key employees or the failure to attract, motivate, and develop talented new executives or other key employees could prevent the Company from successfully implementing and executing business strategies, and therefore adversely affect the Company’s financial results. In particular, the market for highly skilled employees and leaders in the technology industry remains competitive. The Company’s success also depends on its ability to attract, develop, motivate, and retain a talented employee base. The Company’s brand, culture, ability to provide competitive compensation, locations of operations, and reputation are important to its ability to recruit and retain key employees in these competitive markets. If the Company is not competitive or successful in its recruiting efforts, if it cannot attract or retain key employees, if it does not adequately ensure effective succession planning or transfer of knowledge for the Company’s key employees, or if its employees leave the Company due to impacts from the Separation, its ability to deliver and execute on its operational, development, or portfolio strategies would be adversely affected.

Risks Related to the Separation and the Company’s Relationship with Fortive

The Company has a limited history of operating as a separate, publicly-traded company. Its historical financial information prior to the Separation is not necessarily representative of its future results as a separate, publicly-traded company.

The historical information about the Company prior to the Separation in this Annual Report refers to its businesses as operated by and integrated with Fortive. Following the Separation, the Company’s financial statements are presented on a consolidated basis. The Company’s historical financial information included in this Annual Report prior to the Separation is derived from the combined financial results and accounting records of Fortive. Accordingly, such financial information does not necessarily reflect the financial condition, results of operations, or cash flows that the Company would have achieved as a separate, publicly-traded company during the periods presented or those that the Company will achieve in the future, primarily as a result of the factors described below:

• prior to the Separation, the Company’s businesses were operated by Fortive as part of its broader corporate organization, rather than as a separate, publicly-traded company. Fortive or one of its affiliates performed various corporate functions for the Company such as legal, treasury, accounting, auditing, human resources, investor relations, corporate affairs, and finance. The Company’s historical financial results prior to the Separation reflect allocations of corporate expenses from Fortive for such functions and are likely to be less than the expenses the Company would have incurred had the Company operated as a separate publicly-traded company. The Company’s costs related to such functions previously performed by Fortive may therefore increase;

• prior to the Separation, the Company’s businesses were integrated with the other businesses of Fortive. Historically, the Company shared economies of scope and scale in costs, employees, vendor relationships, and customer relationships. Although the Company has entered into agreements with Fortive in connection with the Separation, these arrangements may not fully capture the benefits that the Company enjoyed prior to the Separation as a result of being integrated with Fortive and may result in it paying higher charges than in the past for these services. This could have an adverse effect on the Company’s results of operations and financial condition;

• generally, the Company’s working capital requirements and capital for its general corporate purposes, including acquisitions and capital expenditures, were historically satisfied as part of the company-wide cash management policies of Fortive. As a separate, publicly-traded company, the Company’s results of operations and cash flows are likely to be more volatile, and the Company may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements, which may or may not be available and may be more costly;

• as a part of Fortive, the Company was able to take advantage of Fortive’s overall size and scope to obtain more advantageous procurement terms. As a standalone company, the Company may be unable to obtain similar arrangements to the same extent that Fortive did, or on terms as favorable as those Fortive obtained, prior to completion of the Separation;

• the cost of capital for the Company’s businesses may be higher than Fortive’s cost of capital prior to the Separation;

• the Company may not realize the same tax benefits that were available to it when it was a part of Fortive;

• the Company’s historical financial information prior to the second quarter of 2025 does not reflect the debt or the associated interest expense that the Company incurred as part of the Separation; and

• as an independent public company, the Company is subject to, among other things, the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the listing standards of the NYSE and must prepare its standalone financial results according to the rules and regulations of the SEC. These reporting and other obligations place significant demands on the Company’s management and administrative and operational resources. Moreover, to comply with these requirements, the Company has had to migrate its systems, including information technology systems, implement additional financial and management controls, reporting systems and procedures, and hire additional accounting, finance, and legal staff. The Company has incurred, and expects to continue to incur, additional annual expenses related to these steps, and those expenses may be significant. If the Company is unable to implement its financial and management controls, reporting systems, information technology, and related procedures in a timely and effective fashion, the Company’s ability to comply with its financial reporting requirements and other rules that apply to reporting companies under the Exchange Act could be impaired.

Other significant changes have occurred and may continue to occur in the Company’s cost structure, management, financing, and business operations as a result of operating as a company separate from Fortive. For additional information about the past financial performance of the Company’s businesses and the basis of presentation of the historical consolidated and combined financial statements, please refer to the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated and combined financial statements and accompanying notes included elsewhere in this Annual Report.

The Company may not achieve some or all of the expected benefits of the Separation, and the Separation may adversely affect its businesses.

The Company may not be able to achieve the full strategic and financial benefits expected to result from the Separation, or such benefits may be delayed or not occur at all. The Separation was designed to provide the following benefits, among others:

• allow each company to more effectively pursue its distinct operating priorities and strategies and enable its respective management to better focus on strengthening its organic businesses and operations, to more effectively address its singular operating and other needs, and to focus exclusively on its unique opportunities for long-term growth and profitability;

• give each business the ability to create its own optimal capital structure, manage capital allocation and capital return strategies with greater agility and focus, and concentrate its financial resources solely on its own operations without having to compete for investment capital;

• create an independent equity structure for both companies, affording each with direct access to the capital markets and an enhanced ability to capitalize on unique growth opportunities, and enabling each company to use its own pure-play equity currency to pursue accretive merger and acquisition opportunities;

• permit each company to more effectively attract, retain, and motivate talent as a separate company, and to offer stock-based incentive compensation to its employees and executives that is more closely aligned with the specific growth objectives, financial goals, and performance of its business; and

• allow investors to more clearly understand the separate business models, financial profiles, and investment identities of the two companies and to separately value each company based on its distinct investment identity.

The Company may not achieve these and other anticipated benefits for a variety of reasons, including, among others:

• as a part of Fortive, the Company’s businesses benefited from Fortive’s size and purchasing power in procuring certain goods and services. As a separate entity, the Company may be unable to obtain these goods, services, and technologies at prices or on terms as favorable as those Fortive obtained prior to the Separation. The Company also incurs costs for certain functions previously performed by Fortive, such as accounting, tax, legal, human resources, and other general administrative functions, that may be higher than the amounts reflected in the Company’s historical financial results, which could cause its profitability to decrease;

• the actions required to separate the Company’s and Fortive’s respective businesses could disrupt the Company’s operations;

• certain costs and liabilities that were otherwise less significant to Fortive as a whole are more significant for the Company as a separate company;

• the Company has incurred and will continue to incur costs in connection with the transition to being a separate, publicly-traded company, including accounting, tax, legal, and other professional services costs, recruiting and relocation costs associated with hiring or reassigning the Company’s personnel, costs related to establishing a new brand identity in the marketplace, and costs to separate and establish new information systems;

• the Company may be more susceptible to market fluctuations and other adverse events than if it were still a part of Fortive;

• the Company’s businesses are less diversified than Fortive’s businesses prior to the Separation; and

• under the terms of the Tax Matters Agreement, the Company is restricted for a period of two years following the Separation from taking certain actions that could cause the Separation or certain related transactions (including certain transactions undertaken as part of the internal reorganization) to fail to qualify as tax-free for U.S. federal income tax purposes or other applicable law (or otherwise fail to qualify for their intended tax treatment). These restrictions may limit the Company’s ability to pursue certain strategic transactions or engage in other transactions that might increase the value of its businesses.

If the Company fails to achieve some or all of the benefits expected to result from the Separation, or if such benefits are delayed, its businesses, operating results, and financial condition could be adversely affected.

In connection with the Separation, each of Fortive and Ralliant agreed to indemnify each other for certain liabilities. If the Company is required to pay under these indemnities to Fortive, its financial results could be negatively impacted. In addition, there can be no assurance that the Fortive indemnities will be sufficient to insure the Company against the full amount of liabilities for which Fortive will be allocated responsibility, or that Fortive’s ability to satisfy its indemnification obligation will not be impaired in the future.

Pursuant to the separation and distribution agreement by and between the Company and Fortive (the “Separation Agreement”) and certain other agreements with Fortive, the Company and Fortive each agreed to indemnify the other for certain liabilities, in each case for uncapped amounts. Indemnities that the Company may be required to provide Fortive are not subject to any cap, may be significant, and could negatively impact the Company’s business. Any amounts the Company is required to pay pursuant to these indemnification obligations and other liabilities could require it to divert cash that would otherwise have been used in furtherance of the Company’s operating business and could negatively affect its financial position, results of operations, and cash flows.

Further, third parties could also seek to hold the Company responsible for any of the liabilities that Fortive has agreed to retain, and there can be no assurance that the indemnity from Fortive will be sufficient to protect the Company against the full amount of such liabilities, or that Fortive will fully satisfy its indemnification obligations. In addition, Fortive’s insurance will not necessarily be available to the Company for liabilities associated with occurrences of indemnified liabilities prior to the Separation, and in any event, Fortive’s insurers may deny coverage to the Company for such liabilities. Moreover, even if the Company ultimately succeeds in recovering from Fortive or such insurance providers any amounts for which the Company is held liable, the Company may be temporarily required to bear these losses. Each of these risks could negatively affect the Company’s businesses, financial position, results of operations, and cash flows.

If the Separation, together with certain related transactions, fails to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, or if certain internal restructuring transactions fail to qualify as transactions that are generally tax-free for applicable tax purposes, the Company could incur significant U.S. federal income tax liabilities and, in certain circumstances, the Company could be required to indemnify Fortive for material amounts of taxes and other related amounts pursuant to indemnification obligations under the Tax Matters Agreement.

It was a condition to the Separation that Fortive receive a private letter ruling from the IRS or an opinion of its outside tax counsel, in each case, satisfactory to the Fortive board of directors, regarding the qualification of the Separation, together with certain related transactions, as a “reorganization” within the meaning of Sections 368(a)(1)(D) and 355 of the Internal Revenue Code (the “Code”), and that such ruling or opinion, as applicable, shall not have been withdrawn, rescinded, or modified in any material respect. The IRS private letter ruling received by Fortive was based upon and relies on, among other things, various facts and assumptions, as well as certain representations, statements, and undertakings from Fortive and Ralliant, including facts, assumptions, representations, statements, and undertakings relating to the past and future conduct of the companies’ respective businesses and other matters. If any of these facts, assumptions, representations, statements, or undertakings are or become inaccurate, incomplete, or not otherwise satisfied, or if any such undertaking is not complied with, Fortive may not be able to rely on the IRS private letter ruling and could be subject to significant tax liabilities.

Notwithstanding Fortive’s receipt of the IRS private letter ruling, the IRS could determine on audit that the Separation or any related transaction is taxable for U.S. federal income tax purposes if it determines that any of the facts, assumptions, representations, statements, or undertakings upon which the ruling was based are not correct or have been violated, or for other reasons, including as a result of certain changes in the stock ownership of Fortive or the Company after the Separation or other post-Separation actions or transactions. Accordingly, notwithstanding Fortive’s receipt of the IRS private letter ruling, there can be no assurance that the IRS will not assert that the Separation or any of the related transactions does not qualify for tax-free treatment for U.S. federal income tax purposes, or that a court would not sustain such a challenge. In the event the IRS were to prevail in any such challenge or if the Separation or any related transaction is determined to be taxable for U.S. federal income tax purposes, Fortive or its shareholders could incur significant U.S. federal income tax liabilities, and the Company could also incur significant liabilities, including as a result of its indemnification obligations to Fortive under the tax matters agreement by and between the Company and Fortive (the “Tax Matters Agreement”).

In addition, prior to the Separation, Fortive and its subsidiaries completed an internal reorganization, and material tax costs were incurred by Fortive, the Company, and the Company’s respective subsidiaries in connection with the internal reorganization, including non-U.S. tax costs resulting from transactions in non-U.S. jurisdictions. Although the transactions comprising the internal reorganization were intended to be completed in a tax-efficient manner, and certain internal restructuring transactions were intended to qualify as tax-free for applicable tax purposes, there can be no assurance that the relevant taxing authorities will not assert that the tax treatment of the relevant transactions differs from the intended tax treatment. In the event the relevant taxing authorities prevail with any challenge in respect of any relevant transaction, Fortive and its subsidiaries could be subject to significant tax liabilities, and the Company could also incur significant tax liabilities, including as a result of its indemnification obligations to Fortive under the Tax Matters Agreement.

Under the Tax Matters Agreement, the Company is generally required to indemnify Fortive against taxes incurred by Fortive and related amounts resulting from (a) any inaccuracy or breach of a representation, covenant, or undertaking made by the Company in any of the Separation-related agreements and documents or in any documents relating to the IRS private letter ruling, the opinion of tax counsel relating to the Separation, or any other opinions of Fortive’s tax advisors relating to the internal reorganization, (b) an acquisition of all or a portion of the Company’s equity securities or assets, whether by merger or otherwise (and regardless of whether the Company participated in or otherwise facilitated the transaction), or (c) any other action undertaken or failure to act by the Company affecting the voting rights of the Company’s capital stock or the capital stock of certain affiliates of the Company. Any such indemnification obligation could adversely affect the Company’s business, financial condition, cash flows, and results of operations.

The Company may be affected by significant restrictions, including on its ability to engage in certain desirable capital-raising, strategic, or other corporate transactions, for a two-year period following the Separation in order to avoid triggering significant tax-related liabilities.

Under current U.S. federal income tax law, a spin-off that otherwise qualifies for tax-free treatment can be rendered taxable to the former parent corporation and its shareholders as a result of certain post-spin-off transactions, including certain acquisitions of shares or assets of the spun-off corporation. For example, a spin-off may result in taxable gain to the former parent corporation under Section 355(e) of the Code if it were later deemed to be part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, shares representing a 50 percent or greater interest (by vote or value) in the spun-off corporation. To preserve the tax-free treatment for U.S. federal income tax purposes of the Separation and certain related transactions, and in addition to the Company’s indemnity obligations described under the Tax Matters Agreement, the Company is restricted from taking any action that prevents the Separation, together with certain related transactions, from being tax-free for U.S. federal income tax purposes. Under the Tax Matters Agreement, for the two-year period following the Separation, the Company is subject to specific restrictions on its ability to enter into certain acquisition, merger, liquidation, sale, and stock redemption transactions with respect to its stock. Moreover, the Company is subject to restrictions on discontinuing the active conduct of its trade or business, the issuance or sale of stock or other securities (including securities convertible into its stock but excluding certain compensatory arrangements), and sales of assets outside the ordinary course of business. Further, the Tax Matters Agreement imposes similar restrictions on the Company and its subsidiaries that are intended to prevent certain transactions undertaken as part of the internal reorganization from failing to qualify for their intended tax treatment. These restrictions may limit the Company’s ability to pursue certain strategic transactions or other transactions that the Company may believe to be in the best interests of its stockholders or that might increase the value of its business, and may reduce its strategic and operating flexibility.

Changes by Fortive to certain tax elections on prior tax returns could adversely affect the Company’s effective tax rate and tax liabilities.

Changes made by Fortive to certain tax elections, positions, or filings on prior tax returns could have a direct impact on the Company, including potentially increasing the Company’s effective tax rate and tax liabilities. Any such changes could also trigger additional tax payments, interest, or penalties, and could affect the Company’s overall tax planning strategies, which could have a material adverse effect on the Company’s financial condition and cash flows.

Certain of the Company’s employees and directors may have potential or perceived conflicts of interest because of their equity interest in Fortive.

Because of their current or former positions with Fortive, certain of the Company’s employees and directors own equity interests in Fortive. Continuing ownership of shares of Fortive common stock and equity awards could create, or appear to create, potential conflicts of interest if the Company and Fortive face decisions that could have implications for both Fortive and the Company after the Separation. For example, potential or perceived conflicts of interest could arise in connection with the resolution of any dispute between Fortive and the Company regarding the terms of the agreements governing the Separation and the relationship with Fortive thereafter. These agreements include the Separation Agreement, transition services agreement (“Transition Services Agreement”), employee matters agreement, Tax Matters Agreement, intellectual property matters agreement, FBS license agreement, Fort Solutions license agreement, and any commercial agreements between the parties or their affiliates. Potential or perceived conflicts of interest may also arise out of any commercial arrangements that the Company may enter into with Fortive in the future. The Company has in place policies and processes governing conflicts of interest to address this risk. These include, for example, the Company’s Code of Conduct, the Corporate Governance Guidelines adopted by the Company’s Board of Directors (the “Board”), the Nominating and Governance Committee’s oversight of related person transactions, and the Board’s practice for directors to disclose any actual or potential conflict and recuse themselves from discussion and voting on the matter.

Fortive may fail to perform under various agreements entered into as part of the Separation or the Company may fail to have necessary systems and services in place when certain of the agreements expire.

The Separation Agreement and other agreements entered into in connection with the Separation determined the allocation of assets and liabilities between Ralliant and Fortive following the Separation and include certain indemnifications related to the liabilities and obligations of each company. The Transition Services Agreement entered into in connection with the Separation provides for the performance of certain services by each company for the benefit of the other for a period of time after the Separation. The Company relies on Fortive to satisfy its performance and payment obligations under these agreements. If Fortive is unable or unwilling to satisfy its obligations under these agreements, including its indemnification obligations, the Company could incur operational difficulties or losses.

In connection with the Separation, the Company established or expanded its own tax, treasury, internal audit, investor relations, corporate governance and listed company compliance, and other corporate functions. The Company has incurred, and expects to continue to incur, costs in connection with replicating these corporate functions to replace the corporate services that Fortive historically provided the Company prior to the Separation. Any failure or significant downtime in the Company’s financial, administrative, or other support systems or in the Fortive financial, administrative, or other support systems during the transitional period in which Fortive provides the Company with support could negatively impact the Company’s results of operations or prevent the Company from paying its suppliers or employees, executing its business strategy (including business combinations) and foreign currency transactions, or performing administrative or other services on a timely basis, which could negatively affect the Company’s results of operations.

The Company’s inability to resolve favorably any disputes that arise between the Company and Fortive with respect to its past and ongoing relationships may adversely affect its operating results.

Disputes may arise between Fortive and the Company in a number of areas relating to the Company’s ongoing relationships following the Separation, including:

• labor, tax, employee benefit, indemnification, and other matters arising from the Company’s Separation;

• employee retention and recruiting;

• business combinations involving the Company or Fortive; and

• the nature, quality, and pricing of services that the Company and Fortive have agreed to provide each other.

The Company may not be able to resolve potential conflicts, and even if the Company does, the resolution may be less favorable than if the Company were dealing with an unaffiliated party, which in each case could adversely affect its operating results.

The Company may be held liable to Fortive if the Company fails to perform certain services under the Transition Services Agreement, and the performance of such services may negatively impact its business and operations.

In connection with the Separation, Ralliant and Fortive entered into the Transition Services Agreement, which provides for the performance of certain services by each company for the benefit of the other for a period of time after the Separation. If the Company does not satisfactorily perform its obligations under the agreement, the Company may be held liable for any resulting losses suffered by Fortive, subject to certain limits. In addition, during the periods covered by the Transition Services Agreement, the Company’s management and employees may be required to divert their attention away from the Company’s business in order to provide services to Fortive, which could adversely affect its business.

Risks Related to the Company’s Indebtedness

The Company’s currently outstanding and future indebtedness could adversely affect the Company’s businesses and its ability to meet its obligations, pay dividends, and repurchase shares of its common stock.

As of December 31, 2025, the Company had outstanding indebtedness of approximately $1.15 billion, and had the ability to incur an additional $750.0 million of indebtedness under its revolving credit facility. This debt could have important, adverse consequences to the Company and its investors, including:

• requiring a substantial portion of the Company’s cash flow from operations to make interest payments;

• making it more difficult to satisfy other obligations;

• increasing the Company’s vulnerability to general adverse economic and industry conditions;

• reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow the Company’s businesses;

• limiting the Company’s ability to pay dividends or repurchase shares of its common stock;

• placing the Company at a competitive disadvantage relative to its competitors that may not be as highly leveraged;

• limiting the Company’s flexibility in planning for, or reacting to, changes in its businesses and industries; and

• limiting the Company’s ability to borrow additional funds as needed or take advantage of business opportunities as they arise.

The credit agreement governing the Company’s credit facilities (the “Credit Agreement”) contains restrictive covenants that could limit its ability to engage in activities that may be in its long-term interest, including incurring additional indebtedness, merging or engaging in other fundamental changes, selling assets, paying dividends or making distributions, or repurchasing shares of its common stock, and require the Company to maintain compliance with an EBITDA-based leverage ratio. If the Company breaches any of these restrictions and cannot obtain a waiver from the lenders on favorable terms, subject to applicable cure periods, the outstanding indebtedness, including under the Company’s revolving credit facility (and any other indebtedness with cross-default provisions), could be declared immediately due and payable, which would adversely affect the Company’s liquidity and financial results. Additionally, the Company’s outstanding term loans bear interest at floating rates and are subject to market movements in interest rates, which makes interest cost more difficult to predict and could result in higher interest expense. For additional information regarding the Company’s indebtedness, please refer to Note 9 to the consolidated and combined financial statements included in this Annual Report.

The risks described above will increase with the amount of indebtedness the Company incurs, and in the future, the Company may incur significant indebtedness in addition to the indebtedness described above. In addition, the Company’s actual cash requirements in the future may be greater than expected.

The Company may not be able to generate sufficient cash to service all of the Company’s indebtedness and may be forced to take other actions to satisfy the Company’s obligations under its indebtedness, which may not be successful.

The Company’s ability to make scheduled payments on or refinance its debt obligations depends on its financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory, and other factors beyond its control. If the Company is unable to refinance its debt obligations, it will need to repay its outstanding indebtedness at maturity. The Company may be unable to maintain a level of cash flow from operating activities sufficient to permit it to pay the principal and interest on the Company’s indebtedness as it becomes due.

If the Company’s cash flows and capital resources are insufficient to fund its debt service obligations, the Company could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures, or to dispose of material assets or operations, alter or eliminate its dividend payments, seek additional debt or equity capital, or restructure or refinance its indebtedness. The Company may not be able to effect any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow it to meet its scheduled debt service obligations and could adversely affect the Company’s business and financial condition. The Credit Agreement imposes restrictions on its ability to dispose of assets and the use of proceeds from those dispositions. The Company may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations when due.

In addition, the Company conducts its operations through its subsidiaries. Accordingly, repayment of the Company’s indebtedness depends on the generation of cash flow by its subsidiaries, including certain international subsidiaries, and their ability to make such cash available to the Company by dividend, debt repayment, or otherwise. The Company’s subsidiaries may not have any obligation to pay amounts due on its indebtedness or to make funds available for that purpose. The Company’s subsidiaries may not be able to, or may not be permitted to, make adequate distributions to enable it to make payments in respect of its indebtedness. Each subsidiary is a distinct legal entity and, under certain circumstances, legal, tax, and contractual restrictions may limit its ability to obtain cash from its subsidiaries. Additionally, a significant portion of the Company’s cash flow is generated by subsidiaries outside the U.S., which may be subject to regulations that could prevent or delay the repatriation of funds. In the event that the Company does not receive distributions from its subsidiaries, the Company may be unable to make required principal and interest payments on its indebtedness.

The Company’s inability to generate sufficient cash flows to satisfy its debt obligations, or to refinance its indebtedness on commercially reasonable terms or at all, may materially adversely affect its business, financial condition, and results of operations and the Company’s ability to satisfy its obligations under its indebtedness, pay dividends on or repurchase shares of its common stock.

Challenges in the capital markets or deterioration in the Company’s financial condition may adversely affect the Company’s ability to access capital on favorable terms or at all.

Volatility in global financial markets, including elevated interest rates as experienced during 2024 and most of 2025, could increase borrowing costs or affect the Company’s ability to borrow funds. Additionally, a material decline in the demand for the Company’s services or in the solvency of its customers or suppliers or other significantly unfavorable changes in economic conditions may adversely affect the Company’s business and financial condition.

Risks Related to Shares of the Company’s Common Stock

If the Company is unable to implement and maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of the Company’s financial reports and the market price of its common stock may be negatively affected.

The Company’s financial results were previously included within the combined results of Fortive, and the Company was not directly subject to the reporting and other requirements of the Exchange Act. As a result of the Separation, the Company is directly subject to reporting and other obligations under the Exchange Act, including the requirements of Section 404 of the Sarbanes-Oxley Act, which will, beginning with the Company’s second Annual Report on Form 10-K, require annual management assessments of the effectiveness of its internal control over financial reporting and an opinion by the Company’s independent registered public accounting firm as to the effectiveness of its internal control over financial reporting. At such time, the Company’s independent registered

public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which the Company’s internal control over financial reporting is documented, designed, or operating. These reporting and other obligations will place significant demands on the Company’s management and administrative and operational resources, including accounting resources. The Company may not have sufficient time to meet these obligations by the applicable deadlines.

The process of designing, implementing, and testing the internal control over financial reporting required to comply with these obligations is time consuming, costly, and complicated. If the Company identifies material weaknesses in its internal control over financial reporting, if the Company is unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or to conclude that its internal control over financial reporting is effective, or if the Company’s independent registered public accounting firm is unable to express a favorable opinion as to the effectiveness of the Company’s internal control over financial reporting, investors may lose confidence in the accuracy and completeness of its financial reports, the market price of its common stock could be negatively affected, and the Company could become subject to investigations by the SEC or other regulatory authorities, which could limit Ralliant’s ability to access the global capital markets and could have a material adverse effect on the Company’s business, financial condition, results of operations, and cash flows.

The obligations associated with being a public company require significant resources and management attention, which could negatively affect the Company’s business and financial condition.

As a public company listed on the NYSE, the Company is required to, among other things:

• prepare and file periodic reports, current reports, proxy statements, and other filings in compliance with the federal securities laws;

• have its own board of directors and committees thereof, which comply with federal securities laws and applicable NYSE listing standards;

• maintain an internal audit function;

• maintain the Company’s own financial reporting and disclosure compliance functions;

• maintain internal policies, including those relating to insider trading and disclosure controls and procedures; and

• comply with the Sarbanes-Oxley Act, the Dodd-Frank Act, and the rules and regulations promulgated by the SEC, the Public Company Accounting Oversight Board, and the NYSE.

These reporting and other obligations place significant demands on the Company’s management and its administrative and operational resources, and the Company faces increased legal, accounting, administrative, and other costs and expenses relating to these demands that it did not incur as a segment of Fortive. The Company’s investment in compliance with existing and evolving regulatory requirements has resulted and will continue to result in increased administrative expenses and a diversion of management’s time and attention from sales-generating activities to compliance activities, which could have an adverse effect on its business, financial position, results of operations, and cash flows.

The market price of shares of the Company’s common stock has been, and may in the future be, volatile, which could cause the value of your investment to decline.

The market price of the Company’s common stock has been, and may in the future be, highly volatile and could be subject to wide fluctuations. From time to time, equity markets may experience significant price and volume fluctuations. This market volatility, as well as general economic, market, or political conditions, could reduce the market price of shares of the Company’s common stock regardless of its operating performance. In addition, the Company’s operating results could be below the expectations of public market analysts and investors or its own guidance due to a number of potential factors, including variations in the Company’s quarterly operating results or dividends to stockholders, additions or departures of key management personnel, failure to meet analysts’ earnings estimates, publication of research reports about its industry, litigation and government investigations, changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting its business, adverse market reaction to any indebtedness the Company may incur or securities the Company may issue in the

future, changes in market valuations of similar companies or speculation in the press or investment community, announcements by the Company or its competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures, or capital commitments, or adverse publicity about the industries the Company participates in or individual scandals, and in response, the market price of shares of its common stock could decrease significantly.

In the past few years, stock markets have experienced extreme price and volume fluctuations. In the past, following periods of volatility in the overall market and the market price of a company’s securities (whether due to its financial results, industry developments, or other factors), securities class action litigation has often been instituted against such company. Such litigation, if instituted against the Company, could result in substantial costs and a diversion of the Company’s management’s attention and resources.

The Company cannot guarantee the continued payment of dividends on its common stock, or the timing or amount of any such dividends.

Any future declaration and payments of dividends, including any change in the timing and amount thereof, on the Company’s common stock will be determined by the Company’s Board in its discretion and will depend on business conditions, financial results, and other factors that the Board deems relevant. The Company’s ability to pay dividends will depend on its ongoing ability to generate cash from operations and on its access to the capital markets. The Company cannot guarantee that the Company will continue to pay dividends in the future, or the timing or amount of any such dividends.

If securities or industry analysts do not publish research or publish misleading or unfavorable research about the Company’s business, its stock price and trading volume could decline.

The trading market for the Company’s common stock depends in part on the research and reports that securities or industry analysts publish about the Company or its business. If one or more of the analysts who covers the Company’s common stock downgrades its stock or publishes misleading or unfavorable research about its business, its stock price would likely decline. If one or more of such analysts ceases coverage of Ralliant common stock or fails to publish reports on the Company regularly, demand for Ralliant common stock could decrease, which could cause the Company’s common stock price or trading volume to decline.

Your percentage ownership in the Company may be diluted in the future.

In the future, your percentage ownership in the Company may be diluted because of equity issuances for acquisitions, capital market transactions, or otherwise. The Company has granted equity awards to its employees and directors under its stock incentive plan and anticipates granting additional awards from time to time. These awards will have a dilutive effect on your percentage ownership in the Company as well as the Company’s earnings per share, which could adversely affect the market price of its common stock.

In addition, the Company’s amended and restated certificate of incorporation authorizes the Company to issue, without the approval of its stockholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over the Company’s common stock respecting dividends and distributions, as the Board generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of the Company’s common stock. For example, the Company could grant the holders of preferred stock the right to elect some number of its directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences that the Company could assign to holders of preferred stock could affect the residual value of the Company’s common stock.

Certain provisions in the Company’s amended and restated certificate of incorporation and bylaws, and of Delaware law, may prevent or delay an acquisition of the Company, which could decrease the trading price of its common stock.

The Company’s amended and restated certificate of incorporation and amended and restated bylaws contains, and Delaware law permits, provisions that are intended to deter coercive takeover practices and inadequate takeover bids and to encourage prospective acquirers to negotiate with the Board rather than to attempt an unsolicited takeover not approved by the Board. These provisions include, among others:

• until the fourth annual stockholder meeting following the Separation, the inability of the Company’s stockholders to call a special meeting;

• the inability of the Company’s stockholders to act by written consent;

• rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings;

• the right of the Board to issue preferred stock without stockholder approval;

• until the fourth annual stockholder meeting following the Separation, the division of the Board into three classes of directors, with each class consisting, as nearly as may be possible, of one-third of the total number of directors and serving a three-year term, which could have the effect of making the replacement of incumbent directors more time-consuming and difficult;

• so long as the Board is classified, the provision that stockholders may only remove directors for cause;

• the ability of the Company’s directors, and not stockholders, to fill vacancies (including those resulting from an enlargement of the Board) on the Board; and

• until the fourth annual stockholder meeting following the Separation, the requirement that the affirmative vote of stockholders holding at least two-thirds of the Company’s voting stock is required to amend its amended and restated bylaws and certain provisions in its amended and restated certificate of incorporation.

In addition, because the Company has not chosen to be exempt from Section 203 of the Delaware General Corporation Law (the “DGCL”), this provision could delay or prevent a change of control that the Company’s stockholders may favor. Section 203 provides that, subject to limited exceptions, persons that acquire, or are affiliated with a person that acquires, more than 15% of the outstanding voting stock of a Delaware corporation (an “interested stockholder”) shall not engage in any business combination with that corporation, including by merger, consolidation, or acquisitions of additional shares, for a three-year period following the date on which the person became an interested stockholder, unless (i) prior to such time, the board of directors of such corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (ii) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of such corporation at the time the transaction commenced (excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) the voting stock owned by directors who are also officers or held in employee benefit plans in which the employees do not have a confidential right to tender or vote stock held by the plan); or (iii) on or subsequent to such time the business combination is approved by the board of directors of such corporation and authorized at a meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock of such corporation not owned by the interested stockholder.

The Company believes these provisions will protect its stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with the Board and by providing the Board with more time to assess any acquisition proposal. These provisions are not intended to make the Company immune from takeovers. However, these provisions will apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that the Board determines is not in the best interests of the Company and its stockholders. These provisions may also prevent or discourage attempts to remove and replace incumbent directors.

The Company’s amended and restated certificate of incorporation designates the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by its stockholders. The Company’s amended and restated certificate of incorporation further designates the federal district courts of the United States of America as the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. These forum selection provisions could discourage lawsuits against the Company and its directors and officers.

The Company’s amended and restated certificate of incorporation provides that, unless the Company consents in writing otherwise, the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware, will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of the Company, any action asserting a claim of breach of a fiduciary duty owed by any of its directors, officers, employees, or stockholders to the Company or its stockholders, any action asserting a claim against the Company or any of its directors or officers arising pursuant to any provision of the DGCL or its amended and restated certificate of incorporation or amended and restated bylaws, any action asserting a claim against the Company or any of its directors or officers governed by the internal affairs doctrine, or any action asserting an “internal corporate claim” as defined in the DGCL. The Company recognizes that this forum selection clause may impose additional litigation costs on stockholders in pursuing any such claims, particularly if the stockholders do not reside in or near the State of Delaware.

Section 22 of the Securities Act of 1933, as amended (the “Securities Act”), creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, the Company’s amended and restated certificate of incorporation further provides that, unless the Company consents in writing otherwise, the federal district courts of the United States of America will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder, and as a result, the exclusive forum provision does not apply to actions arising under the Exchange Act or the rules and regulations thereunder. While the Delaware Supreme Court ruled in March 2020 that federal forum selection provisions purporting to require claims under the Securities Act be brought in federal court are “facially valid” under Delaware law, there is uncertainty as to whether other courts will enforce the Company’s federal forum selection provision described above. The Company’s stockholders will not be deemed to have waived compliance with the federal securities laws and the rules and regulations thereunder as a result of the Company’s forum selection provisions.

Although Ralliant believes these forum selection provisions benefit the Company by providing increased consistency in the application of law in the types of lawsuits to which they apply, these provisions may limit the ability of the Company’s stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with the Company or its directors or officers, and it may be costlier for Ralliant stockholders to bring a claim in the designated courts than other judicial forums, each of which may discourage such lawsuits against Ralliant and its directors and officers. If a court were to find the Company’s forum selection provisions inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, the Company may incur additional costs associated with resolving such matters in other jurisdictions and it may not obtain the benefits of limiting jurisdiction to the courts selected.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis of financial condition and results of operations (“MD&A”) of Ralliant for the fiscal years ended December 31, 2025 and 2024 should be read in conjunction with the Company’s consolidated and combined financial statements and accompanying notes included in Part II, Item 8 of this Annual Report. This MD&A generally discusses results for the years ended December 31, 2025 and 2024 and includes year-to-year comparisons between such years. Information regarding results for the year ended December 31, 2023 and year-over-year comparisons between the years ended December 31, 2024 and 2023 may be found in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Information Statement filed with the U.S. Securities and Exchange Commission (“SEC”) as an exhibit to the Company’s Form 10-12B/A on May 28, 2025, other than with respect to research and development expense by segment, which is set forth in Operating Expenses within the Results of Operations section below.

This MD&A is designed to provide a reader of the financial statements with a narrative from the perspective of management. This MD&A is divided into seven sections:

• Basis of Presentation

• Overview

• Results of Operations

• Financial Instruments and Risk Management

• Liquidity and Capital Resources

• Critical Accounting Estimates

• New Accounting Standards

BASIS OF PRESENTATION

The accompanying financial results present the historical financial position, results of operations, changes in equity, and cash flows of the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”). On May 27, 2025, the Board of Directors of Fortive Corporation (“Fortive” or the “Former Parent”) approved the separation of Fortive’s Precision Technologies (“PT”) operating segment through the pro rata distribution of all of the issued and outstanding common stock of Ralliant to Fortive's stockholders (the “Separation”), which was completed on June 28, 2025. Prior to the Separation, the Company operated as Fortive’s Precision Technologies segment and not as a standalone company. The combined financial statements as of June 27, 2025 or earlier have been derived from Fortive’s consolidated financial statements and accounting records and prepared in accordance with GAAP for the preparation of carved-out combined financial statements. Through the date of the Separation, all revenues and costs, as well as assets and liabilities, directly associated with the business activity of the Company are included as a component of the combined financial statements. Prior to the Separation, the combined financial statements also included allocations of certain general, administrative, and sales and marketing expenses from Fortive’s corporate office and from other Fortive businesses to the Company. The allocations were determined on a reasonable basis for the applicable periods; however, the amounts were not necessarily representative of the amounts that would have been reflected in the financial statements had the Company been an entity that operated independently of Fortive. Related party allocations prior to the Separation, including the method for such allocation, are discussed further in Note 18 to the consolidated and combined financial statements included in this Annual Report. In the fourth quarter of 2025, the Company made an enhancement to its reporting process related to sales by geography to better align sales to the end customer. Prior year information has been recast to conform to current year presentation.

These financial results may not be indicative of Ralliant’s financial performance had it been a separate standalone entity throughout the periods presented, nor are the results stated herein indicative of what its financial position, results of operations, and cash flows may be in the future.

OVERVIEW

General

Ralliant is a global technology company with businesses that design, develop, manufacture, and service precision instruments and highly engineered products. The Company empowers engineers with precision technologies essential for breakthrough innovation in an electrified and digital world, enabling its customers to bring advanced technologies to market faster and more efficiently. Its strategic segments – Test and Measurement and Sensors and Safety Systems – include well-known brands with prominent positions across a range of attractive end markets. The Company is headquartered in Raleigh, North Carolina, and has a global team of approximately 7,000 employees with solutions which are used in more than 90 countries by over 90,000 customers.

Ralliant is a multinational business with global operations, where sales derived from customers outside the United States were 48.7% and 49.5% for the years ended December 31, 2025 and December 31, 2024, respectively.

As a company with global operations, Ralliant’s businesses are affected by worldwide, regional, and industry-specific economic and political factors. Its geographic and industry diversity, as well as broad product and service offerings, typically limits the impact of any single industry or the economy of any single country (except for the United States) on its operating results. Given the broad range of its offerings and the geographies served, the Company does not use any indices other than general economic trends to predict the overall outlook for the Company. The Company monitors key competitors and customers, including their sales to the extent possible, to gauge relative performance and the outlook for the markets within which it competes.

Ralliant operates in a highly competitive business environment and its long-term growth and profitability will depend, in particular, on its ability to execute across geographies and end markets, develop innovative and differentiated new product offerings, continue to reduce costs, improve operating efficiency, and attract, retain, and develop an empowered workforce. The Company makes, and expects to continue to make, investments in research and development, customer-facing resources, its workforce and its manufacturing capabilities and capacity to meet the needs of its customers.

Recent and ongoing changes to U.S. tariff policy have resulted in broad-based increases in tariff rates, and several countries, including China, have imposed or threatened to impose retaliatory measures on imports from the U.S. The U.S. government has announced various modifications to its tariff policy, and further changes may be made in the future. Changes to trade policies, retaliatory measures, and sustained uncertainty in global trade relationships have negatively impacted, and are expected to continue to negatively impact, the Company’s operations and financial results, including through resulting supply chain disruptions, increased input costs, delayed shipments, and increased operational complexities and costs. Additionally, these developments have contributed in the past and may in the future contribute to adverse macroeconomic conditions and increased economic nationalism, which could further reduce demand for the Company’s products and negatively impact its business.

The Company continues to evaluate the evolving impact of these tariffs, as the application and imposition of these tariffs remain unpredictable. The Company continues to deploy the Ralliant Business System (“RBS”), including tools and processes to leverage existing sourcing strategies and optimize production and logistics, to actively manage these challenges and utilize pricing, cost, and productivity actions and other countermeasures to offset the aforementioned dynamics.

Non-GAAP Measures

In this Annual Report, references to sales from existing businesses (“organic revenue”) refer to sales from operations calculated according to GAAP but exclude (1) the impact from acquired and divested businesses and (2) the impact of foreign currency translation. The portion of sales attributable to acquisitions or acquired businesses refers to sales from acquisitions or acquired businesses prior to the first anniversary of the acquisition date, less the amount of sales attributable to certain businesses or product lines that, at the time of reporting, have been divested or are pending divestiture, but are not, and will not be, considered discontinued operations, prior to the first anniversary of the divestiture. The portion of sales attributable to the impact of foreign currency translation is calculated as the difference between (a) the period-to-period change in sales (excluding sales impact from acquired businesses) and (b) the period-to-period change in sales (excluding sales impact from acquired businesses) after applying the current period foreign exchange rates to the prior year period. Organic revenue should be considered in addition to, and not as a replacement for or superior to, sales from operations, and may not be comparable to similarly titled measures reported by other companies.

Management believes that reporting the non-GAAP financial measure of organic revenue, which excludes the effects of acquisitions and divestitures and foreign currency translation, provides useful information to investors by helping identify underlying growth trends in the Company’s business and facilitating comparisons of its sales performance with its performance in prior and future periods and to its peers. The Company excludes the effect of acquisition- and divestiture-related sales because the nature, size, and number of such transactions can vary dramatically from period to period and between the Company and the Company’s peers. The Company excludes the effect of foreign currency translation from organic revenue because the impact of foreign currency translation is not under management’s control and is subject to volatility.

Acquisitions

EA Elektro-Automatik Holding GmbH (“EA”), a leading supplier of high-power electronic test solutions for energy storage, mobility, hydrogen, and renewable energy applications, was acquired in January 2024. The acquisition of EA bolsters Ralliant’s innovative portfolio of products and services for engineers with complementary test and measurement solutions enabling the global energy transition. The total consideration paid was approximately $1.72 billion, net of acquired cash. Ralliant recorded approximately $1.18 billion of goodwill within its Test and Measurement segment related to the EA acquisition, which was not tax deductible. The Company anticipates future tax benefits as a result of the transaction.

Divestitures

In June 2024, Invetech, excluding the Dover Motion Business, was divested to Invetech’s management team (the “Invetech Divestiture”). As a result of the Invetech Divestiture, in the year ended December 31, 2024, a net realized loss of $25.6 million was recorded, which is identified as Loss from divestiture in the Consolidated and Combined Statements of (Loss) Earnings. The Invetech Divestiture did not represent a strategic shift with a major effect on the Ralliant’s operations and financial results, and therefore the divested businesses are not reported as discontinued operations.

Other Matters

In the third quarter of 2025, the Company announced a Cost Savings program, targeting $9 million to $11 million of annualized cost savings, which is expected to be completed by December 31, 2026. The nature of the activities is focused on spin-related dis-synergies within the Test & Measurement segment. In the fourth quarter of 2024, Ralliant initiated a discrete restructuring plan that was completed as of December 31, 2025. The nature of the activities in the plan was related to the separation from the Former Parent and consisted primarily of targeted workforce reductions to realign the cost structure. Ralliant incurred restructuring charges of $13.1 million and $8.5 million during the years ended December 31, 2025 and 2024, respectively. These charges are recorded within Cost of sales and Selling, general, and administrative expenses in the Consolidated and Combined Statements of (Loss) Earnings.

RESULTS OF OPERATIONS

Selected Financial Data

Year Ended December 31,

($ in millions)

Sales

Operating (loss) profit

Depreciation

Amortization

Operating (loss) profit as a % of sales

Depreciation as a % of sales

Amortization as a % of sales

Components of Sales Growth

Total revenue growth (GAAP)

Impact of:

Acquisitions and divestitures

Currency exchange rates

Organic revenue growth (Non-GAAP)

Sales

Sales decreased by 4.0% in 2025 compared with 2024, primarily driven by 4.1% decrease from organic revenue and a 0.5% decrease from the Invetech Divestiture, partially offset by 0.6% increase from favorable foreign currency exchange rates. The decrease in organic revenue year-over-year included volume declines of 7.3%, partially offset by favorable pricing of 3.2%.

Geographically, the sales decrease of 4.0% year-over-year was driven by a 12.2% decline in Western Europe, 2.6% decline in North America, and 7.3% decline in China, partially offset by 1.4% growth in the rest of the world.

See the Test and Measurement and Sensors and Safety Systems sections below for further discussion of year-over-year sales analysis.

Operating (Loss) Profit Margins

Operating loss margin was 57.2% for 2025, resulting primarily from the Test and Measurement goodwill impairment charge of $1.44 billion in 2025, primarily driven by revised expectations for the EA Elektro-Automatik business, reflecting slower-than-anticipated progression and recent reduction in industry forecasts of future electric vehicle (“EV”) adoption, compared with operating profit margin of 21.3% for 2024. Additional drivers of the change in operating margin primarily included the following:

• The year-over-year decrease in results from existing businesses — unfavorable 550 basis points, primarily driven by:

◦ -315 basis points from other employee costs related to higher compensation, benefits, and contract dis-synergies, allocated to the segments; -280 basis points driven by volume reduction; -170 basis points from standalone public company costs; partially offset by 180 basis points from price increases to offset the impact from tariff headwinds.

◦ As a separate public company, Ralliant incurred incremental spin-related expenses including other employee costs and incremental standalone public company costs such as corporate governance costs, including audit and other professional services fees, consulting, legal fees, and stock exchange listing fees that are reported as unallocated corporate costs.

• The year-over-year effect of the gain on sale of land and certain office buildings in 2024 — unfavorable 290 basis points.

• The stock-based compensation modification expense resulting from the conversion of Fortive equity awards in the third quarter as a result of the Separation — unfavorable 100 basis points.

• The year-over-year net effect of acquisition- and divestiture-related transaction costs incurred in 2024, primarily related to the EA acquisition — favorable 125 basis points.

Business Segments and Geographic Area Results

Sales by business segment and geographic area were as follows:

Year Ended December 31,

($ in millions)

Segments

Test and Measurement

Sensors and Safety Systems

Total

Geographic area

United States

China

All other

Total

TEST AND MEASUREMENT

The Company’s Test and Measurement segment provides precision test and measurement instruments, systems, software, and services. Through its portfolio of industry leading solutions, including oscilloscopes, probes, source measuring units, semiconductor test systems, high-power bi-directional power supplies, and measurement analysis software packages, the Test and Measurement segment empowers scientists, engineers, and technicians to create and realize technological advances with ever greater efficiency, speed, and accuracy.

Test and Measurement Selected Financial Data

Year Ended December 31,

($ in millions)

Sales

Operating (loss) profit

Depreciation

Amortization

Operating (loss) profit as a % of sales

Depreciation as a % of sales

Amortization as a % of sales

Components of Sales Growth

Total revenue growth (GAAP)

Impact of:

Currency exchange rates

Organic revenue growth (Non-GAAP)

The sales result for 2025 was primarily driven by decreases in organic revenue of 15.3%, partially offset by the favorable impact from foreign currency exchange rates.

The decrease in organic revenue was primarily attributable to declines in sales volumes of 17.4%, primarily in product lines for oscilloscopes and related accessories and high-power solutions which were driven by demand weakness across end markets, partially offset by year-over-year price increases of 2.1%.

Geographically, the sales decrease of 14.5% year-over-year was driven by 15.0% decline in North America, 23.6% decline in Western Europe, 17.3% decline in China, and 2.5% decline in the rest of the world.

Operating loss margin was 182.8% for 2025, resulting primarily from the goodwill impairment charge of $1.44 billion, compared with operating profit margin of 13.1% for 2024. Additional drivers of the change in operating margin primarily included the following:

• The year-over-year decrease in results from existing businesses — unfavorable 1,000 basis points, primarily driven by:

◦ -750 basis points driven by volume declines due to demand weakness in end markets, primarily diversified electronics, net of price increases; and -280 basis points primarily from other employee costs related to higher compensation, benefits, and contract dis-synergies, allocated from corporate.

• The year-over-year effect of the gain on sale of land and certain office buildings in 2024 — unfavorable 675 basis points.

• The year-over-year effect of acquisition-related transaction costs incurred in 2024 related to the EA acquisition — favorable 300 basis points.

SENSORS AND SAFETY SYSTEMS

The Company’s Sensors and Safety Systems segment provides leading power grid monitoring solutions, safety systems for mission critical defense and space applications, and sensing solutions for critical environments where uptime, precision, and reliability are essential. The Sensors and Safety Systems segment provides advanced monitoring, protection, and diagnostic solutions for high-voltage electrical assets in power generation, transmission, and distribution. The segment’s energetic materials, ignition safety systems, and precision pyrotechnic devices are used in mission-critical applications such as satellite deployment, rocket propulsion initiation, aerial vehicle safety systems, and military defense systems. The Sensors and Safety Systems segment also provides premium sensing products encompassing liquid level, flow, and pressure sensors, motion sensors and components, and hygienic sensors.

Sensors and Safety Systems Selected Financial Data

Year Ended December 31,

($ in millions)

Sales

Operating profit

Depreciation

Amortization

Operating profit as a % of sales

Depreciation as a % of sales

Amortization as a % of sales

Components of Sales Growth

Total revenue growth (GAAP)

Impact of:

Acquisitions and divestitures

Currency exchange rates

Organic revenue growth (Non-GAAP)

The sales result for 2025 was driven by price and volume increases of 4.6%, partially offset by the 0.9% unfavorable impact from the Invetech Divestiture.

Year-over-year price increases in the Sensors and Safety Systems segment contributed 4.1% to sales growth in 2025 compared with 2024 and is reflected as a component of the change in organic revenue. The net volume increase year-over-year resulted primarily from increases in utilities, partially offset by declines in automation and control applications and liquid and air sensors.

Geographically, the sales increase of 4.1% year-over-year was driven by 2.9% growth in North America, 12.7% growth in China, 5.7% growth in the rest of the world, and 2.3% growth in Western Europe.

Operating profit margin was 26.9% for 2025, a decrease of 80 basis points compared with 27.7% for 2024, primarily driven by -315 basis points from other employee costs related to higher compensation, benefits, and contract dis-synergies, allocated from corporate; 145 net basis points from price increases, partially offset by unfavorable product mix and 90 basis points favorable impact from the Invetech Divestiture.

COST OF SALES AND GROSS PROFIT

Year Ended December 31,

($ in millions)

Sales

Cost of sales

Gross profit

Gross profit margin

The year-over-year decrease in gross profit during 2025 compared with 2024 was primarily due to net volume declines, higher employee compensation costs, and tariffs, partially offset by year-over-year increases in price.

OPERATING EXPENSES

Year Ended December 31,

($ in millions)

Sales

Selling, general, and administrative (“SG&A”) expenses

Research and development (“R&D”) expenses

Goodwill Impairment

SG&A as a % of sales

R&D as a % of sales

SG&A expenses increased during 2025 compared with 2024 primarily due to spin-related expenses including other employee costs related to higher compensation, benefits, and contract dis-synergies, which were all allocated to the segments, standalone public company costs to establish a separate corporate function, and the stock-based compensation modification expense resulting from the conversion of Fortive equity awards upon the Separation; partially offset by lower year-over-year transaction expenses related to the EA acquisition in 2024 and benefits from productivity measures through RBS initiatives.

R&D expenses, consisting principally of internal and contract engineering personnel costs, remained consistent in total and at the segment level during 2025 compared with 2024 and 2023. For the years ended December 31, 2025, 2024, and 2023, R&D expenses were $128.8 million, $129.6 million, and $127.9 million, respectively, for the Test and Measurement segment and were $36.2 million, $33.9 million, and $33.6 million, respectively, for the Sensors and Safety Systems segment.

The Test and Measurement goodwill impairment charge of $1.44 billion, recorded in fiscal year ended December 31, 2025, was primarily driven by revised expectations for the EA Elektro-Automatik business, reflecting slower-than-anticipated progression and recent reduction in industry forecasts of future EV adoption.

NON-OPERATING INCOME (EXPENSE), NET

During the year ended December 31, 2025, the Company recognized interest expense of $32.3 million resulting from the Company’s debt. There was no interest expense in 2024. For a discussion of the Company’s long-term debt, refer to Note 9 to the consolidated and combined financial statements included in this Annual Report. During the year ended December 31, 2024, the Company recognized a net loss of $25.6 million related to the Invetech Divestiture. For further discussion of this transaction, refer to Note 1 and Note 3 to the consolidated and combined financial statements included in this Annual Report.

INCOME TAXES

General

Income tax expense and deferred tax assets and liabilities reflect management’s assessment of future taxes expected to be paid on items reflected in the Company’s consolidated and combined financial statements. The Company records the tax effect of discrete items and items that are reported net of their tax effects in the period in which they occur.

Ralliant’s effective tax rate can be affected by, among other things, changes in the mix of earnings in countries with differing statutory tax rates (including as a result of business acquisitions and dispositions), changes in the valuation of deferred tax assets and liabilities, accruals related to contingent tax liabilities and period-to-period changes in such accruals, the results of audits and examinations of previously filed tax returns (as discussed below), the expiration of statutes of limitations, the implementation of tax planning strategies, tax rulings, court decisions, settlements with tax authorities, and changes in tax laws.

Ralliant is subject to income, transaction, and other taxes in the United States and in multiple foreign jurisdictions. The Company’s future income tax provision, cash taxes paid, and effective tax rates could be volatile and difficult to predict due to changes in: business profit by jurisdiction, the amount and recognition of deferred tax assets and liabilities, the structure of legal entities, intercompany arrangements, foreign functional currency exchange rates, or applicable tax laws or policies, including interpretations or retroactive applications thereof, tax regulations, or accounting principles. For example, the Organization for Economic Co-operation and Development (“OECD”) continues to advance proposals for modernizing international tax rules, including the introduction of global minimum tax standards. The Company closely monitors changes to tax laws, regulations, accounting principles, and global tax standards, and at the time of a change, the related expense or benefit recorded may be material to the quarter and year of change. Furthermore, certain tax laws are inherently ambiguous requiring subjective interpretation on the application thereof. The Company’s interpretation and the corresponding amount of taxes it pays is, and may in the future continue to be, subject to audits by U.S. federal, state, and local tax authorities and by non-U.S. tax authorities. If these audits result in payments or assessments different from the Company’s reserves, its future results may include unfavorable adjustments to its tax liabilities and the Company’s financial statements could be adversely affected.

The Company is routinely examined by various domestic and international taxing authorities. In connection with the Separation, the Company entered into certain agreements with Fortive, including a tax matters agreement (the “Tax Matters Agreement”). The Tax Matters Agreement distinguishes between the treatment of tax matters for “Joint” filings compared to “Separate” filings prior to the Separation. “Joint” filings involve legal entities, such as those in the United States, that include operations from both Fortive and the Company. By contrast, “Separate” filings involve certain entities (primarily outside of the United States) that exclusively include either Fortive’s or the Company’s operations. In accordance with the Tax Matters Agreement, Fortive is liable for and has indemnified the Company

against all income tax liabilities involving “Joint” filings for periods prior to the Separation. The Company remains liable for certain pre-Separation income tax liabilities including those related to the Company’s “Separate” filings.

The amount of income taxes the Company pays is subject to ongoing audits by federal, state, and foreign tax authorities, which often result in proposed assessments. Management performs a comprehensive review of the Company’s global tax positions on a quarterly basis. Based on these reviews, the results of discussions and resolutions of matters with certain tax authorities, tax audit assessments, tax rulings and court decisions, and the expiration of statutes of limitations, reserves for contingent tax liabilities are accrued or adjusted as necessary.

Furthermore, changes in multilateral agreements and the tax laws of foreign jurisdictions could arise as a result of the base erosion and profit shifting project undertaken by the OECD and could significantly increase the Company’s tax provision, cash taxes paid, and effective tax rate in future years. The OECD has issued significant global tax policy changes that include both expanded reporting as well as technical global tax policy changes. During 2021, an agreed framework and model rules for a global minimum corporate tax rate of fifteen percent (15%) was released by the OECD. Many countries in which the Company operates have implemented legislation to align with model rules and with effective dates spanning from 2024 through 2025. The impact of the OECD framework for a “Pillar Two” global minimum corporate income tax rate of 15% has been included within the provision for income taxes. In January 2026, the OECD issued additional administrative guidance related to Pillar Two. The Company is evaluating the impact of this guidance on its global minimum tax exposure. Based on current information, the Company does not expect a material impact on its consolidated and condensed financial statements.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, including, but not limited to, the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act (“TCJA”), modifications to the international tax framework and the restoration of favorable tax treatment for certain business investments. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA is expected to provide significant cash tax benefits to the Company in 2025 through 2027. In addition, as a result of the retroactive treatment for research and experimental expenditures enacted under OBBBA, Ralliant was notified of Fortive’s intent to accelerate the amortization of previously capitalized research and experimental expenditures. Accordingly, Ralliant reduced its deferred tax assets by approximately $57.0 million in 2025.

For a discussion of risks related to these and other tax matters, please refer to “Item 1A. Risk Factors” in this Annual Report.

Effective Tax Rate

The following table summarizes the Company’s effective tax rate:

Year Ended December 31,

Effective tax rate

Ralliant’s effective tax rate for 2025 differs from the U.S. federal statutory rate of 21% due primarily to non-deductible goodwill impairment, the enacted reduction in the German corporate tax rate on deferred tax balances, and the positive effects of the TCJA.

Ralliant’s effective tax rate for 2024 differs from the U.S. federal statutory rate of 21% due primarily to the impacts of credits and deductions provided by law, including those associated with state income taxes, and changes in the Company’s uncertain tax position reserves.

COMPREHENSIVE INCOME

Comprehensive income decreased by $1.19 billion in 2025 compared with 2024 due to a decrease in net income of $1.58 billion, primarily driven by the Goodwill impairment of $1.44 billion, partially offset by favorable changes in foreign currency translation of $380.8 million.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Ralliant is exposed to market risk from changes in interest rates, foreign currency exchange rates, credit risk, and commodity prices, each of which could impact the Company’s financial results. The Company generally addresses its exposure to these risks through the Company’s normal operating and financing activities.

Interest Rate Risk

As of December 31, 2025, Ralliant’s outstanding debt consisted solely of variable rate, USD denominated term loans. The average effective rate for these loans was 5.5% in 2025, with interest expense of $32.7 million. Since drawing the term loans on June 27, 2025, the Company has made two interest elections, one for a period of six months and one for a period of three months. At the end of each interest period, the Company can choose a new period, with the resulting term being as short as a single day or as long as six months. To date, the Company has not used derivative financial instruments to manage the risk inherent within these floating rate instruments. As a result, each time a new interest period is elected, the Company is exposed to the then current market rates. Both positive and negative movements in interest rates will therefore affect the Company’s interest expense reported in the consolidated and combined statements of earnings. A hypothetical 100 basis point increase in interest rates would have resulted in approximately $6.0 million of additional interest expense in 2025. For further discussion of risks relating to interest rates, refer to “Item 1A. Risk Factors” in this Annual Report.

Foreign Currency Exchange Rate Risk

The Company faces transactional exchange rate risk from transactions with customers in countries outside of the United States and from intercompany transactions between affiliates. Transactional exchange rate risk arises from the purchase and sale of goods and services in currencies other than the Company’s functional currency or the functional currency of an applicable subsidiary. The Company also is exposed to translational exchange rate risk related to the translation of financial statements of the Company’s foreign operations into U.S. dollars, its functional currency. Costs incurred and sales recorded by subsidiaries operating outside of the United States are translated into U.S. dollars using exchange rates effective during the respective period. As a result, the Company is exposed to movements in the exchange rates of various currencies against the U.S. dollar. The effect of a change in currency exchange rates on the Company’s net investment in international subsidiaries is reflected in the Accumulated other comprehensive loss component of equity. A 10% depreciation in major currencies relative to the U.S. dollar as of December 31, 2025 would have resulted in a reduction of foreign currency denominated net assets and equity of approximately $234 million.

Currency exchange rates favorably impacted 2025 reported sales by 0.6% compared with 2024, as the U.S. dollar was, on average, weaker against most major currencies during 2025 compared with exchange rate levels during 2024. If the exchange rates in effect as of December 31, 2025 were to prevail throughout 2026, currency exchange rates would positively impact 2026 estimated sales by approximately 0.7% relative to the Company’s performance in 2025. In general, additional weakening of the U.S. dollar against other major currencies would further positively impact the Company’s sales and results of operations on an overall basis.

The Company has generally accepted the exposure to exchange rate movements without using derivative financial instruments to manage this risk. Both positive and negative movements in currency exchange rates against the U.S. dollar will therefore continue to affect the reported amount of sales, profit, and assets and liabilities in the Company’s consolidated and combined financial statements.

Credit Risk

Ralliant is exposed to potential credit losses from customer insolvency. The Company believes this risk is limited due to customer diversity across industry, geography, and product. The Company’s businesses perform customer credit evaluations as appropriate and take action to limit potential losses when risks are identified. The Company places cash and cash equivalents with multiple high-quality financial institutions to limit risk at any one institution.

Commodity Price Risk

The Company’s manufacturing and other operations employ a wide variety of components, raw materials, and other commodities, exposing its business to commodity price risk. The Company manages commodity price risk through diversification, strategic procurement, and continuous monitoring. The Company diversifies its commodity and spend portfolios to limit exposure to any single commodity or producer or manufacturer, reducing the potential impact of price fluctuations on the overall business performance. Ralliant’s procurement teams negotiate supplier contracts that include favorable pricing mechanisms where possible, allowing the Company to adapt to changing market conditions and reduce the risk of price escalations. The Company tracks commodity markets to assess potential risks and develop strategies to manage them effectively. For further discussion of risks relating to commodity prices, refer to “Item 1A. Risk Factors” in this Annual Report.

LIQUIDITY AND CAPITAL RESOURCES

Prior to the Separation, Ralliant was dependent upon Fortive for all funding needs. For the six months ended June 27, 2025, only cash, cash equivalents, and borrowings clearly associated with Ralliant (including the financing transactions described below) have been included in the consolidated and combined financial statements in this Annual Report. Financial transactions relating to business operations prior to the Separation were accounted for through the Net Former Parent investment account of the Company.

Following the Separation, management independently assesses the Company’s ability to generate cash to fund operating and investing activities. The Company believes operating cash flow and other sources of liquidity, will, after giving effect to any dividend payments and debt servicing obligations, be sufficient to fund the Company’s existing businesses, consummate strategic acquisitions, fulfill its contractual obligations, and manage its capital structure on a short- and long-term basis.

On May 15, 2025 (the “Closing Date”), the Company en tered into a credit agreement (the “Credit Agreement”), with a syndicate of banks. This included an eighteen month, $600.0 million senior unsecured delayed-draw term loan facility (the “Eighteen-Month Term Loan”), a three-year, $700.0 million senior unsecured delayed-draw term loan facility (the “Three-Year Term Loan”, and together with the Eighteen-Month Term Loan, the “Term Loans”) and a five-year $750.0 million senior unsecured multi-currency revolving credit facility, including a $25.0 million sublimit for swingline loans and a $75.0 million sublimit for the issuance of letters of credit (the “Revolving Credit Facility” and, together with the Term Loans, the “Credit Facilities”). The Credit Agreement contains an option to request increases of the Credit Facilities (in any combination thereof) of up to an aggregate amount of $500.0 million, subject to lender agreement, and upon the satisfaction of certain conditions.

On June 27, 2025, $1.15 billion was drawn pro rata under the Term Loans. Proceeds were used to pay Fortive for the contribution of assets to Ralliant by Fortive in connection with the Separation. Refer to Note 5 to the consolidated and combined financial statements included in this Annual Report for more information related to the Company’s long-term indebtedness.

Borrowings under the Credit Agreement are prepayable at any time in whole or in part without premium or penalty. Term Loans may not be reborrowed once repaid. Amounts borrowed under the Revolving Credit Facility may be repaid and reborrowed prior to the maturity date.

Ralliant must maintain a Consolidated Net Leverage Ratio, as defined by the Credit Agreement, of 3.50 to 1.00 or less; provided that, not more than two times after the Closing Date of the Credit Agreement, the maximum Consolidated Net Leverage Ratio may be increased to 4.00 to 1.00 in connection with any permitted acquisition by Ralliant occurring after the Closing Date with aggregate consideration (including, without duplication, the assumption or incurrence of indebtedness in connection with such acquisition) equal to or in excess of $100.0 million, which such increase shall be applicable for the fiscal quarter in which such acquisition is consummated and the three consecutive quarters thereafter; provided that, there shall be at least one full fiscal quarter following the cessation of each such increase during which no such increase shall then be in effect. The Consolidated Net Leverage Ratio is calculated at the end of each fiscal quarter and commenced in the fiscal quarter ending September 26, 2025.

On November 24, 2025, Ralliant, entered into Amendment No. 1 to the Credit Agreement (the “Amendment”). The Amendment (i) removes the credit spread adjustment and thereby reduces the Term SOFR interest rate applicable to the Company’s revolving credit facility and term loans by 0.10%, (ii) eliminates the ratings-based pricing grid that previously applied to the Company’s revolving credit facility and term loans upon receipt of a debt rating, and (iii) permanently reduces the outstanding undrawn commitments by the applicable lenders under the Three-Year Term Loan and the Eighteen-Month Term Loan to $0, thereby eliminating the 0.125% ticking fee on undrawn term loan commitments. All other material terms of the Credit Agreement remain in full force and effect as originally executed.

The Term Loans contain customary covenants. None of these covenants are considered restrictive to Ralliant’s operations. As of December 31, 2025, Ralliant was in compliance with all of the covenants under the Credit Agreement and the Amendment.

The Company cannot assure that its net cash provided by operating activities, cash and equivalents, or cash available under its Credit Facilities will be sufficient to meet its future needs. If the Company is unable to generate sufficient cash flows from operations and if availability under its Credit Facilities is not sufficient, the Company may have to obtain additional financing. If additional capital is obtained by issuing equity, the interests of existing stockholders will be diluted. If the Company incurs additional indebtedness, that indebtedness may contain financial and other covenants which significantly restrict its operations. The Company cannot assure that it could obtain refinancing or additional financing on favorable terms or at all.

On June 28, 2025, the Company's Board of Directors approved a share repurchase authorization of up to $200.0 million of the Company’s common stock. The timing and amount of share repurchases will be determined by the Company based on its evaluation of market conditions and other factors. The share repurchase authorization has no expiration date, does not obligate the Company to acquire any particular amount of shares, and may be suspended or discontinued at any time. The share repurchase authorization is consistent with the Company's capital allocation strategy to prioritize returning capital to shareholders. No share repurchases have occurred as of December 31, 2025. Subsequent to December 31, 2025, the Company repurchased 1.2 million shares at an average price of $42.40 for a total cost of $50.0 million, leaving $150.0 million remaining under the share repurchase authorization.

On January 29, 2026, the Board declared a quarterly common stock dividend of $0.05 per share, which is payable on March 23, 2026 to stockholders of record as of the close of business on March 9, 2026.

Overview of Cash Flows and Liquidity

Following is an overview of the Company’s cash flows and liquidity:

Year Ended December 31,

($ in millions)

Net cash provided by operating activities

Purchases of property, plant and equipment

Proceeds from sale of property

Cash paid for acquisitions, net of cash received

Cash infusion into divestiture

All other investing activities

Net cash used in investing activities

Proceeds from borrowings

Consideration paid to Former Parent in connection with Separation

Net transfers (to) from Former Parent

Dividends paid

All other financing activities

Net cash (used in) provided by financing activities

Operating Activities

Net cash provided by operating activities can fluctuate significantly from period-to-period as working capital needs and the timing of payments for income taxes, interest, pension funding, and other items impact reported cash flows.

Net cash provided by operating activities was $397.6 million in 2025, representing a decrease of $56.9 million compared with 2024. The year-over-year change in net cash provided by operating activities was primarily attributable to the following factors:

• A year-over-year decrease of $63.7 million in Net (loss) earnings, net of non-cash items (Goodwill impairment, Amortization, Depreciation, Stock-based compensation, Gain on sale of property, net of Loss from divestiture).

• The aggregate changes in Accounts receivable, Inventories, net, and Trade accounts payable generated $5.8 million of cash during 2025 compared with generating $48.2 million during 2024. The amount of cash flow generated from or used by the aggregate of trade accounts receivable, inventories, net, and trade accounts payable depends upon how effectively the cash conversion cycle is managed, which generally represents the number of days that elapse from the day the Company pays for the purchase of raw materials and components to the collection of cash from its customers, and can be significantly impacted by the timing of collections and payments in a period. The higher cash provided by operating activities in 2024 was primarily driven by lower inventory levels and the negotiation of extended payment terms of the Company’s supplier contracts.

• The aggregate changes in Prepaid expenses and other current assets, Accrued expenses and other liabilities, and deferred income taxes generated $0.9 million of cash during 2025 compared with using $48.3 million of cash in the comparable period of 2024. The year-over-year changes were dependent upon how effectively the Company managed the cash conversion cycle and driven by timing differences related to contract assets, contract liabilities, payments of employee compensation, income taxes, and interest.

Investing Activities

Net cash used in investing activities decreased by $1.67 billion during 2025 compared with 2024, primarily due to acquisition-related activity in the prior year.

Capital expenditures are made primarily for increasing production capacity, replacing aged equipment, supporting product development initiatives for product offerings, and improving information technology systems. Capital expenditures totaled $39.2 million in 2025 and $34.3 million in 2024.

Financing Activities

Net cash provided by financing activities reflects Proceeds from borrowings, net of issuance costs, of $1.15 billion, offset by the Consideration paid to Former Parent in connection with the Separation of $1.15 billion. Other financing activity includes net cash transferred to Former Parent during 2025 of $43.0 million, primarily related to the cash adjustment paid to Fortive in accordance with the Separation and Distribution Agreement and the payments made in the period related to the Tax Matters Agreement.

Cash and Cash Requirements

Cash

The Company held $318.8 million of Cash and equivalents as of December 31, 2025 and no Cash and equivalents as of December 31, 2024.

The Company requires cash to fund working capital, capital expenditures and acquisitions, pay interest and service debt, pay taxes and any related interest or penalties, fund pension plans as required, pay dividends to shareholders, and support other business needs or objectives. The Company generally intends to use available cash and internally generated funds to meet these cash requirements, but in the event that additional liquidity is required, particularly in connection with acquisitions and repayment of maturing debt, the Company may also borrow under its

Credit Facilities or enter into new credit facilities to borrow directly thereunder. It also may access the capital markets, including to take advantage of favorable interest rate environments or other market conditions.

Foreign cumulative earnings remain subject to foreign remittance taxes. The Company has made an election regarding the amount of earnings that it does not intend to repatriate due to local working capital needs, local law restrictions, high foreign remittance costs, previous investments in physical assets and acquisitions, or future growth needs. For most of its foreign operations, the Company makes an assertion regarding the amount of earnings in excess of intended repatriation that are expected to be held for indefinite reinvestment. No provisions for foreign remittance taxes have been made with respect to earnings that are planned to be reinvested indefinitely. The amount of foreign remittance taxes that may be applicable to such earnings is not readily determinable given local law restrictions that may apply to a portion of such earnings, unknown changes in foreign tax law that may occur during the applicable restriction periods caused by applicable local corporate law for cash repatriation, and the various tax planning alternatives it could employ if the Company repatriated these earnings.

Cash Requirements

The following table sets forth a summary of Ralliant’s short-term and long-term cash requirements as of December 31, 2025 under (1) long-term debt principal and interest obligations, (2) leases, and (3) purchase obligations. The table below does not reflect any other such obligations, as the timing and amounts of any such payments are uncertain.

Total

Due within one year of December 31, 2025

Due later than one year from December 31, 2025

Commitments:

Long-term debt principal payments (a)

Interest payments on long-term debt (b)

Operating lease obligations (c)

Purchase obligations (d)

Total

(a) The amount due within one year of December 31, 2025 is related to the Eighteen-Month Term Loan due December 2026. Refer to Note 9 to the consolidated and combined financial statements included in this Annual Report for additional information regarding the Company’s indebtedness as of December 31, 2025.

(b) Interest payments on long-term debt are projected for future periods using the interest rates in effect as of December 31, 2025. Certain of these projected interest payments may differ in the future based on changes in market interest rates.

(c) Includes future lease payments for operating leases having initial noncancelable lease terms in excess of one year.

(d) Consist of agreements to purchase goods or services that are enforceable and legally binding on Ralliant and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum, or variable price provisions, and the approximate timing of the transaction.

Other liabilities reflected on the balance sheet under GAAP includes $190.3 million due within one year of December 31, 2025 and $235.6 million due later than one year from December 31, 2025. The other liabilities primarily consisted of $260.5 million of compensation obligations, post-retirement benefits, pension benefit obligations, estimated environmental remediation costs, and self-insurance and litigation claims and $165.4 million net income tax liabilities. The timing of cash flows associated with these obligations was based upon management’s estimates over the terms of these arrangements and was largely based upon historical experience.

During 2025, Ralliant contributed $4.9 million to its non-U.S. defined benefit pension plans. During 2026, the Company’s cash contribution requirements for its non-U.S. defined benefit pension plans are expected to be approximately $5.7 million. Ralliant’s contributions to its U.S. defined benefit pension plans were immaterial in 2025 and are expected to be immaterial in 2026. The ultimate amounts the Company will contribute depends upon, among other things, legal requirements, underlying asset returns, the plan’s funded status, the anticipated tax deductibility of the contribution, local practices, market conditions, interest rates, and other factors.

Pursuant to the terms of the Tax Matters Agreement, Ralliant is required to reimburse Fortive or pay taxing authorities directly for an amount contractually agreed with Fortive of approximately $51.0 million. Of the approximately $51.0 million of tax transaction costs, $50.0 million was paid during 2025 and $1.1 million was accrued as a payable due to Fortive as of December 31, 2025. The total tax transaction costs of $51.0 million were recognized in the third quarter and were recorded as an offset to additional paid-in capital as the items represent a settlement with the Former Parent in accordance with the Tax Matters Agreement.

Borrowings under the Credit Facilities bear interest as described in Note 9 to the consolidated and combined financial statements included in this Annual Report. At facility close, Ralliant made an interest election of six-month Secured Overnight Financing Rate (“SOFR”). The first related interest payment of $16.4 million was paid on September 29, 2025 and the second payment of $15.8 million was paid on December 29, 2025, at which time a new three-month SOFR interest election was made.

As of December 31, 2025, the Company believes it has sufficient liquidity to satisfy its cash needs for the next 12 months and foreseeable future. Management expects to refinance its Eighteen-Month Term Loan prior to its maturity in December 2026.

CRITICAL ACCOUNTING ESTIMATES

Management’s discussion and analysis of Ralliant’s financial condition and results of operations is based upon the Company’s consolidated and combined financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The Company bases these estimates and judgments on historical experience, the current economic environment, and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ materially from these estimates and judgments.

The Company believes the following accounting estimates are most critical to an understanding of its financial statements. Estimates are considered to be critical if they meet both of the following criteria: (1) the estimate requires assumptions about material matters that are uncertain at the time the estimate is made, and (2) material changes in the estimate are reasonably likely from period to period. For a detailed discussion on the application of these and other accounting estimates, refer to Note 2 to the consolidated and combined financial statements included in this Annual Report.

Business Combinations

The Company accounts for business combinations using the acquisition method of accounting. Under the acquisition method, the consolidated and combined financial statements reflect the operations of an acquired business starting from the closing date of the acquisition. All assets acquired and liabilities assumed are recorded at fair value as of the acquisition date. Business combinations typically result in the recognition of goodwill, developed technology, and other intangible assets, which affect the amount of future period amortization expense and possible impairment charges that the Company may incur. The fair value of acquired intangible assets is determined using information available near the acquisition date based on estimates and assumptions that are deemed reasonable by the Company but are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Significant judgment is required in estimating the fair value of assets acquired and liabilities assumed and in assigning useful lives to certain definite-lived intangible and tangible assets. Significant assumptions include the discount rates and certain assumptions that form the basis of the forecasted cash flows of the acquired business including earnings before interest, taxes, depreciation, and amortization (“EBITDA”), revenue, revenue growth rates, royalty rates, customer attrition rates, and technology obsolescence rates. These assumptions are forward looking and could be negatively affected by future economic and market conditions. If the actual results differ from the estimates and judgments used, the amounts of intangible assets and goodwill recorded in the consolidated and combined financial statements may be subject to impairment, as discussed in the "Goodwill and Other Indefinite-Lived Intangible Assets" section below. The Company engages third-party valuation specialists who review the Company’s critical assumptions and calculations of the fair value of acquired intangible assets in connection with material acquisitions. In connection with the EA acquisition in the first quarter of 2024, the Company recorded approximately $1.18 billion of goodwill and approximately $681.2 million of intangible assets. Refer to Note 2, Note 3, and Note 5 to the consolidated and combined financial statements included in this Annual Report for a description of the Company’s policies and disclosures relating to goodwill, acquired intangibles, and acquisitions.

Goodwill and Other Indefinite-Lived Intangible Assets

The Company evaluates goodwill and other indefinite-lived intangible assets for possible impairment as of the beginning of the fourth quarter of each fiscal year, or whenever events or changes in circumstances indicate that the fair value of such assets may be below their carrying amount. As part of its annual impairment testing, the Company may elect to assess qualitative factors as a basis for determining whether it is necessary to perform quantitative impairment testing. If management’s assessment of these qualitative factors indicates that it is more likely than not that the fair value of the intangible asset or reporting unit is more than its carrying value, then no further testing is required. Otherwise, the indefinite-lived intangible asset other than goodwill or reporting unit is quantitatively tested for impairment.

Indefinite-lived intangible assets other than goodwill are quantitatively tested for impairment by estimating the fair value of the asset based on an income approach using the relief-from-royalty method. Under this method, forecasted revenues for products sold with the trademark are assigned a royalty rate that would be charged to license the trademark, and the estimated fair value is calculated as the present value of those forecasted royalties avoided by owning the trademark. These analyses require management to make significant judgments and estimates about future revenues, expenses, market conditions, royalty rates, and discount rates related to these assets.For quantitative goodwill impairment testing, the Company estimates the fair value of a reporting unit using both income-based and market-based valuation methods. Based on the range of estimated fair values developed from the income- and market-based methods, the Company determines the estimated fair value for the reporting unit as compared to the carrying value.

The income-based approach is based on the reporting unit’s forecasted future cash flows that are discounted to present value using the reporting unit’s weighted average cost of capital (“WACC”). The discounted cash flow model requires significant judgmental assumptions about projected revenue growth, future operating margins, discount rates, and terminal values. There are inherent uncertainties related to these assumptions and management’s judgment in applying them to the analysis of goodwill impairment.

The estimated fair value of a reporting unit calculated using the income approach is sensitive to changes in the underlying assumptions. In developing these assumptions, the Company relies on various factors including operating results, business plans, economic projections, anticipated future cash flows, and other market data. Examples of events or circumstances that could reasonably be expected to negatively affect the underlying judgments and factors and ultimately impact the estimated fair value determinations may include such items as a prolonged downturn in the business environment, changes in economic conditions that significantly differ from the Company’s assumptions in timing or degree, volatility in equity and debt markets resulting in higher discount rates, and unexpected regulatory changes. As a result, there are inherent uncertainties related to these judgments and factors that may ultimately impact the estimated fair value determinations.

For the market-based approach, management uses the guideline public company method. The guideline public company method analyzes market multiples of EBITDA for a group of comparable public companies. In evaluating the estimates derived by the market-based approach, management makes judgments about the relevance and reliability of the multiples by considering factors unique to the Company’s reporting units, including operating results, business plans, economic projections, anticipated future cash flows, and transactions and marketplace data as well as judgments in determining the group of comparable public companies selected.

Qualitative Annual Assessment

In the fourth quarter of 2025, the Company performed a qualitative analysis for all reporting units and indefinite-lived intangible assets. Under ASC 350, the Company has an option to perform a qualitative assessment of its reporting units and other indefinite-lived intangible assets to determine whether further impairment testing is necessary. In this qualitative assessment, the Company considered the following items for each of the reporting units and other indefinite-lived intangible assets: macroeconomic conditions, industry and market conditions, overall financial performance, and other entity specific events. Based on the results of the qualitative assessment, the Company concluded it was more likely than not that the Test and Measurement reporting unit and Tektronix indefinite-lived trade name carrying values exceeded their fair values and a quantitative assessment was performed, as discussed further below. The carrying values of the remaining reporting units’ goodwill and other indefinite-lived intangible assets at the annual impairment testing date of September 27, 2025, were $770.5 million and $17.5 million, respectively. The Company concluded it was more likely than not that the fair values exceeded the carrying values of these assets.

Quantitative Assessment

The Company completed the quantitative assessments for the Tektronix indefinite-lived trade name and Test and Measurement reporting unit using the income- and market-based valuation methods as described above. The Company’s revenue and profitability forecasts considered recent and historical performance, strategic initiatives, and industry trends. Assumptions used in the valuations were similar to those that would be used by market participants performing independent valuations of the business.

Key assumptions developed by management and used in the quantitative analysis of the Tektronix indefinite-lived trade name included:

• Financial projections and future cash flows associated with the trade name, including revenue growth rates, throughout the forecast period reflect the approved operating budget and strategic plan, as well as current industry trends and growth expectations;

• Terminal growth rates based on the expected long-term growth rate of the business;

• Royalty rates based on market data as well as historical royalty rates; and

• Market-based discount rates.

Key assumptions developed by management and used in the quantitative analysis of the Test and Measurement reporting unit included:

• Financial projections and future cash flows, including a base year that considered recent actual results lower than previous internal forecasts and lower than original projections included in the EA acquisition model, revenue growth rates and profitability margin improvement throughout the forecast period that reflects the long-term strategy for the business as well as revised industry outlook and expectations, specifically within the EV market;

• Terminal growth rates based on the expected long-term growth rate of the business; and

• Market-based discount rates.

The valuation models used by management in the impairment testing assume revenue growth, margin improvement, and execution of its long-term growth strategy. If the reporting unit is unable to achieve the financial projections, including recovery from the current policy and macroeconomic environment, an additional impairment of the Test and Measurement reporting unit goodwill or the Tektronix indefinite-lived trade name could occur in the future.

The discount rate was based on the reporting unit’s WACC that considered market participant assumptions and was adjusted, as appropriate, to factor in the risk of the reporting unit or intangible asset. The royalty rate was selected based on consideration of historical royalty rates and royalty rates received by market participants in comparable industries.

As a result of the quantitative assessment for the Tektronix indefinite-lived trade name, the Company concluded the fair value exceeds the carrying value by approximately 20% and no impairment was recorded.

As a result of the quantitative assessment for the Test and Measurement reporting unit, the Company concluded the fair value did not exceed the carrying value, primarily driven by revised expectations for the EA Elektro-Automatik business, reflecting slower-than-anticipated progression and recent reduction in industry forecasts of future EV adoption, and recorded an impairment charge to the Test and Measurement reporting unit goodwill of $1.44 billion in the Consolidated and Combined Statement of Earnings for the year ended December 31, 2025. The remaining carrying value of the Test and Measurement reporting unit goodwill after the impairment charge was $901.3 million.

Income Taxes

For a description of the Company’s income tax accounting policies and disclosures, refer to Note 2 and Note 13 to the consolidated and combined financial statements included in this Annual Report.

Ralliant accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, using enacted tax rates expected to apply in the periods in which those differences reverse.

The realization of deferred tax assets depends on the generation of sufficient future taxable income within applicable carryforward periods. The Company records valuation allowances when it is more likely than not that some or all deferred tax assets will not be realized. This determination requires significant judgment, including estimates of future taxable income, the timing and reversal of temporary differences, and the feasibility of tax planning strategies. Changes in these estimates could materially affect the Company’s income tax provision and effective tax rate.

Ralliant recognizes unrecognized tax benefits for uncertain tax positions when, based on their technical merits, it is more likely than not that the position will not be sustained upon examination. These assessments require judgment in interpreting tax laws and evaluating relevant facts and circumstances. The Company reassess uncertain tax positions on an ongoing basis and adjust unrecognized tax benefits as appropriate for changes in law, audit outcomes, judicial rulings, or the expiration of statutes of limitations. Interest and penalties related to unrecognized tax benefits are recognized in income tax expense.

NEW ACCOUNTING STANDARDS

For a discussion of new accounting standards relevant to the Company, refer to Note 2 to the consolidated and combined financial statements included in this Annual Report.