SOLV · 10-Q · 2026Q2 · Full report

Gross Margin Drivers

Solventum Corp · 2026-08-05 · Importance 51 · Surprise 50 · No source text

Cost of product declined to 47.5% of sales in the second quarter of 2026 from 51.9% in the prior-year quarter, a 4.4 percentage-point improvement. For the first six months, cost of product decreased to 49.9% of sales from 52.1%, a 2.2 percentage-point improvement. The improvement was primarily driven by IEEPA tariff refunds and programmatic savings, partially offset by inflation and tariff costs. Cost of software and rentals also declined to 22.7% of sales in the quarter and 23.0% for six months, benefiting from price and product mix.

Key facts

• The Company recognized a pre-tax benefit of $120 million to cost of product within the condensed consolidated financial statements as of June 30, 2026 related to the accepted CBP refund requests. source
• Three months ended June 30, 2026 Gross profit: $1,286 million. source
• Six months ended June 30, 2026 Gross profit: $2,382 million. source
• Cost of product measured as a percent of sales of product decreased to 47.5% from 51.9% for the three months ended June 30, and to 49.9% from 52.1% for the six months ended June 30 (percent columns shown). source
• Cost of software and rentals measured as a percent of sales decreased to 22.7% from 24.5% for the three months ended June 30, and to 23.0% from 25.1% for the six months ended June 30 (percent columns shown). source

Impact estimates