{"schemaVersion":1,"research":true,"symbol":"solv","name":"Solventum","topic":"moat","path":"/stock/solv/moat","status":"published","version":4,"updatedAt":"2026-10-18T14:39:25.232Z","locked":false,"publicFairValue":false,"fairValue":null,"moat":{"verdict":"uncertain","summary":"Solventum has established intellectual property, brands and growing product adoption, but the supplied passages do not establish durable protection against substitution or customer switching. Stronger 2026 organic growth supports commercial execution, without proving a moat. Historical price increases demonstrate some pricing ability, while reimbursement constraints, purchasing pressure and mixed profitability limit confidence in durable pricing power. This is insufficient evidence of a moat, rather than demonstrated absence of one.","advantages":[{"mechanism":"intangible_assets","claim":"The disclosed patent portfolio and established brands are current assets; their ability to sustain an economic advantage remains unproven. Product adoption and organic growth support commercial relevance but do not establish patent effectiveness or brand-driven pricing premiums.","durability":"Unestablished: the passages provide no material patent expiration schedule, demonstrated exclusion of substitutes or sustained brand premium.","risks":"License field restrictions constrain exploitation of intellectual property and may permit competition from 3M. Losing inherited brand recognition and technological substitution could erode differentiation.","invalidation":"The potential advantage would be undermined by material products losing demand to substitutes, ineffective patent enforcement, or sustained price concessions alongside declining product volumes. Evidence of protected product economics and sustained customer preference would strengthen it.","competitors":["3M"],"evidenceIds":["e1","e2","e3"],"counterEvidenceIds":["e4","e5","e6"]},{"mechanism":"switching_costs","claim":"Existing-customer upgrades, expanded software adoption and medical equipment used with consumables suggest possible customer embeddedness. The passages do not demonstrate costly migration, exclusive consumable compatibility or contractual customer dependency.","durability":"Potential only: adoption across reporting periods supports ongoing demand, but switching friction and renewal economics are undisclosed.","risks":"Hospital budget constraints can delay software investment. Adoption growth may reflect new sales rather than retention, and emerging technology could weaken existing products.","invalidation":"The hypothesis would fail if customers routinely replace the software or equipment with little disruption, or existing-customer demand contracts despite continued market demand. Demonstrated migration costs and sustained renewals would support it.","competitors":[],"evidenceIds":["e7","e8","e9","e3"],"counterEvidenceIds":["e10","e6"]}],"evidence":[{"id":"e1","sourceId":"filing-3","location":"Solventum at a glance; patents, customers and business highlights","excerpt":"70+ year history of innovation 20,000+ employees 6,700+ patents issued 100,000+ customers and channel partners globally in 90+ countries Business segments at a glance Total company sales1 2025 highlights MedSurg Provides advanced wound care, infection prevention and surgical solutions intended to accelerate healing, prevent complications and lower the total cost of care globally 58% •Specialized commercial organization delivering results •Negative pressure wound therapy growth •Strong brand equity and momentum from recent product launches in infection prevention & surgical solutions Dental Solutions Offers the most comprehensive dental solutions for patients to enjoy healthy, beautiful smiles through game-changing innovation 16% •Strong existing brands •Recent product launches and sales channel specialization •Service level and backorder improvements Health Information Systems Delivers innovative software solutions and services, designed to eliminate revenue cycle waste, create more time for patient care and support the shift to value-based care 16% •Strong growth in revenue cycle management •Continued adoption and international expansion of 360 EncompassTM •Progress in autonomous coding with customers and partners Purification & Filtration (P&F) Filters and membranes for use in the manufacturing of biopharmaceutical and medical technologies, microelectronics and food and beverage products •Announced the sale of the Purification & Filtration business to Thermo Fisher Scientific on Feb."},{"id":"e2","sourceId":"filing-1","location":"MD&A; Dental Solutions 2025 operating results","excerpt":"Dental Solutions (16.2% of consolidated sales for the year ended December 31, 2025) Year ended December 31, (Millions) 2025 2024 2023 Net sales $ 1,349 $ 1,295 $ 1,329 Increase/(decrease) Organic growth 3.3 % (0.4) % Other (0.2) (1.5) Constant currency 3.1 (2.0) Currency impact 1.1 (0.7) Reported growth 4.2 % (2.6) % Business segment operating income $ 346 $ 350 $ 442 Percent change (1.1) % (20.8) % Percent of sales 25.6 % 27.0 % 33.3 % Year 2025 results: Sales in Dental Solutions were up 4.2%: •Organic growth was primarily driven by new product volume growth in restorative and prevention solutions, partially offset by a decline in traditional orthodontic products."},{"id":"e3","sourceId":"filing-2","location":"MD&A; second-quarter and first-half 2026 segment sales and operating income","excerpt":"Segment and Total Company Net Sales Three months ended June 30, Increase/(Decrease) (Millions) 2026 2025 Reported Growth Currency Impact Constant Currency Other Organic Growth Segment Sales Advanced Wound Care $ 537 $ 467 14.9 % 1.0 % 13.9 % 6.8 % 7.1 % Infection Prevention and Surgical Solutions 836 750 11.3 1.2 10.1 — 10.1 MedSurg 1,372 1,218 12.7 1.1 11.6 2.7 8.9 Dental Solutions 396 338 17.0 1.8 15.2 — 15.2 Health Information Systems 354 339 4.4 0.2 4.2 (1.2) 5.4 Purification and Filtration — 189 NM NM NM NM NM All Other 87 77 11.8 1.2 10.6 — 10.6 Total Company $ 2,209 $ 2,161 2.2 % 1.0 % 1.2 % (8.3) % 9.5 % Six months ended June 30, Increase/(Decrease) (Dollars in millions) 2026 2025 Reported Growth Currency Impact Constant Currency Other Organic Growth Segment Sales Advanced Wound Care $ 1,034 $ 915 12.9 % 1.7 % 11.2 % 6.6 % 4.6 % Infection Prevention and Surgical Solutions 1,573 1,460 7.7 2.2 5.5 — 5.5 MedSurg 2,607 2,375 9.7 2.0 7.7 2.6 5.1 Dental Solutions 750 667 12.5 3.1 9.4 — 9.4 Health Information Systems 696 667 4.3 0.5 3.8 (1.3) 5.1 Purification and Filtration — 369 NM NM NM NM NM All Other 163 153 6.4 1.7 4.7 — 4.7 Total Company $ 4,216 $ 4,231 (0.4) % 1.8 % (2.2) % (8.0) % 5.8 % 28 Table of Contents Segment and Total Company Operating Income Three months ended June 30, (Millions) 2026 2025 2026 vs 2025 change Segment Operating Income MedSurg $ 355 $ 210 68.7 % Dental Solutions 131 96 35.7 Health Information Systems 145 120 20.9 Purification and Filtration — 43 NM All Other 19 8 131.4 Corporate and Unallocated (469) (263) (77.5) Total Company $ 181 $ 214 (15.8) % Six months ended June 30, (Dollars in millions) 2026 2025 2026 vs 2025 change Segment Operating Income MedSurg $ 516 $ 416 23.9 % Dental Solutions 218 175 24.5 Health Information Systems 276 229 20.4 Purification and Filtration — 70 NM All Other 30 19 55.4 Corporate and Unallocated (778) (543) (43.0) Total Company $ 262 $ 367 (28.6) % 29 Table of Contents Net Sales by Geographic Area While the Company manages its businesses globally and believes its business segment results are the most relevant measure of performance, the Company also utilizes geographic area data as a secondary performance measure."},{"id":"e4","sourceId":"filing-1","location":"Risk factors; intellectual property license restrictions and potential 3M competition","excerpt":"•The 3M Agreements may limit Solventum’s ability to fully exploit certain intellectual property due to certain field of use restrictions on the licenses granted between the parties, which may permit 3M to compete with Solventum using intellectual property owned by or licensed to Solventum."},{"id":"e5","sourceId":"filing-1","location":"Risk factors; inherited brand recognition and brand loyalty","excerpt":"However, these efforts may not be successful, and the loss of benefits conferred by 3M’s brand recognition and reputation or the failure to maintain the value of our brands could impact our relationships or brand loyalty with employees, consumers, customers and third-party partners and otherwise adversely affect our business, results of operations or financial condition."},{"id":"e6","sourceId":"filing-1","location":"Risk factors; technological adaptation and competing products","excerpt":"In addition, any failure to successfully deploy or use such technologies in Solventum’s products and services, or to adapt to medical technology industry trends and developments related to such technologies in a timely manner (or at all), particularly as competitors incorporate such technologies into new and existing products and services, could adversely affect customer demand for Solventum’s products and its competitiveness."},{"id":"e7","sourceId":"filing-4","location":"Segment operating discussion; new customers and existing-customer upgrades","excerpt":"Growth was driven by both new customers and product upgrades at existing customers."},{"id":"e8","sourceId":"filing-1","location":"MD&A; Health Information Systems adoption and 2025 results","excerpt":"Health Information Systems (16.3% of consolidated sales for year ended December 31, 2025) Year ended December 31, (Millions) 2025 2024 2023 Net sales $ 1,360 $ 1,306 $ 1,285 Increase/(decrease) Organic growth 4.0 % 1.6 % Other — — Constant currency 3.9 1.6 Currency impact 0.2 — Reported growth 4.1 % 1.6 % Business segment operating income $ 496 $ 431 $ 423 Percent change 15.0 % 1.9 % Percent of sales 36.5 % 33.0 % 32.9 % Year 2025 results: Sales in Health Information Systems were up 4.1%: •Positive organic growth was driven by expanded adoption of our Solventum™ 360 EncompassTM and performance management solutions."},{"id":"e9","sourceId":"filing-1","location":"Accounting policies; rental equipment used with medical consumables","excerpt":"Equipment held for use: Equipment held for use includes medical equipment in rental arrangements utilized primarily by hospitals and other medical clinics in conjunction with other medical consumables."},{"id":"e10","sourceId":"filing-4","location":"Segment operating discussion; delayed customer IT investment","excerpt":"•Sales growth was negatively impacted by delays to customers’ investments in IT, which were driven by ongoing stress on hospital budgets."},{"id":"e11","sourceId":"filing-1","location":"MD&A; Dental Solutions 2024 volume declines and prior price actions","excerpt":"49 Table of Contents Year 2024 results: Sales in Dental Solutions were down (2.6%): •Volume declines associated with softening end-market demand were partially offset by the favorable impact of prior year price actions."},{"id":"e12","sourceId":"filing-4","location":"Segment operating discussion; price increases, spending and wage inflation","excerpt":"Business segment operating income margin increased when compared to the same period last year driven by both price increases and lower spending, partially offset by wage inflation."},{"id":"e13","sourceId":"filing-1","location":"Risk factors; increased healthcare pricing pressure","excerpt":"Pricing pressure has also increased due to continued consolidation among healthcare providers, trends towards managed care, the shift towards governments becoming the primary payers of healthcare expenses, reduction in reimbursement levels and medical procedure volumes and government laws and regulations relating to sales and promotion, reimbursement and pricing generally."},{"id":"e14","sourceId":"filing-1","location":"Risk factors; reimbursement policies and customer willingness to pay","excerpt":"The coverage policies and reimbursement levels of third-party payers, which can vary among public and private sources and by country, may affect which products customers purchase and the prices they are willing to pay for those products in a particular jurisdiction."},{"id":"e15","sourceId":"filing-1","location":"Government contracting; termination rights","excerpt":"federal government, can terminate contracts for their convenience or for Solventum’s default."},{"id":"e16","sourceId":"filing-1","location":"MD&A; Dental Solutions 2025 margin decline and cost drivers","excerpt":"Business segment operating income margin decreased when compared to the same period last year as a result of higher logistics costs, tariffs and other costs to operate our standalone structure after Spin-Off."},{"id":"e17","sourceId":"filing-2","location":"Unaudited consolidated income statements; first-half 2026 results","excerpt":"Financial Information Item 1. Financial Statements Solventum Corporation Condensed Consolidated Statements of Income (Unaudited) Three months ended June 30, Six months ended June 30, (Millions, except per share data) 2026 2025 2026 2025 Net sales of product $ 1,698 $ 1,668 $ 3,211 $ 3,265 Net sales of software and rentals 511 493 1,005 966 Total net sales 2,209 2,161 4,216 4,231 Cost of product 807 865 1,603 1,700 Cost of software and rentals 116 121 231 242 Gross profit 1,286 1,175 2,382 2,289 Selling, general and administrative expenses 927 772 1,754 1,541 Research and development expenses 178 189 367 381 Operating income 181 214 262 367 Interest expense, net 64 103 125 207 Other expense (income), net 9 8 13 19 Income before income taxes 108 103 123 141 Provision for (benefit from) income taxes 15 13 19 (86) Net income $ 92 $ 90 $ 105 $ 227 Earnings per share: Basic earnings per share $ 0.53 $ 0.52 $ 0.60 $ 1.31 Diluted earnings per share 0.53 0.51 0.60 1.30 Weighted-average number of shares outstanding: Basic 172.7 174.1 173.5 173.9 Diluted 173.3 175.2 174.4 175.0 The accompanying notes are an integral part of these condensed consolidated financial statements."},{"id":"e18","sourceId":"filing-2","location":"Unaudited cash flow statements; capital spending, repurchases and financing","excerpt":"6 Table of Contents Solventum Corporation Condensed Consolidated Statements of Cash Flows (Unaudited) Six months ended June 30, (Millions) 2026 2025 Cash Flows from Operating Activities Net income $ 105 $ 227 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation and amortization 268 251 Pension and postretirement benefits 27 32 Stock-based compensation expense 89 83 Deferred income taxes (88) (177) Changes in assets and liabilities Accounts receivable (286) (15) Due from related parties 27 4 Inventories 18 (77) Accounts payable 26 23 Due to related parties (117) (6) Accrued compensation (101) (47) All other operating activities — net 68 (100) Net cash provided by operating activities 38 198 Cash Flows from Investing Activities Purchases of property, plant and equipment (167) (219) Other — net 3 (5) Net cash used in investing activities (164) (224) Cash Flows from Financing Activities Repayment of debt — (200) Proceeds from debt, net of issuance costs 46 — Net transfers from (to) 3M 2 (30) Purchases of treasury stock (355) — Other — net (44) (19) Net cash used in financing activities (350) (249) Effect of exchange rate changes on cash and cash equivalents 1 7 Net increase (decrease) in cash and cash equivalents (475) (268) Cash and cash equivalents at beginning of period 878 762 Less: cash and cash equivalents held for sale — (2) Cash and cash equivalents at end of period $ 403 $ 492 Supplemental Cash Flow Information Non-cash investing and financing activity: Right-of-use assets obtained in exchange for finance lease liability $ 204 $ — The accompanying notes are an integral part of these condensed consolidated financial statements."},{"id":"e19","sourceId":"filing-3","location":"Compensation discussion; completed divestiture, debt reduction and separation milestones","excerpt":"Key accomplishments included: •Completing the divestiture of the Purification & Filtration business, enabling the Company to reduce debt by approximately $2 billion, strengthening its balance sheet allowing for stronger financial flexibility in the future; •Successful acquisition of Acera Surgical, expanding the Company’s advanced wound care portfolio with a business that is expected to be EPS accretive in 2027; 2026 Proxy statement 49 Compensation discussion and analysis •Successfully completed our first restructuring and enhancing the commercial teams to drive growth and innovation and launched five-year transformation and restructuring program to invest into the future, strengthen operating performance and fuel innovation for profitable growth; •Successfully executing on critical separation activities, including the ongoing ERP cutover and move to Solventum-owned distribution centers and manufacturing sites; •Building an experienced management team with strong MedTech experience and strong transformation experience, introducing significant new talent across the organization without creating disruption to the business or performance; and •Inspiring excellence and innovation through ongoing dedicated engagement with employees."},{"id":"e20","sourceId":"filing-3","location":"Non-GAAP reconciliation; 2025 cash flow and compensation adjustments","excerpt":"($ in millions) Fiscal year 2025 Major GAAP Cash Flow Categories Net cash provided by operating activities $ 369 Net cash provided by (used in) investing activities 2,797 Net cash used in financing activities (3,057) Free cash flow (non-GAAP) Net cash provided by operating activities 369 Purchases of property, plant and equipment (379) Free cash flow (non-GAAP) (10) Adjustments for compensation purposes1 540 Free cash flow (non-GAAP) 530 (1)Adjustments made by the Talent Committee for compensation purposes include impacts from the sale of the Company’s Purification and Filtration business, the Company’s separation from 3M, tariff-related impacts, and the Company’s acquisition of Acera Surgical."},{"id":"e21","sourceId":"filing-3","location":"Compensation discussion; 2025 annual and long-term incentive metrics","excerpt":"CEO target pay mix 92% At-Risk Average of other NEOs target pay mix 81% At-Risk Base Salary Annual Incentive Pay Performance Share Awards Restricted Stock Units Numbers in charts are rounded to the nearest whole number 2025 Pay elements Base salary Annual Incentive Plan (AIP) Long-term equity awards Benefits & other perquisites Benchmarked and set to reward for skills, experience, performance, responsibility, and leadership 100% Performance based: 50% Constant Currency Revenue 30% Adjusted Operating Income 20% Free Cash Flow Individual Goals Modifier 50% Performance Share Units: 50% 3-year Constant Currency Cumulative Revenue Growth 30% 3-year Cumulative Adjusted EPS 20% 3-year rTSR 50% Restricted Stock Units: 3-year vesting period Benchmarked to market practice to help attract, retain and reward talent 44 Compensation discussion and analysis 2025 Performance summary Fiscal year 2025 marked Solventum’s first full year as a public company and a period of meaningful progress."},{"id":"e22","sourceId":"filing-3","location":"Compensation discussion; actual 2025 equity award mix","excerpt":"50 Compensation discussion and analysis In 2025, these awards were equally split between PSUs and time-vesting RSUs (“annual PSUs” and “annual RSUs”)."},{"id":"e23","sourceId":"filing-3","location":"Compensation discussion; earned 2025 annual incentive payouts","excerpt":"Executive 2025 Base salary ($)1 AIP target (% Base salary)2 Business performance factor Individual performance multiplier Final AIP payout ($) Bryan Hanson 1,350,000 150 1.23 1.20 2,988,900 Wayde McMillan 776,316 98 1.23 1.20 1,118,221 Heather Knight3 113,973 100 1.23 1.00 140,186 Marcela Kirberger 728,724 75 1.23 1.15 773,085 Amy Landucci 684,945 90 1.23 1.15 871,969 Chris Barry4 996,849 100 1.23 1.00 1,226,125 (1)Amounts shown represent adjusted annual base salary rate for the year reflecting any merit-based adjustments or pro-ration for partial year worked, as applicable (2)The AIP Target amount for Mr."},{"id":"e24","sourceId":"filing-3","location":"Proxy summary; governance practices and shareholder accountability","excerpt":"page 12 Governance highlights Board practices •Independent Board Chair and Board Committees •Independent directors meet regularly without management present •Annual Board and committee self-assessment •Regular review of the company’s risk profile (including cybersecurity, IT, artificial intelligence, geopolitical, human capital management and sustainability) •Other board service limited to four public companies (limit of two for public company CEOs) •Non-employee director retirement at age of 75 Shareholder accountability •Majority vote standard for uncontested director elections •Annual director elections beginning in 2028 •Annual say-on-pay vote •Active shareholder outreach and engagement Other governance practices •Stock ownership guidelines for Section 16 officers and directors •Anti-pledging, anti-hedging, and anti-short selling policies Director skills 10/12 10/12 9/12 11/12 12/12 Healthcare Industry Executive Leadership Financial Acumen & Experience International & Global Operations Strategy & M&A 9/12 7/12 6/12 10/12 9/12 Science, Technology, Research & Innovation Quality, Regulatory & Compliance Corporate Sales, Marketing & Brand Management Risk Management Human Capital Management 8 Proxy statement summary Board at a glance Class II Directors with terms expiring at the 2026 annual meeting Carlos Albán Former Vice Chairman, Chief Commercial Officer, Abbvie Inc."},{"id":"e25","sourceId":"filing-3","location":"Corporate governance; director independence determination","excerpt":"Our Board has determined that a majority of the directors of Solventum, including all of our directors other than our CEO, are independent under the Director Independence Guidelines and the NYSE listing standards for independence."},{"id":"e26","sourceId":"filing-1","location":"Anti-takeover provisions; classified board through 2028","excerpt":"•until the annual stockholder meeting in 2028, Solventum’s Board of Directors will be divided into classes, which could have the effect of making the replacement of incumbent directors more time consuming and difficult;"},{"id":"e27","sourceId":"filing-2","location":"Related parties; transition agreement expenses","excerpt":"•Transition agreement expenses for the three and six months ended June 30, 2026 were $97 million and $201 million, respectively, and for both the three and six months ended June 30, 2025 were $135 million and $272 million, respectively, and are related to services received under transition agreements between the Company and 3M and its affiliates."},{"id":"e28","sourceId":"filing-2","location":"Restructuring; substantial completion of Solventum Way actions","excerpt":"The actions under the Solventum Way restructuring program are substantially complete."}],"changes":["Retains the previous uncertain verdict: stronger operating results still do not establish structural protection or durable customer dependency.","Adds first-half 2026 organic growth and profitability evidence, existing-customer upgrades and historical realized price increases.","Adds actual compensation arrangements, earned payouts, governance provisions and capital allocation outcomes; these permit management assessments despite unresolved moat evidence."],"limitations":["All supplied sources are issuer filings. Operating results and disclosed contractual arrangements support assessments, while promotional statements about brands and market positions are not independent demonstrations of advantage.","3M is explicitly identified as a potential competitor through intellectual property arrangements. Broader named competitor coverage is absent; companies mentioned as transaction counterparties or in director biographies are not established competitors.","Patent scope, expiration dates, substitution outcomes, migration costs, renewal rates and customer concentration are not supplied. Customer scale alone establishes neither network effects nor efficient scale.","Pricing disclosures establish historical increases but provide no current company-wide price-volume bridge or detailed repricing rights. Government termination rights cover only part of the customer base.","Compensation design and actual awards are disclosed, but executive ownership quantities and ownership-guideline compliance are not supplied. Acquisition returns and long-term transformation outcomes remain unproven.","Source dates are filing dates: filing-4 February 28, 2025; filing-1 February 27, 2026; filing-3 March 27, 2026; filing-5 May 5, 2026; filing-2 August 5, 2026. Interim results are unaudited, and pre-spin-off comparisons have structural limitations."],"qualityAssessments":[{"category":"moat","checks":[{"criterion":"structural_advantage","grade":null,"rationale":"Patents, brands and adoption establish commercial assets, but their effectiveness in preventing substitution is unestablished. The uncertain moat verdict requires an ungraded assessment.","evidenceIds":["e1","e4","e8"]},{"criterion":"durability","grade":null,"rationale":"No supplied patent-life, renewal or competitive displacement evidence establishes the duration of an advantage.","evidenceIds":["e1","e4","e6"]},{"criterion":"customer_dependency","grade":null,"rationale":"Upgrades and equipment-consumable use suggest embeddedness without demonstrating dependency or costly switching.","evidenceIds":["e7","e9"]},{"criterion":"erosion_resilience","grade":null,"rationale":"Organic growth supports current demand, but does not establish resilience of an identifiable structural advantage against competing technology and purchasing pressure.","evidenceIds":["e3","e6","e13"]}]},{"category":"pricing_power","checks":[{"criterion":"realized_pricing","grade":2,"rationale":"Prior Dental price actions supported 2024 sales, and another operating passage attributes margin improvement partly to price increases. These are realized outcomes, but volume weakness and disclosed increasing pricing pressure make the evidence mixed; current company-wide pricing is not isolated.","evidenceIds":["e11","e12","e13"]},{"criterion":"retention","grade":2,"rationale":"Existing-customer upgrades, expanded software adoption and subsequent organic growth provide indirect evidence of continuing demand. They do not separate retained customers from new wins or establish renewal rates; customer IT spending delays provide a counterweight.","evidenceIds":["e7","e8","e3","e10"]},{"criterion":"margin_resilience","grade":2,"rationale":"2026 gross profit and continuing segment operating income improved, following Dental margin compression from logistics, tariffs and standalone costs. Consolidated operating income fell as expenses increased. Resilience is mixed, and the improvement cannot be attributed solely to pricing.","evidenceIds":["e16","e17","e3"]},{"criterion":"contractual_freedom","grade":1,"rationale":"Disclosed government customer termination rights weaken contractual protection, while reimbursement policies constrain what customers will pay. This supports a limited, fragile assessment; general commercial repricing rights and the proportion of sales subject to these constraints are undisclosed.","evidenceIds":["e14","e15","e13"]}]},{"category":"strong_management","checks":[{"criterion":"capital_discipline","grade":2,"rationale":"Completed divestiture and approximately $2 billion of debt reduction support discipline. However, reported 2025 operating cash flow did not cover capital spending, and first-half 2026 repurchases of $355 million accompanied $38 million of operating cash flow and $167 million of capital spending. These mixed outcomes do not establish value creation from repurchases or the acquisition.","evidenceIds":["e19","e20","e18"]},{"criterion":"incentive_alignment","grade":2,"rationale":"Actual 2025 awards combine three-year performance and time-vesting equity, with cash flow and relative shareholder return among incentive measures. Earned bonuses demonstrate implementation, rather than a proposal. Large compensation-specific cash flow adjustments and individual payout modifiers weaken the connection to reported outcomes; actual executive ownership is missing.","evidenceIds":["e21","e22","e23","e20","e24"]},{"criterion":"execution","grade":2,"rationale":"Broad 2026 organic growth, improved continuing segment income, lower transition agreement expenses and substantially completed restructuring demonstrate progress. Consolidated operating income and operating cash flow declined, leaving the overall record mixed. Commercial execution is assessed from operating results, not attributed entirely to management actions.","evidenceIds":["e3","e27","e28","e17","e18"]},{"criterion":"governance","grade":2,"rationale":"An independent chair and committees, all directors other than the CEO determined independent, majority voting and disclosed ownership and trading policies support oversight. The classified board remains a current accountability constraint through 2028. Disclosed policies establish governance arrangements, without proving exceptional oversight effectiveness.","evidenceIds":["e24","e25","e26"]}]}],"financialAssessments":[],"qualityPolicy":"quality-scores-2","sourcePolicy":"issuer-evidence-4","basisHash":"01aac283aeb92d796bbc72f49ea8811e2661f926f8fbcca206cbb062a1553a83","updatedAt":"2026-10-18T14:39:25.232Z","sources":[{"id":"filing-1","url":"https://www.sec.gov/Archives/edgar/data/1964738/000196473826000007/solv-20251231.htm","publishedAt":"2026-02-27","sha256":"e7c64bbb147948018c17e8dcf48f8853f3208d2d75d7b2b5635b0b21732a4193","dateKind":"filed"},{"id":"filing-2","url":"https://www.sec.gov/Archives/edgar/data/1964738/000196473826000047/solv-20260630.htm","publishedAt":"2026-08-05","sha256":"8f178999200acc2a0d0e1502ee153e4cbf197a3f2c10a3893357e7af35fe719d","dateKind":"filed"},{"id":"filing-3","url":"https://www.sec.gov/Archives/edgar/data/1964738/000196473826000017/solv-20260327.htm","publishedAt":"2026-03-27","sha256":"f1394d8b872b6212cc33025962106e4463abe4f9ec59ea5818365f222361e241","dateKind":"filed"},{"id":"filing-4","url":"https://www.sec.gov/Archives/edgar/data/1964738/000196473825000019/solv-20241231.htm","publishedAt":"2025-02-28","sha256":"3314640a0b4241b3a1c864bc677129c1632ca8d6469a56159f1030c14a6538f4","dateKind":"filed"},{"id":"filing-5","url":"https://www.sec.gov/Archives/edgar/data/1964738/000196473826000024/solv-20260331.htm","publishedAt":"2026-05-05","sha256":"04fe666e570fc21eee06f511de9e8176254132cec9bf5b2ac4f66a08c917258e","dateKind":"filed"}],"model":"gpt-6.1-sol","providerId":"codex:70da8b33e55400c9c44720062654da31a769b9d42c36c32945a00d3ff5edbf5b","usage":{"input_tokens":72911,"cached_input_tokens":21120,"cache_write_input_tokens":0,"output_tokens":3562,"reasoning_output_tokens":78},"basisSupplement":{"previousHash":"c1c300810b257a75991e2eee4b2731bf5dd0e7b22ed745edee30b8ccd2d38c16","checkedAt":"2026-10-18T16:49:32.080Z","rule":"dated historical and missing inputs only; accepted observations and research date retained"}},"signals":[{"period":"2024","end":"2024-12-31","values":{"gross_margin":55.645747516355705,"operating_margin":12.551490186576206,"roic":null,"fcf_margin":9.752847104434213,"sbc_revenue":1.3569178580082384},"issues":{"peg":"The matching period one year earlier is unavailable.","pfcf_growth":"The matching period one year earlier is unavailable.","software_capex":"Separately disclosed software and intangible investment is unavailable in the extracted statements for this period.","roic":"The matching period one year earlier is unavailable.","roce":"The matching period one year earlier is unavailable.","roiic":"The matching period one year earlier is unavailable.","roe":"The matching period one year earlier is unavailable.","roa":"The matching period one year earlier is unavailable.","roic_wacc":"Enter a WACC assumption from 0 to 100%.","interest_coverage":"The reported inputs required for this metric are unavailable in the extracted statements for this period.","dilution":"The matching period one year earlier is unavailable.","buybacks":"The reported inputs required for this metric are unavailable in the extracted statements for this period."}},{"period":"2025","end":"2025-12-31","values":{"gross_margin":53.46546546546547,"operating_margin":26.1981981981982,"roic":20.41010487943741,"fcf_margin":-0.12012012012012012,"sbc_revenue":1.9339339339339339},"issues":{"pfcf":"Trailing free cash flow is zero or negative, so this ratio is undefined.","pfcf_growth":"TTM FCF per diluted share growth is zero or negative; a growth-adjusted multiple requires positive growth.","software_capex":"Separately disclosed software and intangible investment is unavailable in the extracted statements for this period.","sbc_fcf":"Free cash flow before SBC deduction is zero or negative, so this ratio is undefined.","roiic":"Invested capital did not increase versus the prior year. 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