Illinois Tool Works (ITW) Q4 2025 earnings summary

Executive summary

• Delivered strong Q4 2025 results with revenue up 4.1% and GAAP EPS up 7% to $2.72, outperforming end markets.

• Full-year 2025 revenue reached $16.0B, with GAAP EPS of $11.71 and operating margin at 26.3%.

• Customer-Back Innovation initiatives contributed 2.4% to annual revenue growth.

• All seven segments expanded operating margins, and free cash flow conversion to net income was 109% in Q4.

• Returned $3.3 billion to shareholders in 2025 through dividends and share repurchases.

Financial highlights

• Q4 organic growth was 1.3%, with foreign currency adding 2.5% and acquisitions 0.3%.

• Q4 operating income reached $1.1 billion, up 5% year-over-year; operating margin was 26.5%.

• Full-year 2025 GAAP EPS was $11.71, up 3% year-over-year; operating margin at 26.3%.

• After-tax ROIC for 2025 was 29.3%.

• Free cash flow conversion to net income was 109% in Q4 and consistently above 100%.

Outlook and guidance

• 2026 revenue guidance: $16.3–$16.6B (+2–4%), organic growth of 1–3%.

• 2026 GAAP EPS expected at $11.00–$11.40 (7% growth at midpoint); operating margin projected at 26.5–27.5%.

• After-tax ROIC expected to exceed 30% in 2026.

• Free cash flow conversion to net income expected to exceed 100%; $1.5 billion in share repurchases planned.

• All segments forecasted to deliver above-market organic growth and margin expansion in 2026.