ITT Inc. 2025 Annual Report (Form 10-K) Summary
Business Context and Reporting Period
This filing covers the fiscal year ended December 31, 2025. ITT Inc. is a diversified manufacturer of highly engineered critical components and customized technology solutions for transportation, industrial, and energy markets. The company operates through three segments: Motion Technologies (MT), Industrial Process (IP), and Connect & Control Technologies (CCT). In 2025, ITT generated approximately $3.9 billion in sales across 125 countries with approximately 11,600 employees. A significant strategic development was the announcement of a definitive agreement to acquire SPX FLOW, Inc. for approximately $4.775 billion, expected to close in Q1 2026.
Key Financial Metrics
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Revenue | $3,938.5 million | $3,630.7 million | +8.5% |
| Organic Revenue Growth | $3,712.4 million | $3,541.5 million | +4.8% |
| Operating Income | $684.5 million | $678.1 million | +0.9% |
| Adjusted Operating Income | $717.1 million | $644.8 million | +11.2% |
| Net Income (Attributable to ITT) | $488.0 million | $519.9 million | -6.1% |
| Diluted EPS | $6.11 | $6.32 | -3.3% |
| Adjusted Diluted EPS | $6.72 | $5.88 | +14.3% |
| Operating Margin | 17.4% | 18.7% | -130 bps |
| Adjusted Operating Margin | 18.2% | 17.8% | +40 bps |
| Free Cash Flow (Operating) | $668.8 million | $562.6 million | +18.9% |
| Total Debt | $782.8 million | $660.2 million | N/A |
| Cash and Equivalents | $1,742.9 million | $439.3 million | +297% |
Note: The increase in cash and equivalents is primarily due to a $1.314 billion equity offering in December 2025 to fund the pending SPX FLOW acquisition.
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 8.5%, driven by growth in all three segments. IP grew 9.9% (driven by pump projects), CCT grew 23.3% (driven by aerospace/defense strength and the kSARIA acquisition), and MT declined 1.4% (impacted by the prior-year Wolverine divestiture).
- Profitability: GAAP Operating Income was flat (+0.9%) due to the absence of a $47.8 million gain on the sale of the Wolverine business in 2024. However, Adjusted Operating Income grew 11.2%, reflecting core operational strength.
- EPS Decline: GAAP EPS decreased 3.3% primarily due to the prior-year Wolverine gain, a higher effective tax rate (24.6% vs. 19.4%), and increased interest expense. Adjusted EPS grew 14.3%.
- Accounting Change: Effective January 1, 2025, the company changed its inventory accounting method from LIFO to FIFO, resulting in a cumulative adjustment to retained earnings.
- Capital Deployment: The company repurchased $525.0 million of common stock and paid $111.0 million in dividends. Capital expenditures were $121.3 million.
Guidance, Outlook, and Risks
Outlook and Strategy: Management expects demand to remain firm in 2026 but with variation across industrial end markets. The company is reshaping its portfolio toward attractive pump applications and defense/aerospace interconnects while reducing automotive exposure. The pending acquisition of SPX FLOW is expected to add approximately $80 million in annualized cost synergies by the end of the third year post-closing and double-digit adjusted EPS accretion in the first full year.
Key Risks and Contingencies:
- SPX FLOW Acquisition: Risks include failure to obtain regulatory approvals, integration challenges, and the inability to realize anticipated synergies. Financing involves a $2.875 billion term loan facility, which will significantly increase indebtedness.
- Macroeconomic Conditions: Exposure to geopolitical tensions, inflation, supply chain disruptions, and fluctuating raw material prices (steel, copper, etc.).
- Customer Concentration: Sales to Aumovio SE (formerly part of Continental AG) represented approximately 6% of total revenue in 2025.
- Taxation: The effective tax rate increased due to jurisdictional mix of earnings and U.S. tax on foreign earnings. The company is monitoring the impact of global minimum tax (Pillar Two) and U.S. corporate alternative minimum tax.
- Cybersecurity: Risks related to IT system failures, data breaches, and the integration of AI technologies.
Investor Verification Checklist
- SPX FLOW Closing: Verify the status of regulatory approvals and the expected closing date (Q1 2026) for the $4.775 billion acquisition.
- Debt Capacity: Review the terms of the new $2.875 billion term loan facility and the impact on leverage ratios post-acquisition.
- Organic Growth Quality: Assess the sustainability of the 4.8% organic revenue growth, particularly in the IP and CCT segments, excluding the impact of the Wolverine divestiture.
- Tax Rate Volatility: Monitor the effective tax rate, which rose to 24.6% in 2025, and the impact of foreign earnings repatriation and global minimum tax rules.
- Customer Concentration: Track the relationship with Aumovio SE, which accounts for a significant portion of MT revenue.
- Environmental Liabilities: Review the $56.1 million recorded environmental liability and the potential high-end estimate of $97.3 million.