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Jun 30
ITW Q2 2025 Earnings Report
ITW reported modest revenue growth and record Q2 EPS and operating margin performance.
Key Takeaways
Illinois Tool Works posted record Q2 EPS and operating income, with revenue up slightly year-over-year. Enterprise initiatives significantly contributed to margin expansion, and the company raised its full-year guidance.
GAAP EPS reached a Q2 record of $2.58.
Revenue was $4.1 billion, with flat organic growth.
Operating income was $1.068 billion with a 26.3% margin.
Free cash flow totaled $449 million, representing 59% of net income.
ITW
ITW
ITW Revenue by Segment
Revenue by Segment
Automotive OEM Revenue
CapyFin.comFood Equipment Revenue
CapyFin.comTest & Measurement and Electronics Revenue
CapyFin.comWelding Revenue
CapyFin.comPolymers & Fluids Revenue
CapyFin.comConstruction Products Revenue
CapyFin.comSpecialty Products Revenue
CapyFin.com Forward Guidance
ITW raised its full-year GAAP EPS guidance and expects modest revenue and margin expansion driven by enterprise initiatives.
Positive Outlook
- Raised full-year GAAP EPS guidance to $10.35–$10.55.
- Expecting 1%–3% revenue growth for full year.
- Operating margin expected between 26%–27%.
- Enterprise initiatives projected to contribute 100+ bps to margin.
- Free cash flow expected to exceed 100% of net income.
Challenges Ahead
- Flat to 2% projected organic growth indicates subdued market demand.
- Tariff cost impacts remain a factor, requiring pricing offsets.
- Foreign exchange headwinds could pressure revenue.
- Some business segments saw YoY declines (e.g., Construction Products).
- Free cash flow conversion was weaker than prior year.