Revenue of $4.1 billion, an increase of 4.1%
Operating margin of 26.5%, as enterprise initiatives contributed 140 bps
GAAP EPS of $2.72, an increase of 7%
2025 Highlights
Revenue of $16 billion, an increase of 0.9%
Customer-Back Innovation contributed 2.4% to revenue growth, an increase of 40 bps
Operating margin of 26.3%, as enterprise initiatives contributed 130 bps
GAAP EPS of $10.49 exceeded the prior guidance mid-point of $10.45
2026 Guidance
Revenue growth of 2 to 4%, organic growth of 1 to 3%
Operating margin expansion of approximately 100 bps with enterprise initiatives contributing 100 bps
GAAP EPS of $11.00 to $11.40, an increase of 7% at the mid-point
GLENVIEW, Ill., Feb. 03, 2026 (GLOBE NEWSWIRE) -- Illinois Tool Works Inc. (NYSE:ITW) today reported its fourth quarter and full year 2025 results.
"ITW delivered a solid finish to the year, marked by more than four percent revenue growth and a seven percent increase in GAAP earnings per share. As a result of our disciplined execution across all seven segments, we expanded both operating margin and income to record levels in the quarter," said Christopher O'Herlihy, President and Chief Executive Officer.
"Our results over the past year demonstrate that ITW is well-positioned to deliver solid financial performance in any environment as we consistently exceeded market growth while improving profitability and margins. Notably, our Customer-Back Innovation initiatives were a primary catalyst, contributing 2.4 percent to revenue growth in 2025. Building on this momentum, we expect to continue outperforming our end markets in 2026 as we leverage ITW's unique business model to drive consistent, above-market organic growth with best-in-class margins and returns. I extend my sincere gratitude to our global colleagues for their unwavering dedication to serving our customers and executing our strategy with excellence," O'Herlihy concluded.
Fourth Quarter 2025 Results
Fourth quarter revenue of $4.1 billion increased by 4.1 percent and organic revenue growth was 1.3 percent. Foreign currency translation increased revenue by 2.5 percent and acquisitions added 0.3 percent.
GAAP EPS of $2.72 increased seven percent. Operating margin of 26.5 percent increased 30 basis points as enterprise initiatives contributed 140 basis points. Segment operating margin increased 120 basis points to 27.7 percent. Operating cash flow was $1 billion, and free cash flow was $0.9 billion with a conversion of 109 percent to net income. During the quarter, the company repurchased $375 million of its own shares and the effective tax rate was 22.8 percent.
Full Year 2025 Results
Full year revenue of $16 billion increased 0.9 percent as organic revenue was flat. Foreign currency translation increased revenue by 0.8 percent and acquisitions contributed 0.1 percent to revenues.
GAAP EPS of $10.49 exceeded the prior guidance mid-point of $10.45. Operating income was $4.2 billion and operating margin was 26.3 percent with enterprise initiatives contributing 130 basis points. Segment operating margin of 27.2 percent increased 70 basis points. Pricing and supply chain actions successfully offset the tariff impact for the year. Six of seven segments expanded operating margins with three segments achieving operating margins above 30 percent.
Operating cash flow was $3.1 billion and free cash flow was $2.7 billion, with a conversion of 88 percent to net income. The company invested approximately $0.8 billion to support the long-term growth of its highly profitable businesses and returned $3.3 billion to shareholders through dividends and share repurchases. The effective tax rate was 22.7 percent.
2026 Guidance
ITW is initiating 2026 guidance including GAAP EPS in the range of $11.00 to $11.40 per share, which represents seven percent earnings growth at the mid-point. The company projects revenue growth of two to four percent and organic growth of one to three percent based on current levels of demand and present foreign exchange rates.
Operating margin is projected to be in the range of 26.5 to 27.5 percent, an improvement of approximately 100 basis points with enterprise initiatives contributing 100 basis points.
All seven segments are expected to deliver positive organic growth and operating margin expansion in 2026.
Free cash flow is projected to be greater than 100 percent of net income, and the company plans to repurchase approximately $1.5 billion of its own shares. The projected effective tax rate is 23.5 to 24.5 percent.
Non-GAAP Measures
This earnings release contains certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measures is included in the attached supplemental reconciliation schedule. The estimated guidance of free cash flow to net income conversion rate is based on assumptions that are difficult to predict, and estimated guidance for the most directly comparable GAAP measure and a reconciliation of this forward-looking estimate to its most directly comparable GAAP estimate have been omitted due to the unreasonable efforts required in connection with such a reconciliation and the lack of reliable forward-looking cash flow information. For the same reasons, the company is unable to address the potential significance of the unavailable information, which could be material to future results.
Forward-Looking Statements
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements regarding the potential impact of tariffs, the Company's projected pricing actions, the impact of enterprise initiatives, future financial and operating performance, free cash flow and free cash flow to net income conversion rate, organic and total revenue, operating and incremental margin, price/cost impact, statements regarding diluted earnings per share, after-tax return on invested capital, effective tax rates, exchange rates, expected timing and amount of share repurchases, end market economic and regulatory conditions, and the Company's 2026 guidance. These statements are subject to certain risks, uncertainties, assumptions, and other factors, which could cause actual results to differ materially from those anticipated. Important risks that could cause actual results to differ materially from the Company's expectations include those that are detailed in ITW's Form 10-K for 2024 and subsequent reports filed with the SEC.
About Illinois Tool Works
ITW (NYSE:ITW) is a Fortune 300 global multi-industrial manufacturing leader with revenue of $16 billion in 2025. The company's seven industry-leading segments leverage the unique ITW Business Model to drive solid growth with best-in-class margins and returns in markets where highly innovative, customer-focused solutions are required. ITW's approximately 43,000 dedicated colleagues around the world thrive in the company's decentralized and entrepreneurial culture. www.itw.com.
ILLINOIS TOOL WORKS INC. and SUBSIDIARIESSTATEMENT OF INCOME (UNAUDITED)
Three Months EndedDecember 31,
Twelve Months EndedDecember 31,
In millions except per share amounts
2025
2024
2025
2024
Operating Revenue
$
4,093
$
3,932
$
16,044
$
15,898
Cost of revenue
2,284
2,221
8,969
8,858
Selling, administrative, and research and development expenses
704
655
2,779
2,675
Amortization and impairment of intangible assets
20
25
80
101
Operating Income
1,085
1,031
4,216
4,264
Interest expense
(75
)
(68
)
(292
)
(283
)
Other income (expense)
14
20
42
441
Income Before Taxes
1,024
983
3,966
4,422
Income taxes
234
233
900
934
Net Income
$
790
$
750
$
3,066
$
3,488
Net Income Per Share:
Basic
$
2.73
$
2.55
$
10.52
$
11.75
Diluted
$
2.72
$
2.54
$
10.49
$
11.71
Cash Dividends Per Share:
Paid
$
1.61
$
1.50
$
6.11
$
5.70
Declared
$
1.61
$
1.50
$
6.22
$
5.80
Shares of Common Stock Outstanding During the Period:
Average
289.5
294.7
291.5
296.8
Average assuming dilution
290.2
295.8
292.3
297.8
ILLINOIS TOOL WORKS INC. and SUBSIDIARIESSTATEMENT OF FINANCIAL POSITION (UNAUDITED)
In millions
December 31, 2025
December 31, 2024
Assets
Current Assets:
Cash and equivalents
$
851
$
948
Trade receivables
3,227
2,991
Inventories
1,659
1,605
Prepaid expenses and other current assets
463
312
Total current assets
6,200
5,856
Net plant and equipment
2,230
2,036
Goodwill
5,098
4,839
Intangible assets
591
592
Deferred income taxes
519
369
Other assets
1,510
1,375
$
16,148
$
15,067
Liabilities and Stockholders' Equity
Current Liabilities:
Short-term debt
$
2,286
$
1,555
Accounts payable
522
519
Accrued expenses
1,636
1,576
Cash dividends payable
465
441
Income taxes payable
217
217
Total current liabilities
5,126
4,308
Noncurrent Liabilities:
Long-term debt
6,683
6,308
Deferred income taxes
154
119
Other liabilities
959
1,015
Total noncurrent liabilities
7,796
7,442
Stockholders' Equity:
Common stock
6
6
Additional paid-in-capital
1,771
