ITW Reports Second Quarter 2025 Results
Revenue of $4.1 billion, an increase of 1% with flat organic growth
Operating margin of 26.3% as enterprise initiatives contributed 130 bps
GAAP EPS of $2.58, a new Q2 record
Raising full year 2025 GAAP EPS guidance by $0.10; narrowing the range to $10.35 to $10.55 per share
GLENVIEW, Ill., July 30, 2025 (GLOBE NEWSWIRE) -- Illinois Tool Works Inc. (NYSE:ITW) today reported its second quarter 2025 results and updated guidance for full year 2025.
"The ITW team outpaced underlying end market growth and delivered solid financial performance in the second quarter, achieving EPS of $2.58, operating income of $1.1 billion, and operating margin of 26.3 percent, all second-quarter records. Our results are a direct outcome of the strength of the ITW Business Model, the quality of our diversified and resilient portfolio, and the unwavering dedication of our global ITW colleagues to serving our customers and executing our strategy with excellence," said Christopher A. O'Herlihy, President and Chief Executive Officer.
"I am very encouraged by the meaningful strategic progress we made in the first half of the year, diligently executing our Next Phase growth priorities to make consistent above-market organic growth powered by Customer-Back Innovation a defining ITW strength. Looking ahead, we are raising our full year guidance, confident in our ability to successfully navigate an uncertain environment and deliver differentiated performance through 2025 and beyond."
Second Quarter 2025 ResultsSecond quarter revenue of $4.1 billion increased by one percent as organic growth was essentially flat. Foreign currency translation impact increased revenue by one percent.
GAAP EPS of $2.58 increased two percent. Operating margin expanded 10 basis points to 26.3 percent as enterprise initiatives contributed 130 basis points. Operating cash flow was $550 million, and free cash flow was $449 million with a conversion of 59 percent to net income. During the quarter, the company repurchased $375 million of its own shares, and the effective tax rate was 24.4 percent.
2025 GuidanceITW is raising its full year GAAP EPS guidance range of $10.15 to $10.55 per share by $0.10 or one percent at the midpoint to a narrower range of $10.35 to $10.55 per share. The company is projecting revenue growth of one to three percent and organic growth of flat to two percent based on current levels of demand adjusted for on-going pricing actions that are projected to offset tariff cost impacts and current foreign exchange rates. Operating margin is projected to be in the range of 26 to 27 percent as enterprise initiatives are expected to contribute 100 basis points or more. Free cash flow is expected to exceed 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 approximately 24 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 StatementsThis 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 2025 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 WorksITW (NYSE:ITW) is a Fortune 300 global multi-industrial manufacturing leader with revenue of $15.9 billion in 2024. 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 44,000 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 Ended
Six Months Ended
June 30,
June 30,
In millions except per share amounts
2025
2024
2025
2024
Operating Revenue
$
4,053
$
4,027
$
7,892
$
8,000
Cost of revenue
2,271
2,262
4,432
4,407
Selling, administrative, and research and development expenses
693
686
1,399
1,362
Amortization and impairment of intangible assets
21
25
42
50
Operating Income
1,068
1,054
2,019
2,181
Interest expense
(74
)
(75
)
(142
)
(146
)
Other income (expense)
4
26
16
42
Income Before Taxes
998
1,005
1,893
2,077
Income Taxes
243
246
438
499
Net Income
$
755
$
759
$
1,455
$
1,578
Net Income Per Share:
Basic
$
2.58
$
2.55
$
4.97
$
5.29
Diluted
$
2.58
$
2.54
$
4.95
$
5.27
Cash Dividends Per Share:
Paid
$
1.50
$
1.40
$
3.00
$
2.80
Declared
$
1.50
$
1.40
$
3.00
$
2.80
Shares of Common Stock Outstanding During the Period:
Average
292.3
297.6
292.9
298.3
Average assuming dilution
292.9
298.5
293.7
299.3
ILLINOIS TOOL WORKS INC. and SUBSIDIARIESSTATEMENT OF FINANCIAL POSITION (UNAUDITED)
In millions
June 30, 2025
December 31, 2024
Assets
Current Assets:
Cash and equivalents
$
788
$
948
Trade receivables
3,320
2,991
Inventories
1,710
1,605
Prepaid expenses and other current assets
416
312
Total current assets
6,234
5,856
Net plant and equipment
2,177
2,036
Goodwill
5,038
4,839
Intangible assets
558
592
Deferred income taxes
564
369
Other assets
1,477
1,375
$
16,048
$
15,067
Liabilities and Stockholders' Equity
Current Liabilities:
Short-term debt
$
1,242
$
1,555
Accounts payable
613
519
Accrued expenses
1,544
1,576
Cash dividends payable
437
441
Income taxes payable
96
217
Total current liabilities
3,932
4,308
Noncurrent Liabilities:
Long-term debt
7,695
6,308
Deferred income taxes
144
119
Other liabilities
1,066
1,015
Total noncurrent liabilities
8,905
7,442
Stockholders' Equity:
Common stock
6
6
Additional paid-in-capital
1,725
1,669
Retained earnings
29,471
28,893
