ITT Inc.

11/05/2026 | Press release | Distributed by Public on 11/05/2026 10:04

Quarterly Report for Quarter Ending October 3, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(In millions, except per share amounts, unless otherwise stated)
OVERVIEW
ITT Inc., through its worldwide subsidiaries, is a diversified manufacturer of highly engineered critical components and customized technology solutions for the transportation, industrial, energy, and health and nutrition markets. We manufacture components that are integral to the operation of systems and manufacturing processes in these key markets. Our products enable functionality for applications where reliability and performance are critically important to our customers and the users of their products.
Our businesses share a common, repeatable operating model centered on our engineering capabilities. Each business applies its technology and engineering expertise to solve our customers' most pressing challenges. Our applied engineering provides a valuable business relationship with our customers given the critical nature of their applications. This in turn provides us with unique insight to our customers' requirements and enables us to develop solutions to assist our customers in achieving their business goals. Our technology and customer intimacy produce opportunities to capture recurring revenue streams, aftermarket opportunities and long-lived platforms from original equipment manufacturers (OEMs).
Our product and service offerings are organized into three reportable segments: Flow Technologies (FT), Motion Technologies (MT), and Connect & Control Technologies (CCT). Flow Technologies, formerly Industrial Process, was renamed following our acquisition of SPX FLOW to reflect the expanded scale and capabilities of the combined operations. See Note 3, Segment Information, to the Consolidated Condensed Financial Statements for a summary description of each segment. Additional information is also available in our 2025 Annual Report within Part I, Item 1, "Description of Business."
All comparisons included within Management's Discussion and Analysis of Financial Condition and Results of Operations refer to the comparable three and nine months ended September 27, 2025, unless stated otherwise.
Effective January 1, 2026, the Company is presenting intangible amortization expense as a separate line item within the consolidated statements of operations to enhance transparency and comparability. For additional information on the change in presentation, refer to Note 1, Description of Business and Basis of Presentation. Management's discussion and analysis of the financial condition and results of operations have been adjusted to reflect the change in presentation.
Global Macroeconomic Conditions
Global macroeconomic conditions continued to evolve during the third quarter of 2026 amid geopolitical conflict, sustained energy market volatility, shifting trade policies, and changing monetary policy conditions. While customer demand remained generally resilient across many of our end markets, particularly in defense and aftermarket applications, activity levels varied by geography and market sector. We continue to focus on operational execution, productivity initiatives, and disciplined capital allocation while leveraging our diversified portfolio and global operating footprint to navigate changing market conditions.
Geopolitical and Energy Market Risk: Geopolitical developments, including ongoing conflict and instability in the Middle East, continued to affect global energy markets, trade flows, transportation networks, and customer sentiment during the third quarter of 2026. The Company remains exposed to fluctuations in energy prices, transportation costs, and global economic activity; however, our diversified end-market exposure, global manufacturing footprint, and significant aftermarket presence help mitigate the impact of localized disruptions. In addition, portions of our CCT platform may benefit from sustained investments in defense, security, and critical infrastructure programs. Overall, our continued portfolio evolution and diversified end-market exposure are intended to enhance durability and adaptability across macroeconomic and geopolitical cycles.
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Tariffs and Trade Policies: Trade policy uncertainty remained elevated during the third quarter of 2026 as governments continued to pursue tariff programs. Changes to U.S. tariff frameworks and ongoing Section 301-related proceedings may affect customer demand, sourcing decisions, and input costs across portions of our businesses. We continue to pursue opportunities to recover tariffs previously paid where authorized programs and administrative processes permit recovery and remain focused on mitigating the impact of future trade actions through pricing, sourcing, and supply chain initiatives. However, the timing and ultimate amount of any potential recoveries, as well as the impact of future trade policy developments, remain uncertain.
Workforce Availability and Cost: Labor markets remained generally stable during the third quarter of 2026, although competition for skilled manufacturing, engineering, and technical talent remains elevated in certain regions. Wage inflation has moderated relative to recent years but remains above historical levels in select markets. We continue to invest in talent development, workforce planning, automation, and productivity initiatives, which support operational performance, customer service, and long-term growth.
Technology Transformation: Advancements in automation, data analytics, artificial intelligence, and digital manufacturing platforms continue to influence industrial markets and customer investment priorities. We are leveraging digital technologies to improve operational efficiency, enhance product performance, and expand value-added solutions across our businesses. At the same time, increasing digitalization and connectivity heighten cybersecurity and data protection risks, require ongoing investment in security, infrastructure, and governance.
Supply Chain and Cost Inflation: Supply chain conditions remained relatively stable during the third quarter of 2026; however, periodic volatility in freight markets, energy costs, transportation networks, and certain commodity categories continued to affect portions of our global operations. In addition, higher interest rates and broader financial market uncertainty may affect customer investment decisions, working capital requirements, and overall economic activity. We continue to utilize dual-sourcing strategies, long-term supplier agreements, localized sourcing initiatives, inventory management practices, and productivity programs to mitigate supply chain and cost pressures and support operational performance.
Sustainability and Energy Transition: Long-term trends related to energy security, infrastructure modernization, industrial efficiency, and environmental sustainability continue to influence customer investment decisions across our end markets. These trends are creating opportunities for the Company's technologies and solutions supporting energy-efficient operations, critical industrial processes, liquefied natural gas infrastructure, cryogenic applications, electrification, and other energy-related investments. We continue to invest in product development and innovation to address evolving customer requirements and support long-term profitable growth.
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EXECUTIVE SUMMARY
The following table provides a summary of key performance indicators for the third quarter of 2026 compared to the third quarter of 2025.
Revenue Operating Income Operating Margin EPS
$1,441 $227 15.7% $1.38
44% Increase 26% Increase -230 bps Decrease -15% Decrease
Organic Revenue*
Adjusted Operating Income*
Adjusted Operating Margin*
Adjusted EPS*
$1,075 $303 21.0% $2.26
8% Increase 55% Increase 140 bps Increase 20% Increase
*Represents a non-GAAP financial measure
Further details related to these results are contained elsewhere in the Discussion of Financial Results section. Refer to the section titled "Key Performance Indicators and Non-GAAP Measures" for definitions and reconciliations between GAAP and non-GAAP metrics, including organic revenue, adjusted operating income, adjusted operating margin, and adjusted EPS.
Our third quarter 2026 results are summarized below:
•Revenue of $1,440.6 increased by $441.5, including $365.0 from acquisition contributions. Organic revenue increased by $75.8, or 7.6%, reflecting growth at each segment, led by CCT from connectors strength within the commercial aerospace and defense markets and at FT from continued growth in pump projects and valves.
•Operating income of $226.8 increased by $47.0, or 26.1%, primarily due to benefits from volume growth, pricing actions, and net savings from supply chain and productivity initiatives, partially offset by increased intangible amortization expense of $50.1. Adjusted operating income increased by $107.3, or 54.8%, driven by robust growth and operational performance across the legacy portfolio, as well as benefits from SPX FLOW results and synergy realization.
•Income from continuing operations was $1.38 per diluted share, a decrease of $0.24 compared to the prior year, primarily due to increased intangible amortization and interest expenses. Adjusted income from continuing operations was $2.26 per diluted share, an increase of $0.37, or 19.6% primarily driven by adjusted operating income growth, partially offset by increased interest expense and a higher effective tax rate and weighted-average share count resulting from the acquisition of SPX FLOW.
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DISCUSSION OF FINANCIAL RESULTS
Three Months Ended
Nine Months Ended
October 3,
2026 		September 27,
2025 		Change October 3,
2026 		September 27,
2025 		Change
Revenue $ 1,440.6 $ 999.1 44.2 % $ 4,125.6 $ 2,884.5 43.0 %
Gross profit 550.4 358.7 53.4 % 1,489.3 1,032.6 44.2 %
Operating expenses 323.6 178.9 80.9 % 940.9 526.8 78.6 %
Operating income 226.8 179.8 26.1 % 548.4 505.8 8.4 %
Interest and non-operating expenses, net 40.5 7.3 454.8 % 98.1 24.8 295.6 %
Income tax expense 61.8 44.3 39.5 % 159.9 122.0 31.1 %
Net income attributable to ITT Inc. $ 123.6 $ 126.9 (2.6) % $ 286.4 $ 356.3 (19.6) %
Gross margin 38.2 % 35.9 % 230 bps 36.1 % 35.8 % 30 bps
Operating expense to revenue ratio 22.5 % 17.9 % 460 bps 22.8 % 18.3 % 450 bps
Operating margin 15.7 % 18.0 % (230) bps 13.3 % 17.5 % (420) bps
Effective tax rate 33.2 % 25.7 % 750 bps 35.5 % 25.4 % 1,010 bps
REVENUE
The following table illustrates the revenue derived from each of our segments.
For the Three Months Ended October 3,
2026 		September 27,
2025 		Change
Organic Growth(a)
Flow Technologies $ 764.3 383.9 99.1 % 6.0 %
Motion Technologies 363.7 $ 355.6 2.3 % 1.8 %
Connect & Control Technologies 313.9 259.2 21.1 % 18.6 %
Eliminations and Other
(1.3) 0.4
Total Revenue $ 1,440.6 $ 999.1 44.2 % 7.6 %
For the Nine Months Ended October 3,
2026 		September 27,
2025 		Change
Organic Growth(a)
Flow Technologies 2,094.3 1,073.1 95.2 % 12.8 %
Motion Technologies $ 1,146.8 $ 1,067.4 7.4 % 2.9 %
Connect & Control Technologies 888.1 745.8 19.1 % 17.8 %
Eliminations and Other
(3.6) (1.8)
Total Revenue $ 4,125.6 $ 2,884.5 43.0 % 10.4 %
(a)See the section titled "Key Performance Indicators and Non-GAAP Measures" for a definition and reconciliation of organic revenue.
Flow Technologies
FT revenue for the three and nine months ended October 3, 2026 increased by $380.4 and $1,021.2, respectively, primarily due to acquisition contributions of $357.3 and $868.3, respectively. Organic revenue for the three and nine month periods increased by $23.0, or 6.0%, and $137.4, or 12.8%, respectively, primarily reflecting continued growth in pump projects, including strength in the marine and energy markets, and in valves driven by strength in the biopharmaceutical market.
Motion Technologies
MT revenue for the three and nine months ended October 3, 2026 increased $8.1 and $79.4, respectively, including favorable foreign currency translation of $1.7 and $48.8, respectively. Organic revenue increased by $6.4, or 1.8%, and $30.6, or 2.9%, for the three and nine month periods, respectively, primarily due to growth in
ITT Inc. | Q3 2026 Form 10-Q | 30
both Friction OEM and aftermarket reflecting strength within the European region, and from strength in KONI defense market applications.
Connect & Control Technologies
CCT revenue for the three and nine months ended October 3, 2026 increased $54.7 and $142.3, respectively, reflecting benefits of pricing actions and higher demand across the industrial connectors, aerospace and defense markets. Organic revenue grew 18.6% and 17.8% for the three and nine-month periods, respectively.
GROSS PROFIT
Gross profit for the three and nine months ended October 3, 2026 increased 53.4% to $550.4 and 44.2% to $1,489.3, respectively. The increase in gross profit for both periods was primarily driven by the acquisition of SPX FLOW, volume leverage, benefits from pricing actions, and net savings from productivity and sourcing initiatives, partially offset by unfavorable sales mix. In addition, the nine-month period was impacted by an unfavorable foreign currency translation of $17.9.
OPERATING EXPENSES
The following table summarizes our operating expenses, including by segment.
Three Months Ended Nine Months Ended
October 3,
2026 		September 27,
2025 		Change October 3,
2026 		September 27,
2025 		Change
General and administrative expenses $ 139.0 $ 89.6 55.1 % $ 436.9 $ 260.2 67.9 %
Sales and marketing expenses 88.4 51.8 70.7 % 249.5 150.9 65.3 %
Research and development expenses 35.0 26.4 32.6 % 104.0 79.0 31.6 %
Intangible amortization expenses 61.2 11.1 451.4 % 150.5 36.7 310.1 %
Total operating expenses $ 323.6 $ 178.9 80.9 % $ 940.9 $ 526.8 78.6 %
Total operating expenses by segment:
Flow Technologies $ 214.9 $ 70.6 204.4 % $ 551.8 $ 210.1 162.6 %
Motion Technologies 36.4 40.3 (9.7) % 112.9 119.4 (5.4) %
Connect & Control Technologies 55.1 49.8 10.6 % 159.8 145.5 9.8 %
Corporate and Other 17.2 18.2 (5.5) % 116.4 51.8 124.7 %
General and administrative (G&A) expenses increased $49.4, or 55.1%, and $176.7, or 67.9%, respectively, for the three and nine months ended October 3, 2026, primarily driven by SPX FLOW G&A costs, and higher personnel-related costs. The increase for the nine-month period includes $49.2 of transaction-related costs associated with the SPX FLOW acquisition.
Sales and marketing expenses increased by $36.6, or 70.7%, and $98.6, or 65.3%, respectively, for the three and nine months ended October 3, 2026. The increase was primarily driven by the acquisition of SPX FLOW and higher personnel costs and commission expenses.
Research and development (R&D) expenses increased $8.6, or 32.6%, and $25.0, or 31.6%, respectively, for the three and nine months ended October 3, 2026. The increase was primarily due to the acquisition of SPX FLOW and the timing of R&D project activity and reimbursements.
Intangible amortization expenses increased $50.1, or 451.4%, and $113.8, or 310.1%, for the three and nine months ended October 3, 2026, respectively, due to the amortization of intangible assets acquired in connection with the acquisition of SPX FLOW and Aerospace Contacts.
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OPERATING INCOME
The following table summarizes our operating income and margin by segment.
Three Months Ended
Nine Months Ended
October 3,
2026 		September 27,
2025 		Change October 3,
2026 		September 27,
2025 		Change
Flow Technologies $ 104.7 $ 82.1 27.5 % 249.7 222.2 12.4 %
Motion Technologies 75.0 69.8 7.4 % $ 240.5 $ 208.6 15.3 %
Connect & Control Technologies 64.3 46.2 39.2 % 174.4 127.1 37.2 %
Corporate and Other (17.2) (18.3) (6.0) % (116.2) (52.1) 123.0 %
Total operating income $ 226.8 $ 179.8 26.1 % $ 548.4 $ 505.8 8.4 %
Operating margin:
Flow Technologies 13.7 % 21.4 % (770) bps 11.9 % 20.7 % (880) bps
Motion Technologies 20.6 % 19.6 % 100 bps 21.0 % 19.5 % 150 bps
Connect & Control Technologies 20.5 % 17.8 % 270 bps 19.6 % 17.0 % 260 bps
Consolidated operating margin 15.7 % 18.0 % (230) bps 13.3 % 17.5 % (420) bps
FT operating income for the three and nine months ended October 3, 2026 increased $22.6, or 27.5%, and $27.5, or 12.4%, respectively, as a result of higher sales volume, benefits from pricing actions, supply chain and productivity initiatives, and SPX FLOW performance, partially offset by higher restructuring costs.
MT operating income increased $5.2, or 7.4%, and $31.9, or 15.3%,for the three and nine months ended October 3, 2026, primarily due to higher sales volume, net savings from supply chain and productivity initiatives, and a favorable impact from foreign currency fluctuations, partially offset by competitive pricing dynamics.
CCT operating income for the three and nine months ended October 3, 2026 increased $18.1, or 39.2%, and $47.3, or 37.2%, respectively, primarily driven by benefits from higher sales volume, pricing actions, and net savings from supply chain and productivity initiatives.
Other corporate costs decreased $1.1 and increased $64.1 for the three and nine months ended October 3, 2026, respectively. The decrease during the three-month period was due the timing of incentive compensation accruals, partially offset by higher restructuring and recruiting expenses. The increase during the nine-month period was primarily driven by transaction-related costs incurred in connection with the closing of the SPX FLOW acquisition.
INTEREST AND NON-OPERATING EXPENSES, NET
The following table summarizes our interest and non-operating income and expenses.
Three Months Ended Nine Months Ended
October 3,
2026 		September 27,
2025 		Change October 3,
2026 		September 27,
2025 		Change
Interest expense $ 45.0 $ 11.7 284.6 % $ 119.4 $ 33.6 255.4 %
Interest income (3.3) (1.5) 120.0 % (17.5) (5.6) 212.5 %
Other non-operating (income) expense, net (1.2) (2.9) (58.6) % (3.8) (3.2) 18.8 %
Total interest and non-operating expenses, net
$ 40.5 $ 7.3 454.8 % $ 98.1 $ 24.8 295.6 %
Interest expense for the three and nine months ended October 3, 2026 increased by $33.3, or 284.6%, and $85.8, or 255.4%, respectively, due to higher outstanding long-term debt and commercial paper balances during 2026, primarily stemming from the financing of the SPX FLOW acquisition.
Interest income for the three and nine months ended October 3, 2026 increased by $1.8, or 120.0%, and $11.9, or 212.5%, respectively, due to growth from SPX FLOW and a benefit from higher average cash on deposit balance during the first quarter of 2026 subsequent to the $1.3 billion equity issuance in December 2025 and until the closing of the SPX FLOW acquisition.
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Other non-operating income, net for the three and nine months ended October 3, 2026 decreased by $1.7 and increased $0.6, respectively. The decrease for the three-month period was due to a prior year gain on sale of an equity method investment. Additionally, the nine-month period increase resulted from a gain on the early extinguishment of debt.
INCOME TAX EXPENSE
The following table summarizes our income tax expense and effective tax rate (ETR).
Three Months Ended Nine Months Ended
October 3,
2026 		September 27,
2025 		Change October 3,
2026 		September 27,
2025 		Change
Income tax expense $ 61.8 $ 44.3 39.5 % $ 159.9 $ 122.0 31.1 %
Effective tax rate 33.2 % 25.7 % 750 bps 35.5 % 25.4 % 1,010 bps
The ETR for the three and nine months ended October 3, 2026 increased to 33.2% and 35.5%, respectively, primarily due to the recognition of additional tax expense related to undistributed foreign earnings and withholding taxes on distributions of foreign earnings. The SPX FLOW acquisition also affected the geographic mix of earnings, which further contributed to the higher ETR for both periods, which was partially offset by related foreign tax credit benefits. The increase in the ETR for the nine-month period was further impacted by amended tax filings in Luxembourg, as well as transaction-related costs incurred in connection with the SPX FLOW acquisition.
In October 2021, more than 135 countries and jurisdictions agreed to participate in a "two-pillar" international tax approach developed by the OECD, which includes establishing a global minimum corporate tax rate of 15 percent. The OECD published Tax Challenges Arising from the Digitalisation of the Economy - Global Anti-Base Erosion Model Rules (Pillar Two) in December 2021 and subsequently issued additional commentary and administrative guidance clarifying several aspects of the model rules. Since the model rules have been released, many countries have enacted Pillar Two-related laws, many of which became effective January 1, 2024 with additional laws effective January 1, 2025. As of October 3, 2026, the Company does not expect Pillar Two taxes to have a significant impact on its 2026 financial statements.
On January 5, 2026, the OECD released a Pillar Two Administrative Guidance package containing the Side-by-Side Safe Harbor (the SbS). Under the SbS, Multinational Enterprises headquartered in a jurisdiction that has a Qualified SbS Regime are eligible for the SbS election. The United States is listed as a jurisdiction with a Qualified SbS Regime. By making the SbS election, top-up taxes under the Income Inclusion Rule (the IIR) and Undertaxed Profits Rule (the UTPR) are set to zero. However, the SbS does not have an impact on the application of Pillar Two Qualified Domestic Minimum Top-up Taxes (the QDMTT). Jurisdictions are required to implement the SbS effective for fiscal years beginning on or after January 1, 2026 (or at the earliest practicable date where there are constitutional or other superior law constraints preventing retroactive adoption). ITT will monitor the adoption of SbS in each jurisdiction and intends to elect the SbS where available.
On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA), which includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key Tax Cuts & Jobs Act provisions (both domestic and international) and expanding certain Inflation Reduction Act incentives while accelerating the phase-out of others. The Company evaluated the OBBBA and implemented certain provisions of the legislation during the current quarter; the Company continues to evaluate the ongoing effects of the legislation.
See Note 6, Income Taxes, to the Consolidated Condensed Financial Statements for further information.
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LIQUIDITY AND CAPITAL RESOURCES
Funding and Liquidity Strategy
We monitor our funding needs and execute strategies to meet overall liquidity requirements, including the management of our capital structure, on both a short- and long-term basis. Significant factors that affect our overall management of liquidity include our cash flow from operations, credit ratings, the availability of commercial paper, access to bank lines of credit, term loans, and the ability to attract long-term capital on satisfactory terms. We assess these factors along with current market conditions on a continuous basis, and as a result, may alter the mix of our short- and long-term financing when it is advantageous to do so. We expect to have enough liquidity to fund operations for at least the next 12 months and beyond.
We manage our worldwide cash requirements considering available funds among the many subsidiaries through which we conduct business and the cost effectiveness with which those funds can be accessed. We support our growth and expansion in markets outside of the U.S. through the enhancement of existing products and development of new products, increased capital spending, and potential foreign acquisitions. We look for opportunities to access cash balances in excess of local operating requirements to meet our global liquidity needs in a cost-efficient manner. We transfer cash between certain international subsidiaries and the U.S. when it is cost effective to do so. During the nine months ended October 3, 2026, we had net cash distributions from foreign countries to the U.S. of $524.1. During the year ended December 31, 2025, we had net cash distributions from foreign countries to the U.S. of $577.5. The timing and amount of any additional future distributions will be evaluated based on our jurisdictional cash needs.
The amount and timing of dividends payable on our common stock are within the sole discretion of our Board of Directors and will be based on, and affected by, several factors, including our financial position and results of operations, available cash, expected capital spending plans, prevailing business conditions, and other factors the Board of Directors deems relevant. Therefore, we cannot provide any assurance as to what level of dividends, if any, will be paid in the future. In the third quarter of 2026, we declared a dividend of $0.386 per share for shareholders of record on September 8, 2026, which was a 10% increase from the quarterly dividends of $0.351 that were declared in 2025. Dividend payments during the nine months ended October 3, 2026 amounted to $104.1.
From time to time, the Company may repurchase shares of its stock on the open market. The timing of any repurchases and the actual number of shares repurchased depends on a variety of factors, including remaining authorization under existing Board-approved share repurchase program, the Company's stock price, restrictions under the Company's debt obligations, other uses for capital, the dilutive impact of shares issued during the period related to the Company's long-term incentive plans, impacts on the value of remaining shares, and market and economic conditions. The Company repurchased approximately $150.0 and $500.1 under our share repurchase program during the nine months ended October 3, 2026 and September 27, 2025, respectively. All repurchased shares were retired immediately following the repurchases. See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, for additional information.
Commercial Paper
When available and economically feasible, we have accessed the commercial paper market through programs in place in the U.S. and Europe to supplement cash flows generated internally and to provide additional short-term funding.
The following table presents our outstanding commercial paper borrowings.
October 3,
2026 		December 31, 2025
Commercial Paper Outstanding - U.S. Program $ 304.8 $ -
Commercial Paper Outstanding - Euro Program 397.4 258.0
Total Commercial Paper Outstanding $ 702.2 $ 258.0
During the nine months ended October 3, 2026, we borrowed under U.S. and Euro commercial paper programs for general corporate purposes and lower interest rates. See Note 15, Debt, to the Consolidated Condensed Financial Statements for further information.
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2026 DDTL Credit Agreement
On February 18, 2026, the Company entered into a credit agreement (the 2026 DDTL Credit Agreement) among the Company, as borrower, certain of its subsidiaries, as co-borrowers, each lender from time to time party thereto, and U.S. Bank National Association, as the administrative agent, sole lead arranger and sole bookrunner.
The 2026 DDTL Credit Agreement provides for delayed draw term loan commitments (the DDTL Commitments) in an aggregate principal amount of $2,875, which may be drawn, on up to two occasions, to finance the Company's acquisition of SPX FLOW. The DDTL Commitments expire on September 11, 2026 to the extent such DDTL Commitments are undrawn or have not otherwise been terminated prior to such date. An unused commitment fee on the daily unused portion of the DDTL Commitments will accrue at a rate per annum equal to 0.10% during the period from and including May 3, 2026 until the earlier of (i) the date on which the DDTL Loans (as defined below) are fully funded and (ii) the date on which the DDTL Commitments terminate or expire.
The loans drawn under the 2026 DDTL Credit Agreement (the DDTL Loans) will mature two years from the date of the first borrowing of the DDTL Loans. During the third quarter of 2026, the Company made loan repayments of $65.0 under the DDTL Loans. As a result, total outstanding borrowings under the DDTL Loans were $2,810.0, as of October 3, 2026.
The DDTL Loans bear interest at rate per annum equal to, at the Company's option, either (i) Term SOFR plus a margin ranging from 1.00% to 1.50%, or (ii) an alternate base rate plus a margin ranging from 0.0% to 0.50%, with the applicable margin determined by reference to the Company's debt ratings as set forth in the 2026 DDTL Credit Agreement. The DDTL Loans may be prepaid by the Company at any time, in whole or in part, without penalty or premium, subject to certain customary conditions.
The 2026 DDTL Credit Agreement contains customary affirmative and negative covenants. See Note 15, Debt, to the Consolidated Condensed Financial Statements for further information.
2025 Revolving Credit Agreement
On July 30, 2025, we entered into a revolving credit facility agreement with a syndicate of third-party lenders including U.S. Bank National Association, as administrative agent (the 2025 Revolving Credit Agreement). Upon its effectiveness, the 2025 Revolving Credit Agreement replaced the revolving credit facility agreement that we entered into on August 5, 2021, with a syndicate of third-party lenders including Bank of America, N.A., as administrative agent (the 2021 Revolving Credit Agreement). The 2021 Revolving Credit Agreement was terminated on July 30, 2025 with no outstanding balances remaining. The 2025 Revolving Credit Agreement matures in July 2030 and provides for an aggregate principal amount of up to $1,100. The 2025 Revolving Credit Agreement provides for a potential increase of commitment of up to $550 for a possible maximum of $1,650 in aggregate commitments at the request of the Company and with the consent of the institutions providing such increase of commitments. As of October 3, 2026, there were no outstanding borrowings under the 2025 Revolving Credit Agreement.
Borrowings under the 2025 Revolving Credit Agreement bear interest at an annual rate equal to, at the Company's option, either (i) term secured overnight financing rate (Term SOFR) plus a margin ranging from 0.785% to 1.150%, or (ii) an alternate base rate plus a margin ranging from 0.0% to 0.150%, with the applicable margin determined by reference to the Company's debt ratings set forth in the 2025 Revolving Credit Agreement. There is a commitment fee under the 2025 Revolving Credit Agreement ranging from 0.090% to 0.225% of commitments under the 2025 Revolving Credit Agreement.
The 2025 Revolving Credit Agreement contains customary affirmative and negative covenants. See Note 15, Debt, to the Consolidated Condensed Financial Statements for further information.
2025 Term Loan Credit Agreement
On April 30, 2025, the Company entered into a credit agreement (as amended, the 2025 Term Loan Credit Agreement) among the Company, as borrower, certain of our subsidiaries, as guarantors, each lender from time to time party thereto, and U.S. Bank National Association, as the administrative agent. The 2025 Term Loan Credit Agreement had a maturity of two years and provided for a term loan of $750. Proceeds of the term loan were applied to pay down the Company's U.S. commercial paper capacity and for other general corporate purposes, including working capital needs. In connection with the entry into the 2025 Revolving Credit Agreement, on July 30, 2025, the Company and lenders entered into an amendment to the 2025 Term Loan
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Credit Agreement to modify certain covenant baskets and other terms (including amendments to the leverage ratio definition) to conform to the 2025 Revolving Credit Agreement. During the nine months ended October 3, 2026, we made principal payments of $520.0 representing the remaining outstanding balance under the 2025 Term Loan Credit Agreement, thereby terminating the agreement. See Note 15, Debt, to the Consolidated Condensed Financial Statements for further information.
Sources and Uses of Liquidity
Our principal source of liquidity is our cash flow generated from operating activities, which provides us with the ability to meet the majority of our short-term funding requirements. The following table summarizes net cash provided by or used in operating, investing, and financing activities from continuing operations.
For the Nine Months Ended
October 3,
2026 		September 27,
2025
Operating activities $ 543.6 $ 441.0
Investing activities (3,646.5) (71.9)
Financing activities 1,923.1 (316.2)
Foreign exchange (4.0) 24.9
Total net cash from continuing operations $ (1,183.8) $ 77.8
Operating Activities
The increase in net cash from operating activities of $102.6 was primarily due to an increase in cash generated from segment operations, including benefits from SPX FLOW, partially offset by higher acquisition-related transaction and interest payments, and an increase in income tax payments.
Investing Activities
The increase in net cash used in investing activities of $3,574.6 was primarily driven by payments to acquire SPX FLOW and Aerospace Contacts, and a $6.3 increase in net capital expenditures.
Financing Activities
The increase in net cash provided by financing activities of $2,239.3 was primarily driven by an increase in long-term debt and commercial borrowings of $2,629.4, primarily due to the funding of the SPX FLOW acquisition, partially offset by net long-term debt repayments of $711.8. In addition, share repurchase activity decreased by $345.9 and dividend payments increased by $20.6.
ITT Inc. | Q3 2026 Form 10-Q | 36
KEY PERFORMANCE INDICATORS AND NON-GAAP MEASURES
Management reviews a variety of key performance indicators including revenue, operating income and margin, and earnings per share. In addition, we consider certain measures to be useful to management and investors when evaluating our operating performance for the periods presented. These measures provide a tool for evaluating our ongoing operations and management of assets from period to period. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives, including, but not limited to, acquisitions, dividends, and share repurchases. Some of these metrics, however, are not measures of financial performance under accounting principles generally accepted in the United States of America (GAAP) and should not be considered a substitute for measures determined in accordance with GAAP. We consider the following non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, to be key performance indicators for purposes of our reconciliation tables.
•"Organic Revenue" is defined as revenue, excluding the impacts of foreign currency fluctuations, acquisitions, and divestitures that may or may not qualify as discontinued operations. Current year activity from acquisitions is excluded for twelve months following the closing date of acquisition. The period-over-period change resulting from foreign currency fluctuations is estimated using a fixed exchange rate for both the current and prior periods. Prior year revenue is adjusted to exclude activity during the comparable period for twelve months post-closing date for divestitures that do not qualify as discontinued operations. We believe that reporting organic revenue provides useful information to investors by helping identify underlying trends in our business and facilitating comparisons of our revenue performance with prior and future periods and to our peers.
Reconciliations of revenue to organic revenue for the three and nine months ended October 3, 2026 are provided below.
Three Months Ended October 3, 2026 Flow Technologies Motion Technologies Connect & Control Technologies Eliminations Total
ITT
2026 Revenue $ 764.3 $ 363.7 $ 313.9 $ (1.3) $ 1,440.6
Less: Acquisitions
357.3 - 7.7 - 365.0
Less: Foreign currency translation
0.1 1.7 (1.1) - 0.7
2026 Organic revenue $ 406.9 $ 362.0 $ 307.3 $ (1.3) $ 1,074.9
2025 Revenue $ 383.9 $ 355.6 $ 259.2 $ 0.4 $ 999.1
Organic growth $ 23.0 $ 6.4 $ 48.1 $ 75.8
Percentage change 6.0 % 1.8 % 18.6 % 7.6 %
Nine Months Ended October 3, 2026
2026 Revenue $ 2,094.3 $ 1,146.8 $ 888.1 $ (3.6) $ 4,125.6
Less: Acquisitions
868.3 - 7.7 - 876.0
Less: Foreign currency translation
15.5 48.8 1.8 - 66.1
2026 Organic revenue $ 1,210.5 $ 1,098.0 $ 878.6 $ (3.6) $ 3,183.5
2025 Revenue $ 1,073.1 $ 1,067.4 $ 745.8 $ (1.8) $ 2,884.5
Organic growth $ 137.4 $ 30.6 $ 132.8 $ 299.0
Percentage change 12.8 % 2.9 % 17.8 % 10.4 %
•"Adjusted Operating Income" is defined as operating income adjusted to exclude special items that include, but are not limited to, restructuring, intangible amortization, certain asset impairment charges, certain acquisition- and divestiture-related impacts, and unusual or infrequent operating items. Special items represent charges or credits that impact current results, which management views as unrelated to the Company's ongoing operations and performance. "Adjusted Operating Margin" is defined as adjusted operating income divided by revenue. We believe these financial measures are useful to investors and other
ITT Inc. | Q3 2026 Form 10-Q | 37
users of our financial statements in evaluating ongoing operating profitability, as well as in evaluating operating performance in relation to our competitors.
Reconciliations of operating income to adjusted operating income (loss) for the three and nine months ended October 3, 2026 and September 27, 2025 are provided below.
Three Months Ended October 3, 2026
Flow Technologies
Motion
Technologies 		Connect & Control
Technologies
Corporate and Other
Total ITT
Operating income $ 104.7 $ 75.0 $ 64.3 $ (17.2) $ 226.8
Intangible amortization
57.8 0.2 3.2 - 61.2
Restructuring costs
8.5 1.4 - 0.9 10.8
Acquisition-related costs 0.7 - 1.6 2.2 4.5
Other special items
(0.1) (0.2) - 0.1 (0.2)
Adjusted operating income $ 171.6 $ 76.4 $ 69.1 $ (14.0) $ 303.1
Operating margin 13.7 % 20.6 % 20.5 % 15.7 %
Adjusted operating margin 22.4 % 21.0 % 22.0 % 21.0 %
Nine Months Ended October 3, 2026
Operating income $ 249.7 $ 240.5 $ 174.4 $ (116.2) $ 548.4
Intangible amortization expense 140.2 0.7 9.6 - 150.5
Acquisition-related costs(a)
61.3 - 1.7 60.3 123.3
Restructuring costs 17.2 2.8 1.4 2.5 23.9
Other special items
0.4 (2.7) - 0.1 (2.2)
Adjusted operating income $ 468.8 $ 241.3 $ 187.1 $ (53.3) $ 843.9
Operating margin 11.9 % 21.0 % 19.6 % 13.3 %
Adjusted operating margin 22.4 % 21.0 % 21.1 % 20.5 %
(a)Acquisition-related costs include inventory fair value step-up amortization expense of $57.3 for the nine months ended October 3, 2026, respectively.
Three Months Ended September 27, 2025 Flow Technologies Motion
Technologies 		Connect & Control
Technologies
Corporate and Other
Total ITT
Operating income $ 82.1 $ 69.8 $ 46.2 $ (18.3) $ 179.8
Intangible amortization
3.8 0.2 7.0 0.1 11.1
Restructuring costs 0.9 1.9 1.0 - 3.8
Acquisition-related costs
0.3 - 0.3 - 0.6
Other special items
0.4 0.2 - (0.1) 0.5
Adjusted operating income $ 87.5 $ 72.1 $ 54.5 $ (18.3) $ 195.8
Operating margin 21.4 % 19.6 % 17.8 % 18.0 %
Adjusted operating margin 22.8 % 20.3 % 21.0 % 19.6 %
Nine Months Ended September 27, 2025
Operating income $ 222.2 $ 208.6 $ 127.1 $ (52.1) $ 505.8
Intangible amortization expenses
15.0 0.7 21.1 (0.1) 36.7
Restructuring costs 6.4 4.2 2.9 - 13.5
Acquisition-related costs
0.7 - 0.6 - 1.3
Other special items
0.8 1.4 - 0.2 2.4
Adjusted operating income $ 245.1 $ 214.9 $ 151.7 $ (52.0) $ 559.7
Operating margin 20.7 % 19.5 % 17.0 % 17.5 %
Adjusted operating margin 22.8 % 20.1 % 20.3 % 19.4 %
ITT Inc. | Q3 2026 Form 10-Q | 38
•"Adjusted Income from Continuing Operations" is defined as income from continuing operations attributable to ITT Inc. adjusted to exclude special items that include, but are not limited to, restructuring, intangible amortization, certain asset impairment charges, certain acquisition- and divestiture-related impacts, income tax settlements or adjustments, and unusual or infrequent items. Special items represent charges or credits, on an after-tax basis, that impact current results, which management views as unrelated to the Company's ongoing operations and performance. The after-tax basis of each special item is determined using the jurisdictional tax rate of where the expense or benefit occurred. "Adjusted Income from Continuing Operations per Diluted Share" (Adjusted EPS) is defined as adjusted income from continuing operations divided by diluted weighted average common shares outstanding. We believe that adjusted income from continuing operations and adjusted EPS are useful to investors and other users of our financial statements in evaluating ongoing operating profitability, as well as in evaluating operating performance in relation to our competitors.
Reconciliations of adjusted income from continuing operations attributable to ITT to income from continuing operations attributable to ITT and adjusted income from continuing operations attributable to ITT per diluted share to income from continuing operations attributable to ITT per diluted share (EPS) for the three and nine months ended October 3, 2026 and September 27, 2025 are provided below. Per share amounts are reported in ones and may not calculate due to rounding.
October 3, 2026 September 27, 2025
For the Three Months Ended
Income from Continuing Operations
EPS
Income from Continuing Operations EPS
Reported
$ 123.6 $ 1.38 $ 127.0 $ 1.62
Intangible amortization
61.2 0.68 11.1 0.14
Restructuring costs 10.8 0.12 3.8 0.05
Acquisition-related costs
4.5 0.05 0.6 0.01
Other pre-tax special items
(2.3) (0.03) 0.4 -
Net tax benefit of pre-tax special items
(5.8) (0.07) (3.5) (0.05)
Other tax-related special items(a)(b)
11.3 0.13 9.1 0.12
Adjusted
$ 203.3 $ 2.26 $ 148.5 $ 1.89
October 3, 2026 September 27, 2025
For the Nine Months Ended Income from Continuing Operations
EPS
Income from Continuing Operations EPS
Reported
$ 286.5 $ 3.21 $ 356.4 $ 4.46
Intangible amortization
150.5 1.69 36.7 0.46
Acquisition-related costs 123.3 1.38 1.3 0.02
Restructuring costs
23.9 0.27 13.5 0.17
Other pre-tax special items
(3.1) (0.03) 2.4 0.03
Net tax benefit of pre-tax special items
(60.9) (0.68) (12.0) (0.15)
Other tax-related special items(a)(b)
43.8 0.49 19.0 0.24
Adjusted
$ 564.0 $ 6.33 $ 417.3 $ 5.23
(a)The three months and nine months ended October 3, 2026 include tax expense on distributions of non-U.S. income of $12.3 and $22.0, tax expense related to undistributed foreign earnings of $8.3 and $16.1, tax expense from audit settlements of $3.4 and $4.1, a tax benefit from acquisition-related accounting of ($9.6) and ($8.1) and a tax benefit from uncertain tax positions of ($4.6) and ($1.0). The nine-month period included tax expense associated with amended tax filings in Luxembourg of $8.2.
(b)The three months and nine months ended September 27, 2025 include tax expense on distributions of non-U.S. income of $5.9 and $9.4, tax expense on return to accrual adjustments of $3.5 and $4.3, tax expense on undistributed foreign earnings of $0.1 and $3.5, and other tax (benefit) expense special items of ($0.4) and $1.8, respectively.
ITT Inc. | Q3 2026 Form 10-Q | 39
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 2, Recent Accounting Pronouncements, to the Consolidated Condensed Financial Statements for information on recent accounting pronouncements.
CRITICAL ACCOUNTING ESTIMATES
The preparation of the Company's financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. The Company believes the most complex and sensitive judgments, because of their significance to the Consolidated Condensed Financial Statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2025 Annual Report describes the critical accounting estimates that are used in the preparation of the Consolidated Condensed Financial Statements. Actual results in these areas could differ from management's estimates. There have been no material changes concerning the Company's critical accounting estimates as described in our 2025 Annual Report.
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