ITT Inc.

10/29/2025 | Press release | Distributed by Public on 10/29/2025 07:02

Quarterly Report for Quarter Ending September 27, 2025 (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, and energy 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: Motion Technologies (MT), Industrial Process (IP), and Connect & Control Technologies (CCT). 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 2024 Annual Reportwithin 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 28, 2024, unless stated otherwise.
Effective January 1, 2025, the Company changed its method of determining the cost for certain inventories from a last-in, first-out (LIFO) to first-in, first out (FIFO) for all inventories previously accounted for under LIFO. For additional information on the change in accounting principle, refer to Note 1, Description of Business and Basis of Presentation. Management's discussion and analysis of financial condition and results of operations have been adjusted to reflect the change in accounting principle.
Global Macroeconomic Conditions
Tariff Pressures and Uncertainty
In early 2025, the U.S. government announced or extended tariffs on a range of imported goods, including certain industrial components and raw materials, as part of ongoing trade actions involving China and other countries. In response, a number of countries including China and several key U.S. trading partners implemented or expanded retaliatory tariffs on various U.S.-origin goods. While certain U.S. tariff rates were subsequently paused or reduced for a limited period under ongoing trade negotiations, the overall tariff environment remains fluid. These trade measures have contributed to increased volatility in global markets and heightened uncertainty regarding international trade policies. As a result, we are experiencing greater complexity and uncertainty in managing our cost structure, sourcing strategies and global supply chain. The tariffs have the potential to increase our input costs and may affect the pricing and competitiveness of some of our products, particularly those that rely on imported materials or components. While we have not experienced a material impact on our business to date, we are continuing to evaluate the situation and assess mitigation strategies, including supply chain adjustments and pricing actions. The ultimate impact of these tariffs on our operations and financial results is currently uncertain and will depend on the scope, duration, and potential expansion or expiration of the measures implemented.
Inflationary Pressures
Inflationary pressures, driven by factors such as supply chain disruptions and the ongoing Russia-Ukraine and broader Middle East conflicts, have continued into 2025 and have led to increased prices for energy and raw materials we use in our production processes, including commodities such as steel, oil, copper and tin. Additionally, the manufacturing industry continues to experience a skilled labor shortage, which has created difficulties in attracting and retaining factory employees and has resulted in higher labor costs. We have been able to offset most of these impacts through pricing actions and productivity savings, which we continue to pursue. Future impacts on our business and financial results as a result of these conditions are not estimable at
ITT Inc. | Q3 2025 Form 10-Q | 27
this time, and depend, in part, on the extent to which these conditions improve or worsen, which remains uncertain. For additional discussion of the risks related to global macroeconomic conditions, see Part I, Item IA, "Risk Factors" in our 2024 Annual Report.
EXECUTIVE SUMMARY
The following table provides a summary of key performance indicators for the third quarter of 2025 as compared to the third quarter of 2024.
Revenue Operating Income Operating Margin EPS
$999 $180 18.0% $1.62
13% Increase -14% Decrease -560 bps Decrease -18% Decrease
Organic Revenue*
Adjusted Operating Income*
Adjusted Operating Margin*
Adjusted EPS*
$932 $185 18.5% $1.78
6% Increase 14% Increase 20 bps Increase 21% 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 2025 results are summarized below:
•Revenue of $999.1 increased by $113.9 primarily driven by pump projects in IP; aerospace and defense demand and pricing actions in CCT; and strength in Friction original equipment in MT. In addition, favorable foreign currency translation and the net impact of the acquisition of kSARIA, partially offset by the divestiture of Wolverine, drove increases to revenue of $24.3 and $35.8, respectively.
•Operating income of $179.8 decreased by $28.8 primarily due to the prior year gain on sale of $47.8 from the divestiture of Wolverine, higher material and labor costs, which were partially offset by higher volume, benefits from pricing and productivity actions, and contributions from Svanehøj and kSARIA.
•Income from continuing operations was $1.62 per diluted share, a decrease of $0.35 as compared to the prior year, primarily due to the prior year gain on sale of the Wolverine business. Adjusted income from continuing operations was $1.78 per diluted share, an increase of $0.31 as compared to the prior year due to higher operating income, including kSARIA and Svanehøj accretive earnings, and a lower weighted average share count.
ITT Inc. | Q3 2025 Form 10-Q | 28
DISCUSSION OF FINANCIAL RESULTS
Three Months Ended
Nine Months Ended
September 27,
2025 		September 28,
2024 		Change September 27,
2025 		September 28,
2024 		Change
Revenue $ 999.1 $ 885.2 12.9 % $ 2,884.5 $ 2,701.7 6.8 %
Gross profit 355.2 314.7 12.9 % 1,018.3 933.0 9.1 %
Operating expenses 175.4 106.1 65.3 % 512.5 414.8 23.6 %
Operating income 179.8 208.6 (13.8) % 505.8 518.2 (2.4) %
Interest and non-operating expenses, net 7.3 8.2 (11.0) % 24.8 18.2 36.3 %
Income tax expense 44.3 38.0 16.6 % 122.0 104.1 17.2 %
Net income attributable to ITT Inc. $ 126.9 $ 161.6 (21.5) % $ 356.3 $ 392.9 (9.3) %
Gross margin 35.6 % 35.6 % - bps 35.3 % 34.5 % 80 bps
Operating expense to revenue ratio 17.6 % 12.0 % 560 bps 17.8 % 15.4 % 240 bps
Operating margin 18.0 % 23.6 % (560) bps 17.5 % 19.2 % (170) bps
Effective tax rate 25.7 % 19.0 % 670 bps 25.4 % 20.8 % 460 bps
REVENUE
The following table illustrates the revenue derived from each of our segments.
For the Three Months Ended September 27,
2025 		September 28,
2024 		Change
Organic Growth(a)
Motion Technologies $ 355.6 $ 344.9 3.1 % 0.7 %
Industrial Process 383.9 333.8 15.0 % 11.3 %
Connect & Control Technologies 259.2 207.2 25.1 % 6.1 %
Eliminations and Other
0.4 (0.7)
Total Revenue $ 999.1 $ 885.2 12.9 % 6.1 %
For the Nine Months Ended
September 27,
2025 		September 28,
2024 		Change
Organic Growth(a)
Motion Technologies $ 1,067.4 $ 1,121.8 (4.8) % 1.4 %
Industrial Process 1,073.1 998.4 7.5 % 5.2 %
Connect & Control Technologies 745.8 584.1 27.7 % 4.1 %
Eliminations and Other
(1.8) (2.6)
Total Revenue $ 2,884.5 $ 2,701.7 6.8 % 3.5 %
(a)See the section titled "Key Performance Indicators and Non-GAAP Measures" for a definition and reconciliation of organic revenue.
Motion Technologies
MT revenue for the three months ended September 27, 2025 increased $10.7 primarily due to favorable foreign currency impacts, partially offset by the Wolverine divestiture. For the nine months ended September 27, 2025, revenue decreased $54.4, primarily due to a loss of revenue of $89.1 as a result of the Wolverine divestiture, partially offset by favorable foreign currency translation of $20.4. Organic revenue for the three and nine-month periods increased $2.3 and $14.3, respectively, driven by strength in Friction original equipment and KONI rail shipments.
ITT Inc. | Q3 2025 Form 10-Q | 29
Industrial Process
IP revenue for the three and nine months ended September 27, 2025 increased $50.1 and $74.7, respectively, including growth from acquisitions of $5.6 and $19.5 and favorable foreign currency translation impacts of $6.7 and $2.8, respectively. Organic revenue for the three and nine-month periods increased by $37.8 and $52.4, respectively, primarily driven by pump project volume and favorable pricing actions.
Connect & Control Technologies
CCT revenue for the three and nine months ended September 27, 2025 increased by $52.0 and $161.7, respectively, primarily due to the acquisition of kSARIA in September 2024, which contributed $37.6 and $135.4, respectively. Organic revenue for the three- and nine-month periods increased by $12.6 and $23.7, respectively, primarily driven by growth in aerospace and defense, inclusive of pricing actions.
GROSS PROFIT
Gross profit for the three months ended September 27, 2025 and September 28, 2024 was $355.2 and $314.7, respectively, reflecting gross margins of 35.6% for both periods. Gross profit for the nine months ended September 27, 2025 and September 28, 2024 was $1,018.3 and $933.0, respectively, reflecting gross margins of 35.3% and 34.5%, respectively. The increases in gross profit and margin were primarily driven by benefits from higher volume and net savings from productivity and sourcing initiatives, partially offset by unfavorable sales mix and freight costs.
OPERATING EXPENSES
The following table summarizes our operating expenses, including by segment.
Three Months Ended Nine Months Ended
For the September 27,
2025 		September 28,
2024 		Change September 27,
2025 		September 28,
2024 		Change
General and administrative expenses $ 89.8 $ 74.8 20.1 % $ 260.8 $ 223.1 16.9 %
Sales and marketing expenses 57.5 50.5 13.9 % 167.7 151.2 10.9 %
Research and development expenses 28.1 28.6 (1.7) % 84.0 88.3 (4.9) %
Gain on sale of businesses
- (47.8) (100.0) % - (47.8) (100.0) %
Total operating expenses $ 175.4 $ 106.1 65.3 % $ 512.5 $ 414.8 23.6 %
Total operating expenses by segment:
Motion Technologies $ 40.3 $ (5.9) 783.1 % $ 119.4 $ 83.0 43.9 %
Industrial Process 70.6 62.7 12.6 % 206.2 181.2 13.8 %
Connect & Control Technologies 46.3 38.8 19.3 % 135.0 109.0 23.9 %
Corporate & Other 18.2 10.5 73.3 % 51.9 41.6 24.8 %
General and administrative (G&A) expenses increased $15.0 and $37.7 for the three and nine months ended September 27, 2025, respectively, primarily driven by higher incentive-based compensation, M&A-related professional service costs, restructuring expenses and the kSARIA acquisition-related expenses.
Sales and marketing expenses increased $7.0 and $16.5 for the three and nine months ended September 27, 2025, respectively, primarily driven by the acquisition of kSARIA and higher selling expenses in IP, partially offset by the divestiture of the Wolverine business.
Research and development expenses decreased $0.5 and $4.3 for the three and nine months ended September 27, 2025, respectively, primarily driven by the divestiture of Wolverine in the prior year and timing of R&D projects.
Gain on sale of business includes $47.8 related to our sale of the Wolverine business within the MT segment in July 2024.
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OPERATING INCOME
The following table summarizes our operating income and margin by segment.
Three Months Ended
Nine Months Ended
September 27,
2025 		September 28,
2024 		Change September 27,
2025 		September 28,
2024 		Change
Motion Technologies $ 69.8 $ 110.0 (36.5) % $ 208.6 $ 251.8 (17.2) %
Industrial Process 82.1 70.5 16.5 % 222.2 201.5 10.3 %
Connect & Control Technologies 46.2 38.1 21.3 % 127.1 106.2 19.7 %
Corporate and Other (18.3) (10.0) 83.0 % (52.1) (41.3) 26.2 %
Total operating income $ 179.8 $ 208.6 (13.8) % $ 505.8 $ 518.2 (2.4) %
Operating margin:
Motion Technologies 19.6 % 31.9 % (1,230) bps 19.5 % 22.4 % (290) bps
Industrial Process 21.4 % 21.1 % 30 bps 20.7 % 20.2 % 50 bps
Connect & Control Technologies 17.8 % 18.4 % (60) bps 17.0 % 18.2 % (120) bps
Consolidated operating margin 18.0 % 23.6 % (560) bps 17.5 % 19.2 % (170) bps
MT operating income for the three and nine months ended September 27, 2025 decreased $40.2 and $43.2, respectively, primarily due to the prior year gain on sale of $47.8 from the divestiture of Wolverine. Operating income for the three and nine-month periods benefitted from productivity savings and higher volume, as well as favorable foreign currency impacts, which more than offset higher labor and material costs.
IP operating income for the three and nine months ended September 27, 2025 increased $11.6 and $20.7, respectively, primarily driven by higher sales volume, benefits from pricing actions, and net savings from supply chain, restructuring savings and productivity initiatives. These increases were partially offset by the impact of higher restructuring expenses, and higher labor and overhead costs.
CCT operating income for the three and nine months ended September 27, 2025 increased $8.1 and $20.9, respectively, primarily driven by benefits from pricing actions, net savings from productivity, sourcing, and restructuring initiatives, as well as higher sales volume and contributions from kSARIA. The increases for both periods were partially offset by higher labor, material and strategic investment costs as well as higher temporary acquisition amortization from kSARIA.
Other corporate costs for the three and nine months ended September 27, 2025 increased $8.3 and $10.8, respectively, primarily due to higher incentive-based compensation costs and M&A related professional service costs, partially offset by favorable foreign currency impacts.
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INTEREST AND NON-OPERATING EXPENSES, NET
The following table summarizes our interest and non-operating income and expenses.
Three Months Ended Nine Months Ended
September 27,
2025 		September 28,
2024 		Change September 27,
2025 		September 28,
2024 		Change
Interest expense $ 11.7 $ 10.0 17.0 % $ 33.6 $ 25.1 33.9 %
Interest income (1.5) (1.6) (6.3) % (5.6) (5.0) 12.0 %
Other non-operating income, net (2.9) (0.2) 1,350.0 % (3.2) (1.9) 68.4 %
Total interest and non-operating expenses, net
$ 7.3 $ 8.2 (11.0) % $ 24.8 $ 18.2 36.3 %
Total interest expense, net for the three and nine months ended September 27, 2025 increased $1.8 and $7.9, respectively, primarily due to higher average outstanding debt during the 2025 periods, partially offset by lower average interest rates on commercial paper borrowings.
Other non-operating income, net for the three and nine months ended September 27, 2025 increased $2.7 and $1.3, respectively, due to a gain on sale of an equity investment.
INCOME TAX EXPENSE
The following table summarizes our income tax expense and effective tax rate (ETR).
Three Months Ended Nine Months Ended
September 27,
2025 		September 28,
2024 		Change September 27,
2025 		September 28,
2024 		Change
Income tax expense $ 44.3 $ 38.0 16.6 % $ 122.0 $ 104.1 17.2 %
Effective tax rate 25.7 % 19.0 % 670 bps 25.4 % 20.8 % 460 bps
The ETR for the three and nine months ended September 27, 2025 increased to 25.7% and 25.4%, respectively, primarily related to the jurisdictional mix of earnings. The increase to the ETR year-over-year was partially driven by a prior year benefit related to the sale of the Wolverine business.
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 September 27, 2025, the Company does not expect Pillar Two taxes to have a significant impact on its 2025 financial statements.
On July 4, 2025, President Trump signed the One Big Beautiful Bill Act, 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. While the recently enacted legislation did not have a material impact on the Company's financial results for this quarter, we are currently reviewing its provisions in detail and evaluating its potential impact in future periods. We will continue to monitor any forthcoming guidance and will assess the effects on our business as more information becomes available.
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 September 27, 2025, we had net cash distributions from foreign countries to the U.S. of $550.9. During the year ended December 31, 2024, we had net cash distributions from foreign countries to the U.S. of $230.4. 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 2025, we declared a dividend of $0.351 per share for shareholders of record on September 2, 2025, which was a 10% increase from the quarterly dividends of $0.319 that were declared in 2024. Dividend payments during the nine months ended September 27, 2025 amounted to $83.5. On October 29, 2025, the Company announced a quarterly dividend of $0.351 per share on its outstanding common stock. Our Board of Directors approved the cash dividend for the fourth quarter of 2025, which will be payable on December 31, 2025 to shareholders of record as of the close of business on December 1, 2025.
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 programs, 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. During the nine months ended September 27, 2025, we spent $500.1 on open-market share repurchases under our share repurchase programs. During the nine months ended September 28, 2024, we spent $104.0 on open-market share repurchases under our share repurchase programs. All repurchased shares are 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.
September 27,
2025 		December 31, 2024
Commercial Paper Outstanding - U.S. Program $ - $ 424.5
Commercial Paper Outstanding - Euro Program 414.6 -
Total Commercial Paper Outstanding $ 414.6 $ 424.5
ITT Inc. | Q3 2025 Form 10-Q | 33
In the nine months ended September 27, 2025, we borrowed under the European commercial paper program to partially refinance the Company's U.S. commercial paper. The proceeds of the 2025 Term Loan Credit Agreement were used to refresh the U.S. commercial paper capacity and for other general corporate purposes. See Note 14, Debt, to the Consolidated Condensed Financial Statements for further information.
All outstanding commercial paper for both periods had maturity terms of less than three months from the date of issuance.
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.
Borrowings under the 2025 Revolving Credit Agreement bear interest at an annual rate equal to, at the Company's option, either (i) 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 14, 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 has a maturity of two years and provides 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 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.
The 2025 Term Loan Credit Agreement has a maturity of two years and provides 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.
Total outstanding borrowings under the Amended 2025 Term Loan Credit Agreement were $575.0, as of September 27, 2025.
Borrowings under the 2025 Term Loan 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 0.875% to 1.375%, or (ii) an alternate base rate plus a margin ranging from 0.0% to 0.375%, with the applicable margin determined by reference to the Company's debt ratings set forth in the 2025 Term Loan Credit Agreement. The loans under the 2025 Term Loan Credit Agreement may be prepaid by the Company at any time, in whole or in part, without penalty or premium, subject to certain conditions.
The 2025 Term Loan Credit Agreement contains customary affirmative and negative covenants. See Note 14, Debt, to the Consolidated Condensed Financial Statements for further information.
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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
September 27,
2025 		September 28,
2024
Operating activities $ 441.0 $ 339.4
Investing activities (71.9) (794.6)
Financing activities (316.2) 432.0
Foreign exchange 24.9 (4.4)
Total net cash from continuing operations $ 77.8 $ (27.6)
Operating Activities
The increase in net cash from operating activities of $101.6 was primarily due to favorable working capital from timing of accounts receivable collections, higher customer advanced payments, and lower compensation payments in the current year.
Investing Activities
The decrease in net cash used in investing activities of $722.7 was mainly driven by the prior year acquisitions of Svanehøj and kSARIA, offset by the proceeds from the sale of the Wolverine business. Refer to Note 19, Acquisitions and Divestitures, to the Consolidated Condensed Financial Statements for further information. In addition, capital expenditures, net of government incentives, decreased $14.5 compared to the prior year.
Financing Activities
The change in net cash flows related to financing activities of $748.2 from a source of $432.0 during the prior year to a use of $316.2 during the nine months of 2025 was primarily due to an increase of $396.9 in open-market share repurchases as well as higher debt repayments of $334.1.
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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 September 27, 2025 are provided below.
Three Months Ended September 27, 2025 Motion Technologies Industrial
Process 		Connect & Control
Technologies 		Eliminations Total
ITT
2025 Revenue $ 355.6 $ 383.9 $ 259.2 $ 0.4 $ 999.1
Less: Acquisitions
- 5.6 37.6 - 43.2
Less: Foreign currency translation
15.8 6.7 1.8 - 24.3
2025 Organic revenue $ 339.8 $ 371.6 $ 219.8 $ 0.4 $ 931.6
2024 Revenue $ 344.9 $ 333.8 $ 207.2 $ (0.7) $ 885.2
Less: Divestitures
7.4 - - 0.1 7.5
2024 Organic revenue
$ 337.5 $ 333.8 $ 207.2 $ (0.8) $ 877.7
Organic growth $ 2.3 $ 37.8 $ 12.6 $ 53.9
Percentage change 0.7 % 11.3 % 6.1 % 6.1 %
Nine Months Ended September 27, 2025
2025 Revenue $ 1,067.4 $ 1,073.1 $ 745.8 $ (1.8) $ 2,884.5
Less: Acquisitions
- 19.5 135.4 - 154.9
Less: Foreign currency translation
20.4 2.8 2.6 (0.1) 25.7
2025 Organic revenue $ 1,047.0 $ 1,050.8 $ 607.8 $ (1.7) $ 2,703.9
2024 Revenue $ 1,121.8 $ 998.4 $ 584.1 $ (2.6) $ 2,701.7
Less: Divestitures
89.1 - - - 89.1
2024 Organic revenue
$ 1,032.7 $ 998.4 $ 584.1 $ (2.6) $ 2,612.6
Organic growth $ 14.3 $ 52.4 $ 23.7 $ 91.3
Percentage change 1.4 % 5.2 % 4.1 % 3.5 %
ITT Inc. | Q3 2025 Form 10-Q | 36
•"Adjusted Operating Income" is defined as operating income adjusted to exclude special items that include, but are not limited to, restructuring, 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 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 September 27, 2025 and September 28, 2024 are provided below.
Three Months Ended September 27, 2025 Motion
Technologies 		Industrial
Process 		Connect & Control
Technologies
Corporate and Other
Total ITT
Operating income $ 69.8 $ 82.1 $ 46.2 $ (18.3) $ 179.8
Restructuring costs
1.9 0.9 1.0 - 3.8
Acquisition-related costs
- 0.3 0.3 - 0.6
Other special items
0.2 0.4 - (0.1) 0.5
Adjusted operating income $ 71.9 $ 83.7 $ 47.5 $ (18.4) $ 184.7
Operating margin 19.6 % 21.4 % 17.8 %
N/A
18.0 %
Adjusted operating margin 20.2 % 21.8 % 18.3 %
N/A
18.5 %
Nine Months Ended September 27, 2025
Operating income $ 208.6 $ 222.2 $ 127.1 $ (52.1) $ 505.8
Restructuring costs 4.2 6.4 2.9 - 13.5
Acquisition-related costs - 0.7 0.6 - 1.3
Other special items
1.4 0.8 - 0.2 2.4
Adjusted operating income $ 214.2 $ 230.1 $ 130.6 $ (51.9) $ 523.0
Operating margin 19.5 % 20.7 % 17.0 %
N/A
17.5 %
Adjusted operating margin 20.1 % 21.4 % 17.5 %
N/A
18.1 %
ITT Inc. | Q3 2025 Form 10-Q | 37
Three Months Ended September 28, 2024 Motion
Technologies 		Industrial
Process 		Connect & Control
Technologies
Corporate and Other
Total ITT
Operating income $ 110.0 $ 70.5 $ 38.1 $ (10.0) $ 208.6
Gain on sale of business
(47.8) - - - (47.8)
Restructuring costs 0.2 0.4 0.2 - 0.8
Acquisition-related costs
- (0.4) 1.2 - 0.8
Other special items
(0.1) - - - (0.1)
Adjusted operating income $ 62.3 $ 70.5 $ 39.5 $ (10.0) $ 162.3
Operating margin 31.9 % 21.1 % 18.4 % N/A 23.6 %
Adjusted operating margin 18.1 % 21.1 % 19.1 % N/A 18.3 %
Nine Months Ended September 28, 2024
Operating income $ 251.8 $ 201.5 $ 106.2 $ (41.3) $ 518.2
Gain on sale of business
(47.8) - - - (47.8)
Restructuring costs 2.3 2.5 1.8 - 6.6
Acquisition-related costs
- 4.1 1.2 - 5.3
Other special items
(0.3) - - - (0.3)
Adjusted operating income $ 206.0 $ 208.1 $ 109.2 $ (41.3) $ 482.0
Operating margin 22.4 % 20.2 % 18.2 %
N/A
19.2 %
Adjusted operating margin 18.4 % 20.8 % 18.7 %
N/A
17.8 %
ITT Inc. | Q3 2025 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, 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 September 27, 2025 and September 28, 2024 are provided below. Per share amounts are reported in ones and may not calculate due to rounding.
September 27, 2025 September 28, 2024
For the Three Months Ended
Income from Continuing Operations
EPS
Income from Continuing Operations EPS
Reported
$ 127.0 $ 1.62 $ 161.8 $ 1.97
Gain on sale of Wolverine business
- - (47.8) (0.58)
Restructuring costs
3.8 0.05 0.8 0.01
Acquisition-related costs
0.6 0.01 0.8 0.01
Other pre-tax special items
0.5 - (0.1) -
Net tax benefit of pre-tax special items
(1.3) (0.02) (0.7) (0.01)
Other tax-related special items(a)(b)
9.1 0.12 5.6 0.07
Adjusted
$ 139.7 $ 1.78 $ 120.4 $ 1.47
September 27, 2025 September 28, 2024
For the Nine Months Ended
Income from Continuing Operations
EPS
Income from Continuing Operations EPS
Reported
$ 356.4 $ 4.46 $ 393.1 $ 4.77
Gain on sale of Wolverine business
- - (47.8) (0.58)
Restructuring costs
13.5 0.17 6.6 0.08
Acquisition-related costs
1.3 0.02 5.3 0.06
Other pre-tax special items
2.4 0.03 (0.3) -
Net tax benefit of pre-tax special items
(4.1) (0.05) (2.9) (0.04)
Other tax-related special items(a)(b)
19.0 0.24 7.3 0.09
Adjusted $ 388.5 $ 4.87 $ 361.3 $ 4.38
(a)The three 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.
(b)The three months ended September 28, 2024 includes tax expense on distributions of non-U.S. income $4.6, tax expense from valuation allowance impacts $2.2, and a tax benefit on return to accrual adjustments of ($1.3). The nine months ended September 28, 2024 includes tax expense on distributions of $5.4, tax expense from valuation allowance impacts of $2.2, expense from tax on undistributed foreign earnings of $1.9, a tax benefit to record a net operating loss deferred tax asset related to a prior year acquisition of $(2.0) and a tax benefit on return to accrual adjustments of ($0.6).
ITT Inc. | Q3 2025 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 2024 Annual Reportdescribes 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 2024 Annual Report.
ITT Inc. published this content on October 29, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 29, 2025 at 13:03 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]