10-KPeriod: FY2025

ILLINOIS TOOL WORKS INC Annual Report, Year Ended Dec 31, 2025

Filed February 13, 2026For Securities:ITW

Summary

Illinois Tool Works Inc. (ITW) reported solid financial results for the fiscal year ended December 31, 2025, navigating a dynamic global environment through strong execution of its differentiated ITW Business Model. The company's diversified operations, spread across seven segments including Automotive OEM, Food Equipment, and Test & Measurement and Electronics, demonstrated resilience. Despite some segment-specific headwinds and a slight dip in overall operating revenue year-over-year, driven partly by product line simplification efforts, ITW maintained robust operating margins. Strategic initiatives, including portfolio management and customer-back innovation, continue to be key drivers of performance. The company also continued its commitment to shareholder returns through dividends and share repurchases, with approximately $2.0 billion remaining under its current repurchase program. The company's 'Next Phase' strategy, focusing on building organic growth into a core strength, remains a priority for 2024-2030. ITW emphasizes its ability to adapt to market volatility through its decentralized, entrepreneurial culture. While facing typical risks such as economic slowdowns, supply chain disruptions, and raw material price volatility, ITW's diversified end markets and global footprint provide a degree of insulation. The company's strong liquidity position, with significant cash on hand and access to credit facilities, supports its ongoing investments in growth and shareholder returns.

Financial Highlights

52 data points
Beta

Revenue

$16.04B

44.1% Gross Margin

Net Income

$3.07B

19.1% Net Margin

EPS (Diluted)

$10.49

Total Assets

$16.15B

Cash & Equivalents

$851.00M

Free Cash Flow

$2.71B

Financial Statements
Beta
Revenue$16.04B
Cost of Revenue$8.97B
Gross Profit$7.08B
R&D Expenses$302.00M
Operating Income$4.22B
Net Income$3.07B
EPS (Basic)$10.52
EPS (Diluted)$10.49
Shares Outstanding (Basic)291.50M
Shares Outstanding (Diluted)292.30M

Key Highlights

  • 1Maintained robust operating margins (26.3% in 2025) despite minor revenue headwinds, underscoring the strength of the ITW Business Model.
  • 2Demonstrated resilience across seven diversified business segments, including Automotive OEM, Food Equipment, and Test & Measurement and Electronics.
  • 3Continued commitment to shareholder returns with substantial share repurchases ($1.5 billion in 2025) and dividend increases (quarterly dividend rose to $1.61 per share).
  • 4Completed strategic acquisitions in the Test & Measurement and Electronics segment, totaling $177 million in 2024 and 2025, to bolster growth in key areas.
  • 5Successfully divested noncontrolling equity interest in Wilsonart International Holdings LLC for $398 million, generating a significant pre-tax gain.
  • 6Focus on 'Next Phase' strategy (2024-2030) aimed at building organic growth as a core strength, supported by Customer-Back Innovation (CBI) and the 80/20 process.
  • 7Strong liquidity position with $851 million in cash and equivalents and an undrawn $3.0 billion revolving credit facility as of December 31, 2025.

Frequently Asked Questions

ITW's financial performance is primarily driven by its unique ITW Business Model, which comprises the 80/20 Front-to-Back process, Customer-Back Innovation (CBI), and a Decentralized, Entrepreneurial Culture. The company's strategy, particularly the 'Next Phase' (2024-2030), focuses on building organic growth, leveraging its business model for operational excellence, and expanding through CBI, while maintaining portfolio discipline.

ITW mitigates risks through its diversified portfolio across numerous end markets and geographies, which provides resilience. The company's global footprint allows it to manufacture products in the markets where they are sold, helping to manage supply chain disruptions and the impact of tariffs. Its decentralized structure also allows for agility in responding to market volatility.

ITW's capital allocation priorities include internal investments for organic growth, attractive dividends, strategic acquisitions, and an active share repurchase program. As of December 31, 2025, the company had approximately $2.0 billion remaining under its $5.0 billion stock repurchase program announced in August 2023, and it continued to increase its quarterly dividend.

The divestiture of the noncontrolling equity interest in Wilsonart International Holdings LLC on August 5, 2024, generated a significant pre-tax gain of $363 million and improved tax benefits. Acquisitions in the Test & Measurement and Electronics segment, totaling $177 million in 2024-2025, were not material individually or in aggregate but are part of the company's strategy to strengthen this segment, contributing positively to revenue growth, though with some short-term margin dilution.