01—Abstract
Summary
Summary of the 10-K filed February 13, 2026. Cited figures are marked; the original filing is the authoritative source.
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 billiona 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.
02—Key points
Key Highlights
- Maintained robust operating margins (26.3% in 2025) despite minor revenue headwinds, underscoring the strength of the ITW Business Model.
- Demonstrated resilience across seven diversified business segments, including Automotive OEM, Food Equipment, and Test & Measurement and Electronics.
- Continued commitment to shareholder returns with substantial share repurchases ($1.5 billion in 2025) and dividend increases (quarterly dividend rose to $1.61 per share).
- Completed strategic acquisitions in the Test & Measurement and Electronics segment, totaling $177 million in 2024 and 2025, to bolster growth in key areas.
- Successfully divested noncontrolling equity interest in Wilsonart International Holdings LLC for $398 million, generating a significant pre-tax gain.
- Focus 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.
- Strong liquidity position with $851 million in cash and equivalents and an undrawn $3.0 billion revolving credit facility as of December 31, 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Illinois Tool Works Inc kept $0.19.
- Revenue$16.04B100.0%
- Cost of revenue−$8.97B55.9%
- Gross profit$7.08B44.1%
- Operating costs−$2.86B17.8%
- Operating income$4.22B26.3%
- Interest, other & tax−$1.15B7.2%
- Net income$3.07B19.1%
Where FY2025 revenue went
$16.04B- Cost of revenue: $8.97B, 56% of revenue
- Net income: $3.07B, 19% of revenue
- Other operating costs: $2.56B, 16% of revenue
- R&D: $302.0M, 1.9% of revenue
- Interest, other & tax: $1.15B, 7.2% of revenue
Kept 19% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 13, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $16.04B$15.90B | +0.9% |
| Cost of Revenue | $8.97B$8.86B | +1.3% |
| Gross Profit | $7.08B$7.04B | +0.5% |
| R&D Expenses | $302.00M$292.00M | +3.4% |
| Operating Income | $4.22B$4.26B | −1.1% |
| Net Income | $3.07B$3.49B | −12.1% |
| EPS (Basic) | $10.52$11.75 | −10.5% |
| EPS (Diluted) | $10.49$11.71 | −10.4% |
| Shares Outstanding (Basic) | 291.50M296.80M | −1.8% |
| Shares Outstanding (Diluted) | 292.30M297.80M | −1.8% |
05—Questions
Frequently Asked Questions
What are the key drivers of ITW's financial performance and strategy?
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.
How is ITW managing risks related to economic conditions and supply chains?
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.
What is ITW's approach to capital allocation, and what is its current status?
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.
What impact did the divestiture of Wilsonart and acquisitions in Test & Measurement have?
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.
06—Continue