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ILLINOIS TOOL WORKS INC 8-K Report, Financial Results (Feb 3, 2026)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed February 3, 2026
Period End
February 3, 2026
Security
ITW
In the record · 2016–202610-K1110-Q338-K86

ITW filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 86 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · May ’16May ’16
  2. Leadership change8-K · Feb ’21Feb ’21
  3. Leadership change8-K · Feb ’23Feb ’23
  4. Material agreement8-K · Feb ’25Feb ’25

01—Abstract

Summary

Summary of the 8-K filed February 3, 2026. Cited figures are marked; the original filing is the authoritative source.

Illinois Tool Works (ITW) reported fourth quarter and full year 2025 results on February 3, 2026, showing steady top-line growth, record quarterly operating income, and a 2026 outlook calling for modest revenue expansion and meaningful margin improvement.

Q4 2025 revenue rose 4.1% to $4.1 billiona, but organic growth was only 1.3%; foreign currency contributed 2.5 points and acquisitions 0.3 points. GAAP diluted EPS of $2.72 grew 7%, and operating margin expanded 30 bps to 26.5%, driven by enterprise initiatives (+140 bps). Full-year 2025 revenue was $16.0 billion (+0.9%) with flat organic growth, while GAAP EPS of $10.49 slightly beat the prior guidance midpoint of $10.45.

Operating margin was 26.3%, with enterprise initiatives adding 130 bps, offsetting tariff pressure. Full-year free cash flow was $2.7 billionb (88% conversion to net income), and the company returned $3.3 billion to shareholders via dividends and buybacks. For 2026, ITW guided to revenue growth of 2-4% (organic 1-3%), operating margin of 26.5-27.5% (about +100 bps), and GAAP EPS of $11.00-$11.40, roughly 7% growth at the midpoint.

Management expects free cash flow above 100% of net income and plans roughly $1.5 billionc of share repurchases. The guidance assumes current demand and FX rates, and all seven segments are expected to show positive organic growth and margin expansion.

For investors, the key takeaways are that profitability gains, rather than volume growth, are driving earnings, and organic growth remains weak (flat in 2025). Balance sheet indicators also warrant attention: short-term debt rose to $2.3 billiond from $1.6 billion, and total debt reached about $9.0 billion, while the Automotive OEM and Construction Products segments showed organic weakness.

02—Key points

Key Highlights

  1. Q4 2025 revenue of $4.09B grew 4.1%, but organic growth was just 1.3%; FX added 2.5 points and acquisitions 0.3 points.
  2. Q4 GAAP diluted EPS of $2.72 rose 7% year over year; Q4 operating margin reached 26.5% (+30 bps), with enterprise initiatives contributing 140 bps.
  3. Full-year 2025 revenue of $16.0B rose 0.9% with flat organic growth; GAAP EPS of $10.49 slightly exceeded the prior guidance midpoint of $10.45.
  4. Full-year 2025 free cash flow of $2.7B equaled 88% of net income, down from 82% in 2024 on a comparable basis, and ITW returned $3.3B to shareholders.
  5. 2026 guidance: revenue growth of 2-4% (organic 1-3%), operating margin of 26.5-27.5%, and GAAP EPS of $11.00-$11.40 (about 7% growth at midpoint).
  6. Management plans roughly $1.5B of 2026 share repurchases and expects free cash flow above 100% of net income.
  7. Short-term debt increased to $2.29B from $1.56B at year-end 2024, and total debt rose to about $8.97B, which investors should monitor alongside buybacks.

03—Questions

Frequently Asked Questions

  1. Did ITW's growth come from underlying demand or from other sources?

    Mostly not from underlying demand. Full-year 2025 organic revenue was flat, and Q4 organic growth was 1.3%. Reported growth was supported by foreign currency translation (+0.8% for the year, +2.5% in Q4) and acquisitions. Management attributes outperformance to Customer-Back Innovation, which contributed 2.4 points of 2025 growth.

  2. What is driving the margin improvement?

    Enterprise initiatives, which contributed 130 bps to full-year 2025 operating margin and 140 bps in Q4. Pricing and supply chain actions offset tariff impacts, and six of seven segments expanded margins in 2025. Management expects roughly 100 bps of additional expansion in 2026, all from enterprise initiatives.

  3. How does the 2026 guidance compare with 2025 results?

    The 2026 GAAP EPS range of $11.00-$11.40 implies about 7% growth at the midpoint over 2025's $10.49. Revenue growth of 2-4% is roughly in line with or somewhat above 2025's 0.9%, and organic growth of 1-3% would be a clear improvement over the flat 2025 result. The guidance assumes current demand and FX rates.

  4. Are there concerns about the balance sheet or cash flow quality?

    Some. Cash flow conversion fell to 88% of net income in 2025 from 94% in 2024 (operating cash flow basis: 102% vs. 94%, so the trend is mixed). Short-term debt rose to $2.3B, and total debt is about $9.0B against $3.2B of stockholders' equity. Management's plan to repurchase about $1.5B of shares in 2026 and the 2025 $3.3B return of capital are supported by free cash flow of $2.7B, but leverage and dividend coverage are worth monitoring.

  5. Which segments are weakest?

    Construction Products (full-year revenue down 4.6%, organic down 5.1%, though margin rose to 30.2%) and Test & Measurement and Electronics (organic down 1.4% for the year, margin down 30 bps to 24.6%) are the weakest. Automotive OEM grew 3.2% in revenue but had the lowest segment margin at 21.1%. Welding and Specialty Products were the strongest, with margins above 31%.

04—Continue

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