Illinois Tool Works Inc. (ITW) Q2 2025 Financial Results Summary

# Illinois Tool Works Inc. (ITW) Q2 2025 Financial Results Summary

Illinois Tool Works Inc. (NYSE: ITW) released its second quarter 2025 financial results on July 30, 2025. The company reported several key metrics highlighting its financial performance and strategic initiatives.

## Key Highlights

– **Revenue**:
– Total revenue for Q2 2025 was **$4.1 billion**, an increase of **1%**, with **flat organic growth** compared to Q2 2024.
– Foreign currency translation had a **positive impact**, increasing revenue by **1%**.

– **Earnings Per Share (EPS)**:
– GAAP EPS for the quarter was **$2.58**, marking a **2% increase** compared to **$2.55 in Q2 2024**, setting a new record for the second quarter.

– **Operating Margin**:
– The operating margin improved to **26.3%**, reflecting a **10 basis points increase** year-over-year, attributed to enterprise initiatives that contributed **130 basis points**.

– **Operating Cash Flow**:
– Operating cash flow was **$550 million** with a conversion rate of **73%** of net income.
– Free cash flow amounted to **$449 million**, representing a conversion rate of **59%** of net income.

– **Share Repurchase**:
– The company repurchased **$375 million** of its own shares during the quarter.

– **Effective Tax Rate**:
– The effective tax rate for the quarter was **24.4%**.

## Updated 2025 Guidance

– **EPS Guidance**:
– The full-year 2025 GAAP EPS guidance was raised by **$0.10**, now projected in the range of **$10.35 to $10.55** per share.

– **Revenue Growth**:
– ITW expects revenue growth of **1% to 3%** and organic growth ranging from **flat to 2%** for the year, based on current demand levels and anticipated pricing adjustments.

– **Operating Margin**:
– For 2025, operating margin is estimated to be between **26% and 27%**, with enterprise initiatives expected to contribute **100 basis points or more**.

– **Free Cash Flow**:
– The company anticipates free cash flow to exceed **100% of net income**, with plans to repurchase **approximately $1.5 billion** of its own shares.

– **Tax Rate Projection**:
– The projected effective tax rate is approximately **24%** for the year.

## Segment Performance

– **Automotive OEM**:
– Revenue of **$845 million** and operating income of **$180 million** (operating margin: **21.3%**).

– **Food Equipment**:
– Generated **$680 million** in revenue and operating income of **$189 million** (operating margin: **27.7%**).

– **Test & Measurement and Electronics**:
– Revenue reached **$686 million** with an operating income of **$157 million** (operating margin: **22.8%**).

– **Welding**:
– Revenue amounted to **$479 million**, with operating income at **$159 million** (operating margin: **33.1%**).

– **Polymers & Fluids**:
– Generated **$438 million** in revenue; operating income was **$121 million** (operating margin: **27.7%**).

– **Construction Products**:
– Revenue was **$473 million**, with operating income at **$145 million** (operating margin: **30.8%**).

– **Specialty Products**:
– Produced **$455 million** in revenue, yielding an operating income of **$148 million** (operating margin: **32.6%**).

## Comparison to Previous Year

– Year-over-year performance illustrates resilience despite various challenges:
– Total revenue growth of **1%** and operating income showing slight variations across segments;
– GAAP EPS increased by **$0.03**, showcasing improvement;
– Operating margins remained stable or increased slightly in various segments.

## Conclusion

ITW’s second quarter results for 2025 underscore its ability to navigate growth in a challenging environment while maintaining solid financial health. The company’s strategic focus on customer-backed innovation and robust operational performance positions it well for future growth as it continues to implement its Next Phase growth priorities.