ITT Inc. (ITT) Q4 2025 earnings review
Organic Growth Engine Firing on All Cylinders
ITT capped off 2025 with its strongest organic growth of the year (+9%), accelerating sharply from flat performance in Q1. The company delivered a 'beat and raise' quarter with Adjusted EPS of $1.85 (+23% YoY) and Revenue of $1.05B (+13.5% YoY). While GAAP operating margins compressed slightly (-20 bps) due to M&A transaction costs, underlying execution was robust with Adjusted Operating Margins expanding 90 bps to 18.4%. The pending $4.7B SPX FLOW acquisition is set to close in Q1 2026, positioning the Industrial Process segment for transformative scale.
🐂 Bull Case
The Industrial Process segment is booming, with revenue up 17% and Operating Income up 21%. Strong pump project execution and contributions from the Svanehøj acquisition are driving significant value before the SPX FLOW deal even closes.
Connect & Control Technologies (CCT) saw operating income surge 28% YoY. With commercial aerospace recovering and defense spending robust, CCT margin expanded a massive 220 bps (GAAP) YoY.
🐻 Bear Case
While growing, Motion Technologies (MT) is the clear laggard in profitability. GAAP Operating Margin fell 60 bps to 18.7% due to unfavorable foreign currency impacts, while other segments saw massive expansion.
The gap between GAAP EPS ($1.64) and Adjusted EPS ($1.85) is widening, driven by $12M in acquisition-related costs and tax special items. The SPX FLOW integration will likely muddy the GAAP picture further in FY26.
⚖️ Verdict: 🟢🟢
Strong Buy. ITT demonstrated textbook acceleration throughout FY25. With a record backlog, rising margins in its industrial core, and the SPX FLOW catalyst arriving in Q1, the setup for FY26 is excellent despite auto market headwinds.
Key Themes
Momentum Acceleration
ITT executed a perfect 'ramp' year. Organic revenue growth started at 0.0% in Q1, climbed to 4.3% in Q2, 6.1% in Q3, and peaked at 8.6% in Q4. This momentum validates the company's long-cycle project exposure and pricing power entering 2026.
Industrial Process (IP) Powerhouse
IP was the star performer, with revenue growing 17% and Adjusted Operating Income growing 22.5%. Margins expanded 100 bps to 22.4% (Adjusted). The segment is benefiting from 'strength in pump projects' and pricing actions. The pending addition of SPX FLOW will effectively double down on this high-performing segment.
Motion Technologies Margin Pressure
Despite revenue growth of 11%, Motion Technologies (Auto/Rail) is facing margin headwinds. GAAP Operating Margin contracted 60 bps YoY to 18.7%, and Adjusted Margin only expanded 40 bps—significantly lagging the 100+ bps expansion seen in IP and CCT. Management cited 'unfavorable foreign currency impacts' as a key drag.
GAAP vs Adjusted Divergence
Acquisition costs are distorting GAAP results. While Adjusted Operating Income grew 19%, GAAP Operating Income grew only 12%, causing a 20 bps compression in reported margins. With the massive SPX FLOW deal closing in Q1 2026, investors must rely heavily on adjusted figures to track core performance, introducing complexity risk.
Aerospace & Defense Resurgence
Connect & Control Technologies (CCT) delivered 12.5% revenue growth and massive profitability gains. Operating income surged 28% YoY. This confirms the recovery in commercial aerospace and sustained demand in defense connectors are translating to the bottom line.
Other KPIs
Accelerating. Up 27% YoY with a margin of 14.1%. The company highlighted this as a milestone year, already hitting 2030 targets for cash flow margin. However, Q4 standalone FCF was flat ($187M vs $187M), indicating the gains were front-loaded in the year.
Accelerating. Up 16.7% reported and 11.3% organically. This segment is outgrowing the rest of the company significantly and is the primary carrier of the growth narrative.
Increasing. Corporate expenses ballooned from $19.7M in 24Q4 to $32.5M in 25Q4. This 65% increase is largely due to $9.5M in acquisition-related costs, weighing on GAAP profitability.
Guidance
Stable/High. Maintaining double-digit growth momentum (vs +13.5% in Q4). Organic growth guided at +5% implies some deceleration from Q4's +8.6%, likely due to tougher comps or seasonality. Note: Does not include SPX FLOW.
Accelerating. The midpoint ($1.70) represents ~17% growth vs 25Q1 Adjusted EPS of $1.45. This indicates margin expansion and operational leverage are expected to continue immediately into the new year.
Accelerating. Guided to be up ~100 bps YoY vs 25Q1 (17.4%). This confirms the pricing and productivity actions are durable.