ITT Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Revenue: Achieved $1.5 billion, up 51% year-over-year (13% organic growth).

Orders: Increased by 53%, with 13% organic growth; book-to-bill ratio of 1.1.

Adjusted EPS: $2.08, an 18% increase year-over-year.

Operating Margin: Expanded by 40 basis points; CCT margin at 21.7%, Motion Technologies at 21.1%, and Flow Technologies at 21.4% (diluted by SPX FLOW).

Free Cash Flow: Generated $176 million year-to-date, impacted by $71 million in one-time acquisition-related expenses; free cash flow margin at 11% for Q2.

2Strategic Updates and Business Highlights

Acquisitions: Successful integration of SPX FLOW and Aerospace Contacts, enhancing supply chain resilience and growth potential in defense and aerospace sectors.

CCT Performance: Strong orders growth (59% organically), particularly in kSARIA (168% growth), driven by defense contracts.

Flow Technologies: Revenue growth of 21% organically, with significant contributions from pump project sales and valves in biopharma.

Market Positioning: Continued market share gains across various segments, especially in China and North America.

3Forward Guidance and Outlook

Revenue Guidance: Raised full-year organic revenue growth forecast to 5%-8%.

EPS Guidance: Increased adjusted EPS outlook to $8.22, representing a 14% growth at the midpoint.

Margin Expansion: Expected adjusted operating margin to exceed 20.5% at the midpoint, driven by productivity gains and pricing actions.

Free Cash Flow Guidance: Midpoint raised to $565 million, with a margin between 10%-11%.

4Bad News, Challenges, or Points of Concern

Flow Technologies Margin Dilution: Margins were lower than expected due to the full quarter impact of SPX FLOW.

Middle East Orders Delays: Some orders have been deferred, which may impact future growth in that region.

Cost Pressures: Motion Technologies facing challenges in fully recovering cost inflation, leading to margin pressures.

Seasonality: Anticipated seasonal fluctuations in Motion Technologies could affect performance in the second half of the year.

5Notable Q&A Insights

SPX FLOW Integration: Luca Savi noted that while SPX FLOW has strong operational talent, there is room for improvement in embedding lean practices and enhancing productivity.

Order Visibility: Strong order backlog across various segments provides good visibility for future revenue, particularly in CCT and Flow Technologies.

Pricing Dynamics: Positive price/cost dynamics in CCT and Flow Technologies, while Motion Technologies is recovering some but not all cost inflation.

Market Opportunities: Emphasis on decentralized decision-making in SPX FLOW to better align with local market needs, especially in China.

Revenue Synergies: Opportunities identified to leverage legacy ITT products alongside SPX FLOW offerings, particularly in biopharma and hygienic applications. This summary encapsulates ITT's strong performance in Q2 2026, strategic initiatives, and outlook while also addressing challenges and insights from the Q&A session.