EX-99.1 2 a20260331-1q26ex991pressre.htm EX-99.1 Document

Exhibit 99.1

ITW Reports First Quarter 2026 Results

•Revenue of $4.02 billion, an increase of 5%
•Operating margin of 25.4%, an increase of 60 bps, as Enterprise Initiatives contributed 120 bps
•GAAP EPS of $2.66, an increase of 12%
•Full Year 2026 GAAP EPS guidance raised by $0.10 to a range of $11.10 to $11.50

GLENVIEW, IL., April 30, 2026 - Illinois Tool Works Inc. (NYSE: ITW) today reported its first quarter 2026 results and raised full year 2026 GAAP EPS guidance.

“ITW delivered a solid start to the year, marked by five percent revenue growth, margin expansion of 60 basis points to 25.4 percent, and a 12 percent increase in GAAP earnings per share to $2.66. Positive demand trends continued in our capex-related segments, led by Welding and Test & Measurement and Electronics, which delivered organic growth of six percent and five percent, respectively, this quarter,” said Christopher A. O’Herlihy, President and Chief Executive Officer.

“As we move forward, ITW’s unique and resilient business model and ‘Do What We Say’ execution ensure that we are primed to deliver robust financial performance in any environment. With a disciplined focus on our organic growth and enterprise initiatives, we expect to continue to outperform our end markets in 2026, while further increasing profitability and margins,” O’Herlihy concluded.

First Quarter 2026 Results

First quarter revenue of $4.02 billion increased by 4.6 percent. Organic revenue growth was 0.4 percent. Foreign currency translation increased revenue by 3.9 percent and an acquisition added 0.3 percent.

GAAP EPS grew 12 percent to $2.66, while operating income increased seven percent to $1.02 billion. Operating margin expanded by 60 basis points to 25.4 percent, driven by a 120-basis point contribution from enterprise initiatives. Operating cash flow was $623 million, and free cash flow was $528 million, a six percent increase representing a 69 percent conversion of net income, in line with seasonal expectations. During the quarter, the company returned capital to shareholders through the repurchase of $375 million of its own shares. The effective tax rate for the quarter was 20.6 percent.

2026 Guidance

ITW is raising its full year 2026 GAAP EPS guidance by $0.10 to a range of $11.10 to $11.50 per share, representing eight percent growth at the mid-point. Based on current demand levels and prevailing foreign exchange rates, the company continues to project revenue growth of two to four percent and organic growth of one to three percent.

For the full year, all seven segments are expected to deliver both positive organic growth and operating margin expansion. Operating margin is projected to reach a range of 26.5 to 27.5 percent, a year-over-year improvement of approximately 100 basis points, driven by an approximate 100-basis point contribution from enterprise initiatives.

Free cash flow is projected to exceed 100 percent of net income, and the company expects to repurchase approximately $1.5 billion of its own shares. The projected effective tax rate is in the range of 23 to 24 percent.

Non-GAAP Measures

This earnings release contains certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measures is included in the attached supplemental reconciliation schedule. The estimated guidance of free cash flow to net income conversion rate is based on assumptions that are difficult to predict, and estimated guidance for the most directly comparable GAAP measure and a reconciliation of this forward-looking estimate to its most directly comparable GAAP estimate have been omitted due to the unreasonable efforts required in connection with such a reconciliation and the lack of reliable forward-looking cash flow information. For the same reasons, the company is unable to address the potential significance of the unavailable information, which could be material to future results.



Forward-looking Statements

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements regarding global supply chain challenges, expected impact of inflation including raw material inflation and rising interest rates, the potential impact of tariffs, the company’s projected pricing actions, the impact of enterprise initiatives, future financial and operating performance, free cash flow and free cash flow to net income conversion rate, organic and total revenue, operating and incremental margin, price/cost impact, statements regarding diluted income per share, expected dividend payments, after-tax return on invested capital, effective tax rates, exchange rates, expected timing and amount of share repurchases, end market economic and regulatory conditions, the impact of recent or potential acquisitions and/or divestitures, and the company’s 2026 guidance. These statements are subject to certain risks, uncertainties, assumptions, and other factors, which could cause actual results to differ materially from those anticipated. Important risks that could cause actual results to differ materially from the company’s expectations include those that are detailed in ITW’s Form 10-K for 2025 and subsequent reports filed with the SEC.

About Illinois Tool Works

ITW (NYSE: ITW) is a Fortune 300 global multi-industrial manufacturing leader with revenue of $16 billion in 2025. The company’s seven industry-leading segments leverage the unique ITW Business Model to drive solid growth with best-in-class margins and returns in markets where highly innovative, customer-focused solutions are required. ITW’s approximately 43,000 dedicated colleagues around the world thrive in the company’s decentralized and entrepreneurial culture. www.itw.com.


ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
STATEMENT OF INCOME (UNAUDITED)

Three Months Ended
March 31,
In millions except per share amounts20262025
Operating Revenue$4,016 $3,839 
Cost of revenue2,256 2,161 
Selling, administrative, and research and development expenses722 706 
Amortization and impairment of intangible assets18 21 
Operating Income1,020 951 
Interest expense(73)(68)
Other income (expense)20 12 
Income Before Taxes967 895 
Income Taxes199 195 
Net Income$768 $700 
Net Income Per Share:
Basic
$2.66 $2.39 
Diluted
$2.66 $2.38 
Cash Dividends Per Share:
Paid
$1.61 $1.50 
Declared
$1.61 $1.50 
Shares of Common Stock Outstanding During the Period:
Average
288.3 293.6 
Average assuming dilution
289.1 294.5 



ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
STATEMENT OF FINANCIAL POSITION (UNAUDITED)

In millionsMarch 31, 2026December 31, 2025
Assets  
Current Assets:  
Cash and equivalents$827 $851 
Trade receivables3,380 3,227 
Inventories1,726 1,659 
Prepaid expenses and other current assets402 463 
Total current assets6,335 6,200 
Net plant and equipment2,230 2,230 
Goodwill5,083 5,098 
Intangible assets574 591 
Deferred income taxes505 519 
Other assets1,537 1,510 
 $16,264 $16,148 
Liabilities and Stockholders' Equity  
Current Liabilities:  
Short-term debt$2,545 $2,286 
Accounts payable609 522 
Accrued expenses1,534 1,636 
Cash dividends payable463 465 
Income taxes payable180 217 
Total current liabilities5,331 5,126 
Noncurrent Liabilities:  
Long-term debt6,603 6,683 
Deferred income taxes158 154 
Other liabilities942 959 
Total noncurrent liabilities7,703 7,796 
Stockholders' Equity:  
Common stock6 6 
Additional paid-in-capital1,817 1,771 
Retained earnings30,454 30,150 
Common stock held in treasury(27,246)(26,875)
Accumulated other comprehensive income (loss)(1,802)(1,827)
Noncontrolling interest1 1 
Total stockholders' equity3,230 3,226 
$16,264 $16,148 



ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
SEGMENT DATA (UNAUDITED)

Three Months Ended March 31, 2026
Dollars in millionsTotal RevenueOperating IncomeOperating Margin
Automotive OEM$820 $173 21.0 %
Food Equipment637 157 24.7 %
Test & Measurement and Electronics715 164 22.9 %
Welding507 163 32.1 %
Polymers & Fluids452 126 28.0 %
Construction Products458 135 29.4 %
Specialty Products431 135 31.3 %
Intersegment(4)— — %
Total Segments4,016 1,053 26.2 %
Unallocated— (33)— %
Total Company$4,016 $1,020 25.4 %



ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
SEGMENT DATA (UNAUDITED)

Q1 2026 vs. Q1 2025 Favorable/(Unfavorable)
Operating RevenueAutomotive OEMFood EquipmentTest & Measurement and ElectronicsWeldingPolymers & FluidsConstruction ProductsSpecialty ProductsTotal ITW
Organic(0.9)%(2.8)%4.6 %6.0 %1.7 %(1.3)%(4.7)%0.4 %
Acquisitions/
Divestitures		— %— %1.8 %— %— %— %— %0.3 %
Translation5.3 %4.5 %3.2 %1.3 %3.7 %4.7 %3.7 %3.9 %
Operating Revenue4.4 %1.7 %9.6 %7.3 %5.4 %3.4 %(1.0)%4.6 %
Q1 2026 vs. Q1 2025 Favorable/(Unfavorable)
Change in Operating MarginAutomotive OEMFood EquipmentTest & Measurement and ElectronicsWeldingPolymers & FluidsConstruction ProductsSpecialty ProductsTotal ITW
Operating Leverage(20) bps(60) bps130 bps100 bps40 bps(20) bps(80) bps—
Changes in Variable Margin & OH Costs110 bps(130) bps50 bps(110) bps110 bps30 bps70 bps40 bps
Total Organic90 bps(190) bps180 bps(10) bps150 bps10 bps(10) bps40 bps
Acquisitions/
Divestitures		——(60) bps————(10) bps
Restructuring/Other80 bps10 bps30 bps(30) bps—10 bps50 bps30 bps
Total Operating Margin Change170 bps(180) bps150 bps(40) bps150 bps20 bps40 bps60 bps
Total Operating Margin % *21.0%24.7%22.9%32.1%28.0%29.4%31.3%25.4%
* Includes unfavorable operating margin impact of amortization expense from acquisition-related intangible assets30 bps10 bps140 bps10 bps100 bps10 bps20 bps50 bps **
** Amortization expense from acquisition-related intangible assets had an unfavorable impact of ($0.05) on GAAP earnings per share for the first quarter of 2026.





ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
GAAP to NON-GAAP RECONCILIATIONS (UNAUDITED)

AFTER-TAX RETURN ON AVERAGE INVESTED CAPITAL (UNAUDITED)
Three Months Ended
March 31,
Dollars in millions20262025
Numerator:
Net Income$768 $700 
Discrete tax benefit related to the first quarter 2026(34)— 
Discrete tax benefit related to the first quarter 2025— (21)
Interest expense, net of tax (1)
56 52 
Other (income) expense, net of tax (1)
(15)(9)
Operating income after taxes$775 $722 
Denominator:
Invested capital:
Cash and equivalents$827 $873 
Trade receivables3,380 3,153 
Inventories1,726 1,663 
Net plant and equipment2,230 2,085 
Goodwill and intangible assets5,657 5,475 
Accounts payable and accrued expenses(2,143)(2,071)
Debt(9,148)(8,263)
Other, net701 327 
Total net assets (stockholders' equity)3,230 3,242 
Cash and equivalents(827)(873)
Debt9,148 8,263 
Total invested capital$11,551 $10,632 
Average invested capital (2)
$11,447 $10,432 
Net income to average invested capital (3)
26.8 %26.9 %
After-tax return on average invested capital (3)
27.1 %27.7 %

(1)    Effective tax rate used for interest expense and other (income) expense for the three months ended March 31, 2026 and 2025 was 24.1% and 24.0%, respectively.

(2)    Average invested capital is calculated using the total invested capital balances at the start of the period and at the end of the periods presented.

(3)    Returns for the three months ended March 31, 2026 and 2025 were converted to an annual rate by multiplying the calculated return by 4.



A reconciliation of the tax rate for the three month period ended March 31, 2026, excluding the first quarter 2026 discrete tax benefit of $34 million primarily related to the resolution of a U.S. tax audit, is as follows:

Three Months Ended
March 31, 2026
Dollars in millionsIncome TaxesTax Rate
As reported$199 20.6 %
Discrete tax benefit related to the first quarter 202634 3.5 %
As adjusted$233 24.1 %


A reconciliation of the tax rate for the three month period ended March 31, 2025, excluding the first quarter 2025 discrete tax benefit of $21 million related to the reversal of a valuation allowance on net operating loss carryforwards, is as follows:

Three Months Ended
March 31, 2025
Dollars in millionsIncome TaxesTax Rate
As reported$195 21.7 %
Discrete tax benefit related to the first quarter 202521 2.3 %
As adjusted$216 24.0 %


AFTER-TAX RETURN ON AVERAGE INVESTED CAPITAL (UNAUDITED)

Twelve Months Ended
Dollars in millionsDecember 31, 2025
Numerator:
Net income$3,066 
Net discrete tax benefit related to the third quarter 2025(27)
Discrete tax benefit related to the first quarter 2025(21)
Interest expense, net of tax (1)
222 
Other (income) expense, net of tax (1)
(32)
Operating income after taxes$3,208 
Denominator:
Invested capital:
Cash and equivalents$851 
Trade receivables3,227 
Inventories1,659 
Net plant and equipment2,230 
Goodwill and intangible assets5,689 
Accounts payable and accrued expenses(2,158)
Debt(8,969)
Other, net697 
Total net assets (stockholders' equity)3,226 
Cash and equivalents(851)
Debt8,969 
Total invested capital$11,344 
Average invested capital (2)
$10,959 
Net income to average invested capital28.0 %
After-tax return on average invested capital29.3 %

(1)    Effective tax rate used for interest expense and other (income) expense for the year ended December 31, 2025 was 23.9%.

(2)    Average invested capital is calculated using the total invested capital balances at the start of the period and at the end of each quarter within the period presented.

A reconciliation of the 2025 effective tax rate, excluding the third quarter 2025 net discrete tax benefit of $27 million, which included a favorable discrete tax benefit of $43 million related to the estimated U.S. federal tax liability for 2024, partially offset by a $16 million discrete tax expense related primarily to the resolution of a foreign tax audit, and excluding the first quarter 2025 discrete tax benefit of $21 million related to the reversal of a valuation allowance on net operating loss carryforwards, is as follows:

Twelve Months Ended
December 31, 2025
Dollars in millionsIncome TaxesTax Rate
As reported$900 22.7 %
Net discrete tax benefit related to the third quarter 202527 0.7 %
Discrete tax benefit related to the first quarter 202521 0.5 %
As adjusted$948 23.9 %


FREE CASH FLOW (UNAUDITED)

Three Months Ended
March 31,
Dollars in millions20262025
Net cash provided by operating activities$623 $592 
Less: Additions to plant and equipment(95)(96)
Free cash flow$528 $496 
Net income$768 $700 
Net cash provided by operating activities to net income conversion rate81 %85 %
Free cash flow to net income conversion rate69 %71 %