ITT Inc. earnings

Management highlights

- Recognized employees across ITT for strong start to the year, especially Middle East teams despite challenges. - Q1 highlights: 26% orders growth (8% organically), 33% revenue growth (11% organically), 130 basis points margin expansion, 25% adjusted EPS growth. SPX Flow had strong start with net earnings, cash accretion, and top-line growth. - CCT grew 17% organically with aerospace and industrial strength. Flow Technology grew 61% total and 12% organically due to strong project shipments. MT grew 5% organically in down automotive market. Friction OE outperformed. - Capital deployment: SPX Flow acquisition closed one month ahead of schedule with leverage ratio 2.7; working on synergies; deployed $100 million towards share repurchases. - 2026 outlook: Initiated full year adjusted EPS guidance $7.70 - $8, midpoint up 9%; guiding to 37% revenue growth and 5% organic growth; SPX Flow expected to contribute low teens net adjusted EPS accretion; backlog nearly doubled in last three years and expected to grow in 2026.

Guidance

- Initiated full year adjusted EPS guidance for 2026: range $7.70 to $8, up 9% at midpoint. - Guiding to 37% revenue growth and 5% organic growth at midpoint with book to bill above one. - SPX Flow expected to contribute low teens net adjusted EPS accretion. - 2026 expected free cash flow at midpoint roughly $560 million, free cash flow margin between 10% and 11%. - Q2 outlook: EPS expected to be up high single digits; organic revenue growth mid-single digits; Flow Technologies organic low double digits; CCT mid-single digits; MT low single digits; operating margin expected to extend by around 50 basis points compared to prior year.

Segment performance

In Q1 2026, ITT demonstrated solid momentum. Orders grew 26% with 8% organically. Revenue grew 33% and 11% organically. CCT grew 17% organically, driven by strength in aerospace, defense, and industrial. Flow Technology grew 61% in total and 12% organically, boosted by strong project shipments. MT grew 5% organically in a down automotive market. Friction OE outperformed global automotive production by over 1,400 basis points. CCT contributed 17% organic growth, Flow Technology 12% organic growth, MT 5% organic growth, and friction's organic outperformance was a key aspect.

Risks & headwinds

Actual results may differ materially due to several risks and uncertainties, including those described in ITT's 2025 Annual Report on Form 10-K and other recent SEC filings. Risks such as Middle East conflict, supply chain disruptions, tax, interest rate, and market share competition could impact business performance.

Analyst Q&A

• Q: Joe Giordani asked about SPX acquisition surprises and defense business potential air pockets due to global hostilities ending.

  A: Luca said engagement of workforce in SPX plants surprised positively, revenue synergies have growth potential; defense business has broad portfolio and large modernization trend in US and Europe so no air pockets seen.

• Q: Julian Mitchell inquired about selling days dynamics impact on Q1 sales and EPS and Q2-Q4 EPS cadence.

  A: Additional four selling days contributed around 5% revenue growth and less than 10 cents EPS in Q1; next few quarters expected around 190 - 195 EPS.

• Q: Jeff Hammond asked about SPX Flow order trends and organic growth modeling and tax rate.

  A: SPX Flow orders growth 5%, revenue growth 15%, book to bill above one for full year; organic growth in 4-year expected with IP and CCT in high single digits, MT in low single digits; tax rate at 24.9% due to SPX Flow, Mike and team working to bring it down.

• Q: Nathan Jones asked about CCT margins and revenue synergies.

  A: Price has been tailwind for CCT, largest opportunity in Caesarea; revenue synergies like Waukesha selling Bornemann twin screw pumps, Latin America mixing efforts, Middle East planning, and localization in Shidu, Shanghai, Poland.

• Q: Vlad Bistricki asked about organic growth outlook and Middle East conflict impact.

  A: No major change from expectations; Middle East impact in Q2 less than 1% of IT revenue; strong performance in short cycle, market share gains in flow and connectors.

• Q: Brad Hewitt asked about friction business outperformance compression and price-cost equation.

  A: Friction outperformance in Q1 is one quarter, stick to 500 - 700 basis points outperformance full year; price-cost positive overall, tariff situation fluid but offset by commercial and productivity actions in 2026.

• Q: Matt Somerville asked about industrial process funnel and SPX Flow EPS accretion cadence.

  A: Funnel very healthy, elevated and up year over year and sequentially; North America funnel up most; Q1 SPX Flow has outsized contribution due to March's disproportion, interest expense and share count affecting Q2-Q4 accretion.

• Q: Jake Scott asked about Middle East conflict upside and small bolt-on deals.

  A: Expect investment and service work to come out of Middle East conflict; have organizational capacity for small bolt-on deals due to strong business units like Svanoi and financial flexibility with leverage ratio 2.7