ILLINOIS TOOL WORKS INC Earnings Summary — Q1 2026

• Revenue for Q1 2026 grew 4.6% YoY to $4.02 billion, returning to positive growth after a period of contraction seen in early 2025.
• Net income increased nearly 10% YoY, outstripping revenue growth and suggesting continued operational leverage.
• Operating income rose to $1.02 billion from $951 million in the same quarter last year, reflecting high-quality industrial compounding.
• The 80/20 business process continues to drive world-class operating margins exceeding 25% despite cyclical industrial headcounts.
• Share count reduction continues to benefit EPS, with shares outstanding down 1.83% year-over-year.
• Selling, General & Admin expenses remained well-controlled at $722 million, representing roughly 18% of revenue.
• The company maintains a high-margin profile across its seven diverse business segments despite global economic volatility.

Management emphasizes their 'ITW Business Model' characterized by decentralization and customer-back innovation to maintain margins 500-1000 basis points above the industrial average.

Improving

Revenue growth has accelerated from a contraction of -3.37% in Q1 2025 to a gain of 4.61% in Q1 2026, marking a significant recovery in top-line trajectory.

The company is positioned as an elite industrial compounder with a focus on high-margin niche markets and aggressive capital returns through buybacks and dividends, supported by strong organic growth targets.