ITT Revenue Climbs, But Net Income Falls on Higher Costs

TL;DR

**ITT's top-line growth is a mirage; rising costs and a missing divestiture gain mean profits are shrinking, making this a cautious hold.**

AI Summary

ITT Inc. reported a mixed financial performance for the three and nine months ended September 27, 2025. Revenue increased by 12.9% to $999.1 million for the three months ended September 27, 2025, up from $885.2 million in the prior year, and by 6.8% to $2,884.5 million for the nine months, compared to $2,701.7 million in 2024. However, net income attributable to ITT Inc. decreased significantly by 21.4% to $126.9 million for the three-month period, down from $161.6 million, and by 9.3% to $356.3 million for the nine-month period, from $392.9 million. This decline was primarily driven by a lack of the $47.8 million gain on sale of business recognized in the prior year, increased general and administrative expenses by $15.0 million to $89.8 million, and higher interest expense, which rose by $1.7 million to $11.7 million for the quarter. Diluted EPS also fell to $1.62 from $1.97 for the quarter and to $4.46 from $4.77 for the nine months. The company also engaged in substantial share repurchases, totaling $500.9 million for the nine months ended September 27, 2025, compared to $104.0 million in the prior year, reducing outstanding shares to 78.0 million from 81.5 million.

Why It Matters

ITT's mixed results signal a challenging environment for investors, as revenue growth is overshadowed by declining profitability and increased operational costs. The significant share repurchases, totaling $500.9 million, could be seen as a move to bolster shareholder value amidst profit pressures, but also indicate a lack of higher-return investment opportunities. Competitively, if ITT cannot translate revenue growth into net income, it risks falling behind peers who manage costs more effectively. For employees and customers, the focus on 'highly engineered critical components' suggests stability in specialized markets, but the overall profit dip could impact future R&D or expansion plans, potentially affecting innovation and service levels.

Risk Assessment

Risk Level: medium — The risk level is medium due to declining net income attributable to ITT Inc. by 21.4% for the three months and 9.3% for the nine months, despite revenue growth. This is exacerbated by increased interest expense from $10.0 million to $11.7 million for the quarter and a significant increase in long-term debt from $232.6 million to $577.7 million, indicating higher leverage and potential sensitivity to interest rate fluctuations.

Analyst Insight

Investors should scrutinize ITT's cost management strategies and future profitability outlook, especially given the absence of one-time gains. While revenue growth is positive, the decline in net income and increased debt warrant caution. Consider holding existing positions but deferring new investments until there's clear evidence of improved operating leverage and sustainable profit growth.

Financial Highlights

revenue

$999.1M

operating Margin

18.0%

net Income

$126.9M

eps

$1.62

gross Margin

35.5%

revenue Growth

+12.9%

Revenue Breakdown

Key Numbers

• $999.1M — Revenue (Increased 12.9% for the three months ended September 27, 2025, compared to $885.2M in 2024.)
• $126.9M — Net Income Attributable to ITT Inc. (Decreased 21.4% for the three months ended September 27, 2025, from $161.6M in 2024.)
• $1.62 — Diluted EPS (Decreased from $1.97 for the three months ended September 27, 2025.)
• $500.9M — Share Repurchases (Increased significantly from $104.0M in the prior nine-month period.)
• $577.7M — Non-current portion of long-term debt (Increased from $232.6M as of December 31, 2024.)
• 78.0M — Shares Outstanding (Decreased from 81.5M as of December 31, 2024, due to repurchases.)
• $11.7M — Interest Expense (Increased from $10.0M for the three months ended September 28, 2024.)
• $89.8M — General and administrative expenses (Increased from $74.8M for the three months ended September 28, 2024.)

Key Players & Entities

• ITT Inc. (company) — diversified manufacturer
• Svanehj Group A/S (company) — acquisition target
• $999.1 million (dollar_amount) — revenue for three months ended September 27, 2025
• $885.2 million (dollar_amount) — revenue for three months ended September 28, 2024
• $126.9 million (dollar_amount) — net income attributable to ITT Inc. for three months ended September 27, 2025
• $161.6 million (dollar_amount) — net income attributable to ITT Inc. for three months ended September 28, 2024
• $47.8 million (dollar_amount) — gain on sale of business in 2024
• $500.9 million (dollar_amount) — share repurchases for nine months ended September 27, 2025
• New York Stock Exchange (regulator) — exchange where ITT Common Stock is registered
• SEC (regulator) — U.S. Securities and Exchange Commission

FAQ

Industry Context

ITT Inc. operates in diverse industrial markets, including fluid technology, motion technologies, and connectors and energy technologies. The company faces competition from a range of global and regional players within these segments. Trends such as increasing demand for automation, electrification, and sustainable solutions are shaping the industry, requiring continuous innovation and adaptation.

Regulatory Implications

ITT Inc. must comply with various financial reporting regulations, including GAAP and SEC requirements. Changes in tax laws or accounting standards could impact reported earnings and financial position. The company also faces potential regulatory scrutiny related to environmental, social, and governance (ESG) factors, which are increasingly important to investors and stakeholders.

What Investors Should Do

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Glossary

Noncontrolling interests

Represents the portion of equity in a subsidiary that is not attributable to the parent company. It's the ownership interest of 'other' shareholders in the consolidated financial statements. (This line item impacts the net income attributable to ITT Inc., as it is subtracted to arrive at the parent company's net income.)

Other comprehensive income (loss)

Includes gains and losses that are not recognized in net income on the income statement but are reported in a separate section of the financial statements. Examples include foreign currency translation adjustments and changes in pension plan values. (Affects the total comprehensive income attributable to ITT Inc., influencing the overall change in equity beyond net income.)

Weighted average common shares – diluted

The number of outstanding common shares adjusted to reflect the potential dilution from all dilutive securities, such as stock options and convertible preferred stock, as if they had been exercised or converted. (Used in the calculation of diluted earnings per share, providing a more conservative measure of profitability on a per-share basis.)

Year-Over-Year Comparison

Compared to the prior year, ITT Inc. reported a 12.9% increase in revenue for the three months ended September 27, 2025, reaching $999.1 million. However, net income attributable to ITT Inc. saw a significant decrease of 21.4% to $126.9 million, primarily due to the absence of a prior-year gain on sale of business and increased operating expenses. Diluted EPS also declined to $1.62 from $1.97. The company also substantially increased its share repurchase activity, indicating a shift in capital allocation strategy.

Key Financial Figures

• $1.00 — ich registered Common Stock, par value $1.00 per share ITT New York Stock Exchange

Filing Documents

• itt-20250927.htm (10-Q) — 1997KB
• exhibit101-ittamendmentno1.htm (EX-10.1) — 941KB
• exhibit311q32025.htm (EX-31.1) — 8KB
• exhibit312q32025.htm (EX-31.2) — 8KB
• exhibit321q32025.htm (EX-32.1) — 4KB
• exhibit322q32025.htm (EX-32.2) — 5KB
• 0000216228-25-000061.txt ( ) — 11882KB
• itt-20250927.xsd (EX-101.SCH) — 68KB
• itt-20250927_cal.xml (EX-101.CAL) — 94KB
• itt-20250927_def.xml (EX-101.DEF) — 295KB
• itt-20250927_lab.xml (EX-101.LAB) — 748KB
• itt-20250927_pre.xml (EX-101.PRE) — 572KB
• itt-20250927_htm.xml (XML) — 1889KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION 1. Financial Statements (unaudited) Consolidated Condensed Statements of Operations 1 Consolidated Condensed Statements of Comprehensive Income 2 Consolidated Condensed Balance Sheets 3 Consolidated Condensed Statements of Cash Flows 4 Consolidated Condensed Statements of Changes in Shareholders' Equity 5 Notes to Consolidated Condensed Financial Statements: Note 1. Description of Business and Basis of Presentation 7 Note 2. Recent Accounting Pronouncements 10 Note 3. Segment Information 10 Note 4. Revenue 13 Note 5. Restructuring Actions 15 Note 6 . Income Taxes 16 Note 7 . Earnings Per Share Data 17 Note 8 . Receivables , Net 17 Note 9 . Inventories 17 Note 10 . Other Current and Non-Current Assets 18 Note 1 1 . Plant, Property and Equipment, Net 18 Note 1 2 . Goodwill and Other Intangible Assets, Net 19 Note 1 3 . Accounts Payable, Accrued Liabilities and Other Non-Current Liabilities 20 Note 1 4 . Debt 21 Note 15. Long-Term Incentive Employee Compensation 23 Note 16. Capital Stock 23 Note 17. Commitments and Contingencies 24 Note 18. Derivative Financial Instruments 25 Note 19. Acquisitions and Divestitures 26 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview 27 Discussion of Financial Results 29 Liquidity and Capital Resources 33 Key Performance Indicators and Non-GAAP Measures 36 Recent Accounting Pronouncements 40 Critical Accounting Estimates 40 3. Quantitative and Qualitative Disclosures about Market Risk 40 4. Controls and Procedures 40

– OTHER INFORMATION

PART II – OTHER INFORMATION 1. Legal Proceedings 41 1A. Risk Factors 41 2. Unregistered Sales of Equity Securities and Use of Proceeds 41 3. Defaults Upon Senior Securities 41 4. Mine Safety Disclosures 41 5. Other Information 42 6. Exhibits 43 Signature 44 WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and current reports, proxy statements and other information with the U.S. Securities and Exchange Commission (the SEC). The SEC maintains a website at www.sec.gov on which you may access our SEC filings. In addition, we make available free of charge at investors.itt.com copies of materials we file with, or furnish to, the SEC as soon as reasonably practical after we electronically file or furnish these reports, as well as other important information that we disclose from time to time. Information contained on our website, or that can be accessed through our website, does not constitute a part of this Quarterly Report on Form 10-Q (this Report). We have included our website address only as an inactive textual reference and do not intend it to be an active link to our website. Our corporate headquarters are located at 100 Washington Boulevard, 6th Floor, Stamford, CT 06902 and the telephone number of this location is (914) 641-2000. FORWARD-LOOKING AND CAUTIONARY STATEMENTS Some of the information included herein includes forward-looking statements within the meaning of the Securities Exchange Act of 1933, and the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not historical facts, but rather represent a belief regarding future events based on current expectations, estimates, assumptions and projections about our business, future financial results and the industry in which we operate, and other legal, regulatory and economic development

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) Three Months Ended Nine Months Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Revenue $ 999.1 $ 885.2 $ 2,884.5 $ 2,701.7 Cost of revenue 643.9 570.5 1,866.2 1,768.7 Gross profit 355.2 314.7 1,018.3 933.0 General and administrative expenses 89.8 74.8 260.8 223.1 Sales and marketing expenses 57.5 50.5 167.7 151.2 Research and development expenses 28.1 28.6 84.0 88.3 Gain on sale of business — ( 47.8 ) — ( 47.8 ) Operating income 179.8 208.6 505.8 518.2 Interest expense 11.7 10.0 33.6 25.1 Interest income ( 1.5 ) ( 1.6 ) ( 5.6 ) ( 5.0 ) Other non-operating expense (income), net ( 2.9 ) ( 0.2 ) ( 3.2 ) ( 1.9 ) Income before income tax expense 172.5 200.4 481.0 500.0 Income tax expense 44.3 38.0 122.0 104.1 Income from continuing operations 128.2 162.4 359.0 395.9 Loss from discontinued operations, net of tax benefit of $ 0.0 , $ 0.0 , $ 0.0 , and $ 0.0 , respectively ( 0.1 ) ( 0.2 ) ( 0.1 ) ( 0.2 ) Net income 128.1 162.2 358.9 395.7 Less: Income attributable to noncontrolling interests 1.2 0.6 2.6 2.8 Net income attributable to ITT Inc. $ 126.9 $ 161.6 $ 356.3 $ 392.9 Amounts attributable to ITT Inc.: Income from continuing operations $ 127.0 $ 161.8 $ 356.4 $ 393.1 Loss from discontinued operations, net of tax ( 0.1 ) ( 0.2 ) ( 0.1 ) ( 0.2 ) Net income attributable to ITT Inc. $ 126.9 $ 161.6 $ 356.3 $ 392.9 Earnings per share attributable to ITT Inc.: Basic $ 1.63 $ 1.98 $ 4.49 $ 4.80 Diluted $ 1.62 $ 1.97 $ 4.46 $ 4.77 Weighted average common shares – basic 78.0 81.6 79.4 81.9 Weighted average common shares – diluted 78.4 82.1 79.8 82.4 The accompanying Notes to the Consolidated Condensed Financial Statements are an integral part of the Statements of Operations. ITT Inc. | Q3 2025 Form 10-Q | 1 CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAU