Executive Summary
Illinois Tool Works (ITW) reported Q1 2025 revenue of $3.8399 billion, down 3.37% year over year and 2.37% quarter over quarter. Despite a modest top-line decline, ITW delivered robust profitability with gross margin of 43.16%, operating margin of 24.77%, and net margin of 18.23%, supported by disciplined cost management and a favorable product mix. EBITDA reached $1.058 billion, and net income stood at $700 million (EPS $2.38). Free cash flow was $496 million on operating cash flow of $592 million, highlighting the company’s continued cash-generative strength even as it navigates a softer revenue environment.
Key Performance Indicators
QoQ: -7.76% | YoY:-15.62%
QoQ: -6.67% | YoY:-14.53%
QoQ: -6.67% | YoY:-13.14%
Key Insights
Revenue: $3.8399B, YoY -3.37%, QoQ -2.37%. Gross Profit: $1.657B, Margin 43.16%. Operating Income: $0.951B, Margin 24.77%. Net Income: $0.700B, Margin 18.23%. EPS: $2.38 (diluted same). EBITDA: $1.058B, EBITDA Margin 27.56%. Cash Flow: Operating $0.592B, Free Cash Flow $0.496B. Balance Sheet: Total assets $15.468B; Total debt $8.263B; Net debt $7.39B; Cash & equivalents $0.873B. Liquidity: Current ratio 1.60, Quick ratio 1.16. Leverage: Debt to capitalization ~71.8%, Interest coverage ~14x. ...
Financial Highlights
Revenue: $3.8399B, YoY -3.37%, QoQ -2.37%. Gross Profit: $1.657B, Margin 43.16%. Operating Income: $0.951B, Margin 24.77%. Net Income: $0.700B, Margin 18.23%. EPS: $2.38 (diluted same). EBITDA: $1.058B, EBITDA Margin 27.56%. Cash Flow: Operating $0.592B, Free Cash Flow $0.496B. Balance Sheet: Total assets $15.468B; Total debt $8.263B; Net debt $7.39B; Cash & equivalents $0.873B. Liquidity: Current ratio 1.60, Quick ratio 1.16. Leverage: Debt to capitalization ~71.8%, Interest coverage ~14x. Shareholder returns: Dividends paid ~$441M; share repurchases ~$375M. Valuation context: P/E ~26x, P/B ~22x, Dividend yield ~0.61%. Four-quarter trend reflects softer revenue against a backdrop of ongoing end-market cyclicality.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
3.84B |
-3.37% |
-2.37% |
| Gross Profit |
1.66B |
-8.10% |
-1.72% |
| Operating Income |
951.00M |
-15.62% |
-7.76% |
| Net Income |
700.00M |
-14.53% |
-6.67% |
| EPS |
2.38 |
-13.14% |
-6.67% |
Key Financial Ratios
operatingProfitMargin
24.8%
operatingCashFlowPerShare
$2.02
freeCashFlowPerShare
$1.69
Management Commentary
No earnings call transcript was provided in the input data. Consequently, there are no management quotes or thematically grouped highlights available for inclusion. The analysis below integrates disclosed financial results and publicly available ratios to offer context in lieu of verbatim call commentary.
Forward Guidance
No explicit forward guidance was included in the provided materials. In ITW’s typical cadence, investors should monitor end-market demand signals (Automotive OEM, Food Equipment, Construction Products, Test & Measurement), ongoing margin discipline, and commodity/currency dynamics. Given the Q1 2025 revenue decline and leverage profile, potential guidance would hinge on stabilization or improvement in key end markets, continued cost control, and cash deployment strategy (dividends vs. buybacks vs. debt reduction). Key factors to monitor include: (1) organic growth trajectory in core segments, (2) working capital efficiency, (3) capital expenditure plans relative to free cash flow, and (4) any changes to share repurchase tempo or debt reduction programs.