ITT (2II) Q2 2026 Earnings Report

The call presented a strong set of operational and financial results: very large order and revenue growth, margin improvement in key legacy businesses, strong free cash flow generation (adjusted for one-time acquisition costs), faster-than-expected deleveraging, raised guidance, and early signs that acquisitions (SPX FLOW, Svanehøj, kSARIA) are contributing to growth and synergies. Weaknesses were mostly integration work remaining at SPX FLOW, near-term headwinds from Middle East order timing, some dilution to Flow margins from acquisition mix, and one-time acquisition expenses that weighed on reported cash. Overall the positives (substantial organic growth, record revenue, margin expansion, cash/debt progress, and upgraded guidance) materially outweigh the listed lowlights.

ITT raised its 2026 outlook, increasing full‑year organic revenue guidance to 5%–8%, forecasting adjusted operating margin to expand by more than 100 basis points to about 20.5% at the midpoint, and raising adjusted EPS to $8.22 at the midpoint (a $0.37 increase, ~14% growth at the midpoint, with the low end of the new range above the prior high); management also raised the free cash flow midpoint to $565 million (implying a 10%–11% FCF margin) and is targeting ~2.3x leverage by year‑end after a $124 million Q2 paydown that reduced leverage to 2.5x, while maintaining SPX FLOW EPS accretion at $0.10–$0.14 for the year and noting SPX FLOW H1 orders +7% and revenue +9% year‑to‑date (Q2 book‑to‑bill 1.13, YTD B/B 1.05); the revised guidance excludes any tariff refunds beyond the $0.5 million recorded in Q2.