ITT outlines $7.70 to $8 full-year adjusted EPS guidance following SPX FLOW closeMay 6, 2026
Earnings Call Insights: ITT Inc. (ITT) Q1 2026
MANAGEMENT VIEW
*
"In Q1, we demonstrated solid momentum across the portfolio, thanks to the disciplined execution and the tangible benefits of our M&A strategy." (CEO, President & Director Luca Savi)
*
"We grew orders 26% and 8% organically. We grew revenue 33% and 11% organically. We expanded margin by 130 basis points and we delivered 25% adjusted EPS growth." (CEO, President & Director Savi)
*
"I'm also encouraged by SPX FLOW's strong start. In month 1, we already produced net earnings, cash accretion and promising top line growth." (CEO, President & Director Savi)
*
"On March 2, we closed the SPX FLOW acquisition, 1 month ahead of schedule and with a leverage ratio comfortably below 3 at 2.7." (CEO, President & Director Savi)
*
"When it comes to synergies, the Flow Technologies team has been hard at work identifying and implementing actions to secure the $80 million cost of synergies." (CEO, President & Director Savi)
*
"In March, we also deployed $100 million towards share repurchases." (CEO, President & Director Savi)
*
"Our teams delivered $1.2 billion in revenue, up 33% in total and 11% organically." (Senior VP & CFO Emmanuel Caprais)
*
"EPS of $1.98 on the new basis was up an outstanding 25% versus the prior year." (Senior VP & CFO Caprais)
*
"Before opening the line for Q&A... Emmanuel... will be leaving the company." (CEO, President & Director Savi) "Mike Savinelli... has been appointed to serve as interim CFO." (CEO, President & Director Savi)
OUTLOOK
*
"Today, we initiate on the new basis, our full year adjusted EPS guidance with a range of $7.70 to $8, up 9% at the midpoint." (CEO, President & Director Luca Savi) "We're guiding to 37% revenue growth and 5% organic growth at the midpoint... and we expect SPX FLOW to contribute low-teens net adjusted EPS accretion." (CEO, President & Director Savi)
*
"We expect to deliver roughly 70 basis points of margin expansion to approximately 20% at the midpoint... Cost synergies are expected to be approximately $15 million in 2026." (Senior VP & CFO Emmanuel Caprais)
*
"I'd now like to briefly discuss our Q2 outlook. EPS is expected to be up high single digits in Q2 compared to the prior year. We anticipate organic revenue growth in the mid-single digits." (Senior VP & CFO Caprais) "Operating margin should expand by around 50 basis points compared to the prior year and approximately 20%." (Senior VP & CFO Caprais)
*
Change vs. prior quarter framing: "Because of the planned SPX FLOW closing in March, we'll focus today on Q1 guidance. This does not include any of the accretion we expect from the acquisition." (Senior VP & CFO Caprais, Q4 2025) vs. "With the SPX FLOW acquisition closed, we are now initiating our full year outlook." (Senior VP & CFO Caprais, Q1 2026)
FINANCIAL RESULTS
*
"Our teams delivered $1.2 billion in revenue." (Senior VP & CFO Emmanuel Caprais) "Operating income grew 42% and margin expanded 130 basis points." (Senior VP & CFO Caprais)
*
Segment profitability and mix highlights: "Flow Technologies expanded margin 100 basis points to 23.7%" and "MT operating income grew 22% for a margin of 21.1%" and "CCT delivered 20% income growth to a margin of 19.3%." (Senior VP & CFO Caprais)
*
Cash flow and one-time items: "Lastly, free cash flow of $14 million was impacted by $71 million of onetime acquisition-related expenses. Excluding these impacts, free cash flow was up 10% year-over-year." (Senior VP & CFO Caprais)
*
Accounting basis change reminder: "As previously communicated... going forward, ITT will include intangible amortization expenses related to acquisitions as a separate line item... In 2025, the impact of this reporting change on earnings per share was $0.13 in Q1 and $0.47 for the full year." (VP, Investor Relations and FP&A Carleen Salvage)
Q&A
*
Joseph Giordano, TD Cowen: asked what was a "pleasant surprise" vs. "more work to do" after owning SPX FLOW; CEO Savi: "the engagement of the workforce on the shop floor is something that I was able to experience and definitely surprised me positively" and "I also was positively surprised by the growth potential that we have on the revenue synergies."
*
Joseph Giordano, TD Cowen: asked if "an ending of global hostilities" could create defense "air pockets"; CFO Caprais: "No, we don't see that" and cited "a large defense monetization trend... both in the U.S. and in Europe."
*
Julian Mitchell, Barclays: asked about the Q1 selling-days benefit and EPS cadence; CFO Caprais: "the additional 4 selling days was around 5% -- 5 points of growth" and "a little less than $0.10" of EPS, adding "the next few quarters are going to be around the $1.90 to $1.95 EPS for Q2, Q3 and Q4."
*
Jeffrey Hammond, KeyBanc: pressed on SPX FLOW growth and order trends; CEO Savi: "the orders growth, was a good order growth of 5%" and "We expect also the book-to-bill for the full year to be above 1 for SPX FLOW."
*
Vladimir Bystricky, Citi: asked about incremental Middle East headwinds; CEO Savi: "our overall exposure to the region is approximately 4% of total revenue" and estimated Q2 impact as "between $0.5 million and $0.7 million of the sales."
*
Bradley Hewitt, Wolfe: asked if Friction outgrowth vs. builds would compress; CEO Savi: "we stick to our usually forecast of an outperformance between 500 and 700 basis points for the full year" and "we won 39 platforms, electrified platforms in the quarter."
*
Matt Summerville, D.A. Davidson: asked about SPX FLOW accretion cadence; CFO Caprais: "you get your interest that increases roughly by $30 million a quarter" and cited "your share count that goes to 90 million shares" as key offsets.
SENTIMENT ANALYSIS
*
Analysts: slightly positive, with repeated congratulatory comments alongside detailed modeling and risk probes, including "selling days dynamics" (Julian Mitchell, Barclays) and tax-rate surprise (Jeffrey Hammond, KeyBanc: "That was a little bit of a surprise that the tax rate is going up.").
*
Management: positive in prepared remarks (CEO Savi: "We are truly pumped up.") and generally firm in Q&A, including categorical responses (CFO Caprais: "No, we don't see that") while flagging uncertainty on tariffs (CEO Savi: "the situation is very fluid").
*
Versus prior quarter: Q4 2025 carried pre-close integration framing ("we still expect to close the transaction in March" (CEO, President & Director Savi, Q4 2025)), while Q1 2026 tone emphasized execution and realized deal benefits ("we closed the SPX FLOW acquisition" (CEO, President & Director Savi, Q1 2026)).
QUARTER-OVER-QUARTER COMPARISON
*
SPX FLOW moved from pending to closed, shifting guidance posture from limited-period guidance ("we'll focus today on Q1 guidance" (Senior VP & CFO Caprais, Q4 2025)) to full-year initiation ("we are now initiating our full year outlook" (Senior VP & CFO Caprais, Q1 2026)).
*
Key call-level change: leadership transition was newly disclosed in Q1 2026 ("Emmanuel... will be leaving the company" and "Mike Savinelli... has been appointed to serve as interim CFO" (CEO, President & Director Savi)).
*
Analyst focus rotated from integration readiness and segment demand (Q4 2025) to quantifying cadence (selling days, EPS run-rate, SPX FLOW margin normalization, interest/tax impacts) in Q1 2026.
RISKS AND CONCERNS
*
Geopolitical and operational disruption: CEO Savi cited "the ongoing conflict, the supply chain disruptions" in the Middle East, while also sizing exposure and near-term impact ("approximately 4% of total revenue" and Q2 impact "between $0.5 million and $0.7 million" (CEO, President & Director Savi)).
*
Financing and earnings offsets post-deal: CFO Caprais tied SPX FLOW’s net contribution to "higher interest expense due to the $2.9 billion debt" and "a higher combined tax rate of 24.9%" (Senior VP & CFO Caprais), and noted quarterly interest ramp ("roughly by $30 million a quarter" (Senior VP & CFO Caprais)).
*
Tariffs: CEO Savi said "the situation is very fluid" and added ITT "were able to offset all the tariffs with commercial and productivity actions" in 2025, expecting "a similar scenario in 2026." (CEO, President & Director Savi)
FINAL TAKEAWAY
Management framed Q1 2026 as a step-change quarter driven by SPX FLOW closing and broad-based organic growth, while initiating full-year adjusted EPS guidance of $7.70 to $8 alongside 37% total revenue growth and 5% organic growth at the midpoint. The call paired near-term cadence markers (Q2 high-single-digit EPS growth, mid-single-digit organic growth, and margin expansion of around 50 basis points) with integration execution targets, including $80 million of cost synergies and $15 million expected in 2026, while also disclosing a CFO transition with Emmanuel Caprais departing and Mike Savinelli named interim CFO.
Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/itt/earnings/transcripts]
MORE ON ITT
* ITT Inc. (ITT) Q1 2026 Earnings Call Transcript [https://seekingalpha.com/article/4899319-itt-inc-itt-q1-2026-earnings-call-transcript]
* ITT Inc. (ITT) Presents at Bank of America Global Industrials Conference 2026 - Slideshow [https://seekingalpha.com/article/4883552-itt-inc-itt-presents-at-bank-of-america-global-industrials-conference-2026-slideshow]
* ITT Inc. (ITT) Presents at Bank of America Global Industrials Conference 2026 Transcript [https://seekingalpha.com/article/4883201-itt-inc-itt-presents-at-bank-of-america-global-industrials-conference-2026-transcript]
* ITT beats top-line and bottom-line estimates; initiates FY26 outlook [https://seekingalpha.com/news/4586741-itt-beats-top-line-and-bottom-line-estimates-initiates-fy26-outlook]
* ITT Q1 2026 Earnings Preview [https://seekingalpha.com/news/4585970-itt-q1-2026-earnings-preview]
ITT (ITT) Q1 2026 Earnings Call TranscriptMay 6, 2026
Image source: The Motley Fool.
Date
Wednesday, May 6, 2026 at 8:30 a.m. ET
Call participants
Chief Executive Officer and President — Luca Savi Chief Financial Officer — Emmanuel Caprais Vice President, Treasurer, Chief Tax Officer, and Assistant Secretary; Interim CFO — Mike Samineli Vice President, Investor Relations — Carleen Salvage
Need a quote from a Motley Fool analyst? Email pr@fool.com
Full Conference Call Transcript
Carleen Salvage: Thank you, Kathy, and good morning. Joining me in Stanford today are Luca Savi, ITT's Chief Executive Officer and President; and Emmanuel Caprais, Chief Financial Officer. Today's call will cover ITT's financial results for the 3-month period ended April 4, 2026, which we announced this morning. Please refer to Slide 2 of the presentation available on our website, where we note that today's comments will include forward-looking statements that are based on our current expectations.
Actual results may differ materially due to several risks and uncertainties and including those described in our 2025 annual report on Form 10-K and other recent SEC filings, except where otherwise noted, the first quarter results we present this morning will be compared to the first quarter of 2025 and include certain non-GAAP financial measures. The reconciliation of such measures to the most comparable GAAP figures are detailed in our press release and in the appendix of our presentation, both of which are available on our website.
As previously communicated during our fourth quarter 2025 earnings call, going forward, ITT will include intangible amortization expenses related to acquisitions as a separate line item within the consolidated statement of operations and in its adjustments to earnings. In 2025, the impact of this reporting change on earnings per share was $0.13 in Q1 and $0.47 for the full year. All adjusted EPS figures presented going forward will be on this basis. A full reconciliation of the impact of the revision to adjusted operating income and margin, income from continuing operations and EPS for each quarter in 2025 and the full year can be found in the supplemental materials at the end of our presentation available on our website.
With that, it is now my pleasure to turn the call over to Luca, who will begin on Slide 3.
Luca Savi: Thank you, Carleen, and good morning. Before I begin, I want to recognize our employees across ITT for delivering a very strong start to the year. In particular, our Middle East teams who delivered despite the ongoing conflict the supply chain disruptions and the challenges this has represented to their professional and personal lives. Thank you. In Q1, we demonstrated solid momentum across the portfolio, thanks to the disciplined execution and the tangible benefits of our M&A strategy. We delivered outstanding orders growth above market revenue expansion and robust earnings exemplified our 25% EPS growth in the quarter. We are truly pumped up. Here are some highlights. We grew orders 26% at 8% organically.
Story Continues
We grew revenue 33% and 11% organically. We expanded margin by 130 basis points and we delivered 25% adjusted EPS growth. I'm also encouraged by SPX FLOW's strong start. In month 1, we already produced net earnings cash accretion and promising top line growth. This is all included in our newly formed Flow Technologies segment that now combines industrial process and SPX FLOW. This was an outstanding quarter. Let's dive into the details. We grew revenue 33% and 11% organically with all businesses contributing. CCT up 17%, grew industrial connector sales by 27% and Aerospace and Defense by nearly 20% and we're already benefiting from the Boeing price negotiation closed last year.
MT increased revenue by 15% and 5% organically in an automotive market down as friction outperformed global vehicle production by more than 1,400 basis points. And to top it off, Flow Technologies revenue was up 61% or 12% organically. The team delivered higher project sales, including from Sevan, which were up 44%, well down gland. Show cycle also grew 10% due to market share gains in all product categories. On orders, ITT grew 26% and 8% organically in Q1, showing broad strength across our segments. CCT grew 10% organically on the back of strong aerospace demand and market share gains in industrial connectors.
In Flow Technologies, we delivered 44% orders growth and 7% organically, driven by share gains in short cycle, including baseline pumps, aftermarket and bars. Bars up 24% continues to benefit from a GLP-1 project that keeps expanding in scope. And friction continued to gain market share with significant platform awards, including in the high-performance segment. And last but not least, our book-to-bill was 1.09. We delivered equally strong margin expansion of 130 basis points with all businesses contributing. Flow Technologies delivered 23.7% operating margin up 100 basis points, thanks to significant contributions from volume and to a lesser extent, price. At 21.1% ITT deliver 130 basis points margin progression as productivity and volume growth more than offset price pressure.
Finally, CCT expanded margin to 19.3% as volume growth and price both contributed. Moving to capital deployment. On March 2, we closed the SPX Flow acquisition, 1 month ahead of schedule and with a leverage ratio comfortably below 3 at 2.7. The newly created Flow Technologies segment, both nearly $3 billion in revenue and is a global flow leader with premier brands in pumps, bars, mixes and other process solutions. On the first day, the entire ITT leadership team actively participate in person to turn all meetings around the world with SPX FLOW employees. We lead out our vision and our expectations and answered questions from highly engaged employees.
I was fortunate enough to be in delavant Wisconsin together with Rudy, or WakasaCheriboral leader. I was encouraged by what I saw in the plant by the enthusiasm of the local team by their deep knowledge of the business and their openness to do better and to do more. I also experienced this enthusiasm with Wendy, our mixing solutions leader and our 2 other sites in Rochester, New York and Palmyra Pennsylvania. Their team has been working hard to improve material flows and overall equipment efficiency.
Biotech Wendy, Rudy and I also share future growth plans and was still early in the year, I'm heartened by the orders and sales growth we delivered in the first quarter to achieve high single-digit revenue growth for 2026. When it comes to synergies, the Flow Technologies team has been hard at work identifying and implementing actions to secure the $80 million cost of synergies. We have executed the first tranche related to corporate G&A cost reductions, and we are on track to deliver 1/3 of the total synergies in year 1. We're also working hard to deliver commercial synergies.
And last week, the [ Wake ] Cerebral business of SPX 1 is first order for an ITT Bodeman Twence pulp, well done, Rudin and team and Rodolphe, I expect more. Finally, as part of our capital allocation strategy, we continue to cultivate and be active on smaller-sized M&A opportunities. In addition, in March, we also deployed $100 million towards share repurchases. Moving on to guidance. Today, we initiate on the new basis, our full year adjusted EPS guidance with a range of $7.70 to $8, up 9% at the midpoint.
We're guiding to 37% revenue growth and 5% organic growth at the midpoint with a book to be above 1, and we expect SPX FLOW to contribute low-teens net adjusted EPS accretion. This guidance based on the profitable growth ITT has delivered over several years. Let us review our top line growth trajectory, since 2023 on Slide 4. Over the past 3 years, we have delivered outstanding top line growth with orders and revenue up over 9% on average every year and we expect the strong growth trends to continue in 2026, both by market share gains in our legacy businesses and the contribution of SPX FLOW.
Insicity, for example, as defense spending ramps up, we've been awarded large multi contracts like F-35 and RSS in the U.S. and ground vehicles, radar and precision-guided systems in Europe. We're well positioned to capture a significant portion of the incremental future spend out of our Winter facility in Germany. During my recent visit there, I sit set down with our project managers who are collaborating with European contractors on the development of customized connectors for new decide applications, well done Marco and June on fostering this level of customer intimacy.
In MT, our KONI business grew more than 30% over the last 3 years to become a $200 million platform for growth and the shock absorb leader for high-speed trains in China. Moreover, our friction business continues to counter platforms and win market share as demonstrated by the Q1 frictional outperformance of over 1,400 basis points. At the end of last year, friction reached 32% of the global auto OE market and the share gain journey continues. Flow Technologies has been growing at a 15% revenue CAGR since 2023, in addition to the 12% organic growth and a 61% total revenue growth in Q1 this year.
We continue to differentiate our flawless project execution as demonstrated by vans growth of 44% with a book-to-bill over 1.2. Moving to backlog we have nearly doubled it in the last 3 years, and it will continue to grow in 2026 as we strive towards a book-to-bill above 1 this year as well. With that, let me now turn the call over to Emmanuel to discuss Q1 results in detail on Slide 5.
Emmanuel Caprais: Thank you, and good morning. As Luca highlighted, we kicked off the year with a very strong quarter. In Q1, we delivered outstanding growth across the business in orders, revenue, margin and EPS. Our teams delivered $1.2 billion in revenue up 33% in total and 11% organically. CCT grew 17% organically, fueled by strength in aerospace and defense and industrial, which were up approximately 20%. We're also realizing the benefit of the Boeing contract renewal. Flow Technology grew 61% in total and 12% organically, driven by strong project shipments including [ venue ], which is up 44% and short cycle market share gains, especially in valves, which is up 19%.
MT grew 5% organically, a significant achievement in a down market. Friction OE outperformed global automotive production by over 1,400 basis points with all regions above 1,000 basis points. NXPX FLOW added 17 points of growth to IT. On profitability, operating income grew 42% and margin expanded 130 basis points, primarily driven by strong operational performance in our legacy businesses and the XP XO contribution. MT operating income grew 22% for a margin of 21.1% as the team drove net productivity of 220 basis points. Flow Technologies expanded margin 100 basis points to 23.7%, driven by price and volume leverage. CCT delivered 20% income growth to a margin of 19.3%, driven by aerospace volume growth and Boeing contract benefits.
As previously stated, intangible amortization expense related to acquisitions is now excluded from adjusted operating income, including in the segment. EPS of $1.98 on the new basis was up an outstanding 25% versus the prior year. You will note the immediate net accretion of the XPX Flow acquisition. Lastly, free cash flow of $14 million was impacted by $71 million of onetime acquisition-related expenses. Excluding these impacts, free cash flow was up 10% year-over-year. Let's now turn to the Q1 EPS bridge on Slide 16.
The 25% EPS growth was primarily driven by strong operational performance delivered by all businesses compounded by the month 1 net contribution of XPX FLOW Included in the XPX FLOW contribution is income from operations, partially offset by the higher interest expense and tax rate as well as the dilution from the December equity issuance and the equity given to Lone Star as part of the acquisition consideration. There were 4 additional working days in Q1 versus the prior year that will be reabsorbed in Q4. Finally, we continue to invest in strategic programs such as VIDAR, FLRAA, our Friction high-performance segment and the Geopad to sustain growth for the long term.
On to Slide 8. to discuss our 2026 outlook. With the XTX Low acquisition closed, we are now initiating our full year outlook. We expect 37% total revenue growth and 5% organic at the midpoint driven by aerospace and defense demand, strength in both Flow projects and short cycle and continued friction OE outperformance following an outstanding Q1. Contribution from previous acquisitions continue to be ahead of expectations. We expect to deliver roughly 70 basis points of margin expansion to approximately 20% at the midpoint fueled by top line growth, favorable price cost and productivity gains. We expect XPX Flow to deliver high single-digit revenue growth in 2026 and net adjusted EPS accretion in the low teens.
Cost synergies are expected to be approximately $15 million in 2026. Regarding the Middle East. As a reminder, our overall exposure to the region is approximately 4% of total revenue and the conflict had minimal impact in our Q1 results. Finally, on cash, we expect to generate free cash flow of roughly $560 million at the midpoint resulting in a free cash flow margin between 10% and 11%. Now let's move to Slide 9 to finish with the EPS outlook detail. As you can see, the 9% EPS growth at the midpoint, much like Q1 will come from our differentiated execution comprised of above-market growth and productivity savings compounded by the XTX FLow accretion.
The XTX Flow contribution is net of higher interest expense due to the $2.9 billion debt we contracted in March as well as a higher combined tax rate of 24.9%. It also includes a projected 90 million share count over the next 3 quarters. We will continue to invest part of the incremental profit generated to fund long-term growth initiatives. I'd now like to briefly discuss our Q2 outlook. EPS is expected to be up high single digits in Q2 compared to the prior year. We anticipate organic revenue growth in the mid-single digits. With Flow Technologies in the low double digits organically, CCT in the mid-single digits and empty in the low single digits.
Operating margin should expand by around 50 basis points compared to the prior year and approximately 20%. Interest expense is expected to increase meaningfully due to the acquisition of XPX Flow. Let me now turn the call over to Luca to wrap up on slide.
Luca Savi: Thanks, Emmanuel. A few points before Q&A. As you can see, we have pumped up for 2026. Our legacy business is firing on all cylinders. In Q1, we delivered 13% of this growth, 16% revenue growth and continued margin expansion. SPX FLOW provided a boost with 5% orders growth in 14% revenue growth and the fast start in synergy capture. This is our strategy in action. Organic value creation through market share gains and relentless execution driving sustained margin expansion compounded by M&A. This is the commitment we made during our Capital Markets Day, and it remains a commitment today. We do what we say and Q1 proves it. This is ITT.
Before opening the line for Q&A, there is 1 more thing that we'd like to share. Is made even more better with by the great results that we shared with you all today. Emmanuel, our CFO for the last 6 years and my partner here at ITT for almost 14 years, Estonia is ready to take a break and will be leaving the company. Dear Emmanuel, thank you for everything you've done. As I told you, in the last 14 years, I probably spend more time with you than with my wife. I do not know if this talks more about our partnership or about my marriage. It has been a fantastic ride, full of challenges and achievements.
I have so many memories from the very first day we met. We have always been there on my side, in the perform and in a transformed journey, and we transformed this company indeed. In these 14 years, you made us better. I always knew I could count on you. We have been a real thought partner, a copilot to discuss with to work with, to debate, agree, disagree with a real partner to bunk with. In these 14 years, you made me much, much better. I'm so grateful as I was very fortunate to find you that Day Milan and work with you side-by-side for 14 years, gratitude.
Emmanuel, we seek around in an advisory role until the end of June, helping to ensure a seamless transition for us. Mike Samineli, Vice President, Treasurer, Chief Tax Officer and Assistant Secretary, has been appointed to serve as interim CFO. Thanks, Mike. To the people connected to our call, thank you for joining us today. As always, I appreciate your time and continued interest in ITT. Kathy, please open the line for Q&A.
Operator:[Operator Instructions] Our first question comes from the line of Joe Giordano with TD.
Joseph Giordano: Yes. Emmanuel, I know you don't like the spotlight, but you've been a great partner for all these years. So I think we're all set to see you go. So best of luck to you in the next.
Emmanuel Caprais: Thank you, Joe.
Joseph Giordano: Let's start -- Luca, you never know everything about a deal, I guess, until you own it. So as SPX came into the portfolio, what was like a pleasant surprise to you versus what your initial views were? And was there anything there that you kind of realized, all right, maybe we have a little bit more work to do, maybe this was a little different than what we thought.
Luca Savi: That's -- this is very true, Joe. I think that we don't forget that we cultivated the SPX FLOW for 3 years. So we visited all the plans. We went deep dive on the due diligence. So we really have met many people. And therefore, we were able to find many things before the acquisition. I would say 1 thing that surprised me even more positively as they've been able to walk the plant to talk to the people on the shop floor, for example, in Delavan is to see the commitment and the engagement of our workers in the Delavan plant, in the Rochester plant, in the Palmyra plant in Pennsylvania.
So the engagement of the workforce on the shop floor is something that I was able to experience and definitely surprised me positively. I also was positively surprised by the growth potential that we have on the revenue synergies. We work hard on those. It's going to take more time because those are revenue synergies. But definitely, there are there and more and these are opportunities. Same on the cost side. So I think that all of those is good and you start seeing good in the results, good orders growth 5%, revenue growth 15% accretive to EPS, good pipeline visibility and moving fast on the synergies.
I think that from a cultural point of view, similar, but there are aspects that they do differently that we -- both of us, we will have to adjust.
Joseph Giordano: Yes. And then maybe your defense business has been doing great for a while now. If we have a larger trend here over the next several months towards like an ending of global hospitalities, does that create any sort of potential air pocket for anywhere?
Emmanuel Caprais: No, we don't see that, Joe. I think that we are -- we have a portfolio that is broad in defense. And so we are on a lot of different applications. And so there's a lot of defense modernization. There's a large defense monetization trend that is happening both in the U.S. and in Europe. And we think that this is here to stay, and this is a long-term trend.
Operator: Your next question comes from the line of Julian Mitchell with Barclays.
Julian Mitchell: And wish you all the best Emmanuel. If we think about the first question really around selling days dynamics? Sorry for the fiddly question, but maybe help us understand how much of a contribution that was to sales or EPS in the first quarter -- and how we should think about the seasonality of EPS over the balance of the year as that selling days tailwind goes into reverse.
Emmanuel Caprais: Yes, Julian. So the contribution of the additional 4 selling days was around 5% -- 5 points of growth in the quarter from a revenue standpoint and then a little less than $0.10 from an EPS standpoint in Q1. When we think about the cadence of EPS, I would say that the next few quarters are going to be around the $1.90 to $1.95 EPS for Q2, Q3 and Q4.
Julian Mitchell: That's really helpful. And then my follow-up would just be around if we're thinking about operating margins kind of moving around a lot year-on-year, I think you guided up 50 bps in Q2. They were up over 100 bps in Q1, and you've got a pretty wide margin guide range for the year as a whole. So maybe any sort of -- is there any phasing of investment spend to be aware of in the year? And what are you assuming for the flow acquired operating margin for the year as a whole, including those synergies you mentioned, please?
Emmanuel Caprais: Yes. I would say that from an operating margin standpoint, we expect continued progression during the year, and this is because of obviously the productivity improvements that we're driving in all the businesses, as well as some of the price actions that we're taking and that will have a full impact starting in Q2. So as you've come to expect of ITT we drive margin progression year-over-year that is really key to our success. And then from an SPX Flow standpoint, we expect -- so we had a really strong margin in Q1. And the reason for that is that we only had the month of March in there and March had 5 weeks which is unusually large.
So a disproportionate impact in the quarter. We don't expect that margin to be the same in Q2, Q3 and Q4. However, we do expect that margin will continuously improve as we roll out our productivity plan as well as our growth initiatives.
Operator: Your next question comes from the line of Jeff Hammond with KeyBanc Capital Markets.
Jeffrey Hammond: Best of luck to Emmanuel. We're sad to hear you're leaving as it sounds like Luca, you are, too. Just staying on SPX FLOW, can you dig in a little more on the order trends in that business just from a market standpoint? And then it just -- it seems like shorter term, you may be getting some early revenue synergies. But just the opportunities around leaning in on commercial excellence and starting to drive out growth because I think what are the early concerns with the acquisition was the legacy growth rate? And how do you accelerate that?
Luca Savi: Sure. Thanks, Jeff. So when you look at the orders growth was a good order growth of 5%. Now when that is overall for SPX FLOW in the quarter. When you look at the different businesses, you have Waukesha Cherry-Burrell, our Agini pumps, their orders were up double digit. Nutrition & Health Solutions, their orders were up 3%, mixers up 7% and the pumps up 2%. So all the different businesses were up actually in terms of orders. And all of the 4 businesses were up also in revenue with Nutrition & Health and Waukesha double-digit and mixer and pump in the low single digit. So overall, 15%, okay?
We expect also the book-to-bill for the full year to be above 1 for SPX FLOW. Now this is very similar to what we said at the very beginning because during the due diligence, we saw that pipeline and we believe in this growth. Now this, to be honest, has got nothing to do with -- this is the good work that the SPX FLOW employees have done since nothing really has changed during the month of March. Now if you top this off together with our approach, going after the 100%, not the 80-20, be more granular and be more decentralized, I would expect that performance to continue to improve.
Andrew Obin: Okay. Great. And then just from a modeling standpoint, Emmanuel, you gave kind of the organic trends in the 2Q by segment, but how should we think about that within the 4% to 6%? And then just on the tax rate, is there an opportunity to bring that down over time? That was a little bit of a surprise that the tax rate is going up?
Emmanuel Caprais: Yes. So for the full year, Jeff, -- we expect both IP and CCT to lead the charge from an organic growth standpoint in the high single digits. And then Motion Technologies in the low single digits for the full year because, obviously, there's a decline in the automotive production. And so -- and the friction is really outperforming very, very nicely as we saw in Q1, but nonetheless, there's a global production that is down. And then from a tax rate standpoint, so today, we stand at almost 25% at 24.9. This is the impact. This is directly the impact of SPX Flow.
And so Mike and the team will work on tax opportunities in order to bring that tax rate down. But I think with limited impact in 2026 and more to come in the years after.
Operator: Your next question comes from the line of Nathan Jones with Stifel.
Nathan Jones: I'll add my best wishes to Emmanuel. First question here on CCT margins. It seems over the last few years, you guys have done the work on improving the value proposition to customers there, even -- I mean I'm talking outside of the aerospace stuff, improving the productivity, improving the on-time delivery. So I guess my question is about value-based pricing in CCT and where you are in that process outside of the commercial OEM stuff? And how much do you think that could contribute to margins over the next 2 or 3 years?
Luca Savi: Thanks, Nathan. This is fair. And I think that price has been also a good tailwind when you look at CCT in the last couple of years, exactly for the reason that you said. The price negotiation with Boeing that we closed last year is a natural proof of what you just said. Having said that, I think that there is more to do on the pricing on the CCT front, and this is what the team is working on. I would say the largest opportunity to be fair Nathan is probably in Cesare.
So I think the Kesariais providing a great service to our customers, and they think that there is more to be done specifically in that part of CCT.
Nathan Jones: I guess a follow-up question. [ Maris ] interested in revenue synergies out of this kind of deal, and I'm sure there is a lot of plans going on there. I know they take longer to generate. So I'm not going to ask you what they contribute to 2026. But maybe if you could just provide a little bit more color on the things that you're working on where you see the opportunities to generate revenue synergies and kind of if you have any target over time of what that could add to the overall growth for...
Luca Savi: Sure. Let's try to be specific. So if you -- when I was in Delavan together with Rudy and we on the shop floor going around, -- we know that the Wacker doesn't have the twin screw pumps. As a matter of fact, we were spending money in Waukesha to really develop a new twin screw pumps. We did the assessment, Bornemann creams are super good, very well recognized in the market and therefore, Waukesha will sell Bornman wins screw pumps, that was just a small order that we had, but it's a start. And not only they will start selling but then we will also localize our production of the twin screw in our client in the bank.
That is a specific activity that I'm sure will deliver quite a bit of synergies. Latin America on the mixing front. Nikos our leader in Latin America he is working hard together with the leaders of the different units in -- from SPX FLOW. And I'm sure that as we localize more the decision-making, we speeded up the decision and the action in the region in Latin America, and we get more intimate with the customers just the fact that we are there. that will provide good revenue synergies. The Middle East is another area where we are working on. But as you can imagine, that probably at this point in time is more planning and discussion.
And then there are potential synergies happening just because now we have a base in Xidu, Shanghai, where we never had a plan before in the local -- in the legacy Flow Technologies in the legacy IP and a plant in Poland where we never had in Europe a low-cost base manufacturing. So we are working hard on all those fronts, Nathan.
Operator: Your next question comes from the line of Vlad Bystricky with Citigroup.
Vladimir Bystricky: Good morning, guys. And I echo the sentiment. Congratulations to Emmanuel. We'll miss working with you tremendously, obviously. I guess my first question -- just when I look at the organic growth outlook for the year, the plus 4% to 6%, it seems very consistent with what you were thinking coming into the year. But -- can you talk about whether there's been any sort of moving pieces underneath that businesses or regions that are trending better or worse versus 3 months ago? And I guess specifically, whether you're baking in any incremental headwinds in the Middle East associated with conflict there?
Luca Savi: Sure. No major change from what we were expecting, Vlad -- and now as a matter of fact, sure, the Middle East is something to watch. But now just to give you a perspective of the Middle East, which is 4% of total year revenue, we have an impact in Q2, but the impact in Q2 is probably less than 1% of the IC revenue. It's probably between $0.5 million and $0.7 million of the sales when it comes to the Middle East. I think that there is a very strong performance in the short cycle when you look at the spare parts, the baseline. And I want to tell that growth is not nominal growth. That is real growth.
This is volume growth. There was a little bit of price, but that was minimum. And then also the connectors industrial sales, both with the OEM and distribution and Vlad those are market share gains in Flow and also on the Connector side.
Vladimir Bystricky: That's really helpful, Luca. And I guess just following up on that 1 on the industrial connectors -- can you -- when you talk about market share gains there, can you give us any more color on what specific end markets or verticals you're seeing share gains and any notable regional differences to call out there?
Luca Savi: I think there is a very good performance on the -- in Asia Pacific, where the team has worked really hard on the medical side and Medical has been growing incredibly hard and then also on the HVOR. So Asia Pacific and China has been definitely a good tailwind whereas I would say, when you look at Europe on the orders front, it's really working hard on the defense because of the defense ramp-up that is happening in Europe. And in North America, you have really the distribution is wider. So it will be difficult really to really pointing out to any specific market.
Operator: Your next question comes from the line of Brad Hewitt with Wolfe Research.
Bradley Hewitt: So you mentioned that your friction business outgrew auto builds by 1,400 basis points during the quarter. Curious if you expect that outgrowth versus build to compress through the rest of the year? Or could there perhaps be upside this year is the typical algorithm of 400 to 500 basis points of outgrowth?
Luca Savi: I would say, listen, is an exceptional performance. and allowed us in a market that was down 3.4% in the quarter actually to grow, show the resilience of the team, the resilience of the business. I would say, for the time being, this is only 1 quarter -- so I would say we stick to our usually forecast of an outperformance between 500 and 700 basis points for the full year. What I really like about this outperformance was that it was spread. It was in every region. Was in China. It was in Europe where we already had a high market share and was also in North America.
And last but not least, is we won 39 platforms electrified platforms in the quarter, which will feed future market share gains. And whilst production will be down this year to 91 million vehicles. The production of hybrid and the production of EV will actually grow double digit, and this is where we are particularly strong.
Bradley Hewitt: Okay. Great. And then as we think about at the total company level, can you walk through your assumptions for the year in terms of the net price cost equation as well as some of the moving pieces related to tariffs and material inflation?
Luca Savi: Sure. On the price cost, you really have the usual dynamic. In terms of you have a very good price cost equation when it comes to IP and CCT because we've got more pricing power. Less so in motion technology where we feel the price pressure. But overall, for the full year, at ITT, the price cost is going to be positive. Now when you look at the tariff the situation is very fluid. I'm pretty sure that the next few weeks is going to be different than what it is today.
Now we are actively pursuing any opportunity to recover any targets that we already pay, but we think that process will be long and who knows how it's going to pan out. And then -- what I would like to highlight is that as we demonstrated in 2025, we were able to offset that all the tariffs with commercial and productivity actions. So we think that, that will be a similar scenario in 2026.
Operator: Your next question Matt Summerville with D.A. Davidson.
Matt Summerville: Echo similar sentiment, Emmanuel. Just 2 quick ones for me. Can you talk about the core sort of industrial process funnel as you look ahead relative to maybe what you were seeing 90 days ago or a year ago, whatever makes sense to drive the most informed sort of comparison as to how that's evolving? And then I have a follow-up.
Luca Savi: Sure, Matt. The funnel is very healthy. It's elevated and is actually up year-over-year, Matt, is also up sequentially to -- now what is interesting is that then if you want to go a little bit more granular and you look at the region, I would say the region where the funnel is up the most is North America, which is interesting because this is where we had our largest orders growth in North America. And despite that, the panel is up tremendously. -- which tells us something about the replenishment speed of the opportunity in North America.
The funnel is down when you look at the Europe and the Middle East for obvious reasons because all the commercial conversation, the investment that we had with Saudi Aramco, for example, all of those are frozen. But we expect those to start quickly if the situation normalizes.
Matt Summerville: And then I was wondering if you could help sort of cadence out the flow accretion you expect for the year if we were at $0.04 in Q1. Obviously, you're assuming something more conservative on the look ahead out 3 quarters. So maybe help me understand kind of the logic behind that. Maybe it's just conservatism but ultimately, how we should be thinking about that cadence?
Emmanuel Caprais: Yes. So when you think about Q1, as I mentioned, in Q1, you have an outsized contribution from SPX Flow. And the reason for this is because basically March is so disproportionate compared to the rest of the quarter. And then you also have less interest expense as well as a smaller share count. So as you ramp that in Q2, Q3 and Q4, you get your interest that increases roughly by $30 million a quarter. You get your share count that goes to 90 million shares.
And then so as a result, SPX FLOW continues to deliver really strong performance but it's kind of impacted by these variables and the normalizing of the fact that we don't have just 1 month with fibre. So I would say the continued progression of the performance of SPX FLOW from a growth standpoint, as Luca said, but also from a margin standpoint. And so -- and preparing the ground for further productivity as we hit '27, including cost synergies.
Operator: Your last question comes from the line of Scott Davis with Melius Research.
Unknown Analyst: It's Jake on for Scott. Congrats on getting the SPX deal across the goal line and congrats to manual as well. We appreciate all your help over the years and hopefully you'll be on the beach in a few months with a nice Cavern actually, I don't know what your drink is, but just on the Middle East I know you touched on -- you made a few comments on that.
But I'd have to imagine when you start turning on some of those production has been shut in, you're going to have a lot of valves and pumps and other products that probably won't work as they should and to say nothing on some of the infrastructure that's been destroyed. So I guess, is there a way to think about what the upside might be on the other side of this conflict?
Luca Savi: Yes, what you said is absolutely true. So I think that we expect that the investment that was supposed to happen, the conversation to start super quick. And then there should be some good service world that comes out of it. And this is where our team headed by Calin by Harland by Handy to be able to perform because the service business is actually very, very good. and the Saudi expansion that we made will be perfect at that time. One thing also I want to remind is the incredible performance also that we had of our Habonim valves in Israel.
As despite what's going on and the war, this business has been able actually to grow orders despite the war to grow revenue despite the war. And sure, we had pressure on the margin because the cost of the containers, because of the transportation, et cetera, and the disruption on the operations, as you can imagine, but a great performance from the Habonim team over there in the Middle East as well.
Unknown Analyst: Okay. That's good color. And just a different topic, I was surprised to hear you mention small bolt-on deals on the call, just given all you have on your plate with SPX and it seemed like a very deliberate comment, but I'm not sure if that's an indication that maybe there's some deals in your pipeline that you feel are actionable. So do you feel like you have the organizational capacity to be able to take on some more from here?
Luca Savi: Yes, Jake. Yes, we do. Because when you think about the SPX FLOW, it involves our business units that outstanding the terms of SPX Flow, of course, will be integrated with our pumps business. But there are areas where the business and the business leaders are running very well, they got the capacity to really add to it. Think about Habonim. Habonim is performing incredibly well. 4% revenue growth, book-to-bill of 1.2. The fundamentals are strong. They've been practically untouched by the SPX Flow acquisition. So their management team, that business have the capacity to really to do a little bit more. And this is also why we kept our debt ratio to 2.7 to really have that flexibility.
So we got the financial capacity to do small bolt-ons and also the management capacity. Obviously, they're going to be small in size, right? Nothing large.
Operator: Thank you. This ends today's teleconference. Please disconnect your lines at this time, and have a wonderful day.
Should you buy stock in ITT right now?
Before you buy stock in ITT, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and ITT wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $473,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,204,650!*
Now, it’s worth noting Stock Advisor’s total average return is 950% — a market-crushing outperformance compared to 203% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of May 6, 2026.
This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.
The Motley Fool has positions in and recommends ITT. The Motley Fool has a disclosure policy.
ITT (ITT) Q1 2026 Earnings Call Transcript was originally published by The Motley Fool
View Comments
