ITT Raises Guidance as SPX FLOW Integration Gains Traction
Organic growth accelerates, leverage falls ahead of schedule, and defense orders surge
ITT · Earnings Call · 2026-08-06
Strong Quarter, Accretive M&A
ITT delivered a record second quarter, with orders up 53% and revenue up 51%, both including 13% organic growth. Adjusted EPS rose 18% to $2.08, and the company raised its full-year outlook for the second time this year. The story is increasingly about the successful integration of SPX FLOW, which contributed a full quarter of results and remains on track to deliver $80 million in synergies.
Our ITT has delivered strong performance across the portfolio through flawless execution and the realization of benefits from our acquisitions, building a solid foundation for the remainder of 2026 and beyond.
Luca Savi, CEO, credited the "flawless execution" and early integration wins: “We are working very closely with the SPX Flow team... we still haven't closed the deal yet. But I can tell you that when you look at the nutrition and health, I think that when you look at many of the customers that they're working with, they are in a good CapEx cycle.” — Luca Savi, Chief Executive and President · 2026-02-05 The company has already paid down $124 million in debt, bringing leverage to 2.5x — six months ahead of its original commitment.
The SPX FLOW Playbook
SPX FLOW revenue grew 5% in the quarter and 9% year-to-date, with orders up 9% and a book-to-bill of 1.13. Management is applying its "100% approach" to the portfolio, moving beyond 80/20. “I would say the area for improvement that we have in SPX FLOW and in the lean is really to ensure that the lean is entrenched in the DNA in the cell.” — Luca Savi, Chief Executive Officer and President · 2026-08-06 The company sees opportunities in Nutrition & Health, mixers, and pumps, and is already working on revenue synergies, from Bornemann hygienic pumps sold through Waukesha Cherry-Burrell's channel to regional expansion in Latin America and the Middle East. The acquisition is also driving margin expansion. While Flow Technologies margin was diluted to 21.4% by the full quarter of SPX FLOW, management expects sequential improvement through the year as cost synergies ramp. “At 21% the legacy business in Flow Technologies is up 70 basis points, and we're already a great benchmark when you look at the market.” — Luca Savi, Chief Executive Officer and President · 2026-08-06
Defense and Connectors Fire
CCT was the standout, with organic orders up 59%. kSARIA, the fiber-optic cable assembly business, posted orders up 168%, driven by multiyear defense bookings on fighter jet and night vision programs. Recognising the need to secure supply for connectors, ITT acquired Aerospace Contacts, a small but "highly strategic" bolt-on. “This is exactly why we made the acquisition of Aerospace Contacts, right? We were concerned of being able to feed the demand and the growth on the connector side.” — Luca Savi, Chief Executive Officer and President · 2026-08-06 The company also sees continued strength in July, signalling a durable defense tailwind.
Deleveraging and Cash
Free cash flow year-to-date was $176 million, impacted by $71 million in one-time acquisition costs; excluding those, it was up 15%. The company raised its free cash flow guidance to $565 million and expects leverage to fall to ~2.3x by year-end. The balance sheet is solid: while effective net cash turned deeply negative due to the SPX FLOW deal, cash generation is now ramping.Total Revenue for the company reached $1.5 billion in Q2, and operating margin expanded 40 basis points. The Flow Technologies segment alone grew 21% organically, while Aerospace Contacts adds a new vertical to support productivity initiatives.
Outlook and Risks
Management raised full-year organic revenue guidance to 5-8% and EPS to $8.22 at the midpoint, a $0.37 increase. However, the stock has pulled back 4.1% over the past 90 days and sits only ~6% below its April high, reflecting valuation concerns at ~25x trailing operating earnings. Tariff refunds were immaterial at $0.5 million, but the company is actively pursuing recoveries. Middle East order delays remain a watch item, though the funnel is up 34% year-over-year. Investors who have followed ITT through its cost synergy execution will recognise the pattern. As Luca noted in the prior quarter, “I think that one 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” — Luca Savi, Chief Executive Officer and President · 2026-05-06 — that engagement is now translating into tangible results.