Q1 2026 ITT Inc Earnings Call

May 6, 2026

Speaker #1: If at any point your question has been answered, you may remove yourself from the queue by pressing *11 again. We ask that you please pick up your handset to allow optimal sound quality.

Speaker #1: It is now my pleasure to turn the call over to Carleen Savage Vice President, Investor Relations, and FP&A, you may begin.

Speaker #2: 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.

Carleen Salvage: Thank you, Kathy, and good morning. Joining me in Stamford today are Luca Savi, Chief Executive Officer and President, and Emmanuel Caprais, Chief Financial Officer. Today's call will cover ITT Inc.'s financial results for the 3-month period ended 4 April 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, including those described in our 2025 annual report on Form 10-K and other recent SEC filings. Except where otherwise noted, the Q1 results we present this morning will be compared to Q1 of 2025 and include certain non-GAAP financial measures.

Speaker #2: Today's call will cover ITT's financial results for the three-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.

Speaker #2: Actual results may differ materially due to several risks and uncertainties, including those described in our 2025 Annual Report on Form 10-K and other recent SEC filings.

Speaker #2: 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.

Speaker #2: 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.

Carleen Salvage: 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 Q4 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.

Speaker #2: 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.

Speaker #2: In 2025, the impact of this reporting change on earnings per share was 13 cents in Q1 and 47 cents for the full year. All adjusted EPS figures presented going forward will be on this basis.

Speaker #2: 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.

Carleen Salvage: 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.

Speaker #2: With that, it is now my pleasure to turn the call over to Luca, who will begin on Slide 3.

Speaker #3: Thank you, Carleen, and good morning. Before I begin, I wanted to recognize our employees across ITT for delivering a very strong start to the year.

Luca Savi: Thank you, Carleen, 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 by our 25% EPS growth in the quarter. We are truly pumped up. Here are some highlights. We grew orders 26% at 8% organically. We grew revenue 33% and 11% organically. We expanded margin by 130 basis points, and we delivered 25% adjusted EPS growth.

Speaker #3: 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.

Speaker #3: 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 by our 25% EPS growth in the quarter.

Speaker #3: We are truly pumped up. Here are some highlights. We grew orders 26% at 8% organically. We grew revenue 33% and 11% organically. We expanded margin by 130 basis points and we delivered 25% adjusted EPS growth.

Speaker #3: 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.

Luca 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. 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%. 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 3% as friction outperformed global vehicle production by more than 1,400 basis points. To top it off, Flow Technologies revenue was up 61% or 12% organically.

Speaker #3: 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%.

Speaker #3: 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 3%.

Speaker #3: 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.

Speaker #3: The team delivered higher project sales including from Svaneoy, which were up 44%. Well done, Glenn. Show Cycle also grew 10% due to market share gains in all product categories.

Luca Savi: The team delivered higher project sales, including from Savona Oils, which were up 44%. Well done, Glenn. 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 show cycle, including baseline pumps, aftermarket, and valves, up 24%, continues to benefit from a GLP-1 project that keeps expanding in scope. Friction continued to gain market share with significant platform awards, including in the high-performance segment. Last but not least, our book-to-bill was 1.09.

Speaker #3: 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.

Speaker #3: In Flow Technologies, we delivered 44% orders growth and 7% organically driven by share gains in Show Cycle including baseline pumps, aftermarket, and valves. Valves up 24% continues to benefit from a GLP-1 project that keeps expanding in scope.

Speaker #3: 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.

Speaker #3: 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.

Luca Savi: 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%, MT delivered 130 basis point 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 2 March, we closed the SPX FLOW acquisition one month ahead of schedule and with a leverage ratio comfortably below 3 at 2.7. The newly created Flow Technologies segment boasts nearly $3 billion in revenue and is a global flow leader with premier brands in pumps, valves, mixers, and other process solutions.

Speaker #3: At 21.1%, MT delivered 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 deployment.

Speaker #3: On March the 2nd, we closed the SPX Flow acquisition one month ahead of schedule and with a leverage ratio comfortably below 3 at 2.7.

Speaker #3: The newly created Flow Technologies segment both nearly $3 billion in revenue and is a global flow leader with premier brands in pumps, valves, mixers, and other process solutions.

Speaker #3: On the first day, the entire ITT leadership team actively participated in person to town hall meetings around the world with SPX Flow employees. We laid out our vision and our expectations and answered questions from highly engaged employees.

Luca Savi: On the first day, the entire ITT leadership team actively participated in person to town hall meetings around the world with SPX FLOW employees. We laid out our vision and our expectations and answered questions from highly engaged employees. I was fortunate enough to be in Delavan, Wisconsin, together with Rudy, our Waukesha Cherry-Burrell 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, at our two other sites in Rochester, New York, and Palmyra, Pennsylvania. Their team has been working hard to improve material flows and overall equipment efficiency. Bartek, Wendy, Rudy, and I also share future growth plans.

Speaker #3: I was fortunate enough to be in Delavan, Wisconsin, to get with Rudy, our Waukesha Cherry Borel 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.

Speaker #3: I also experienced this enthusiasm with Wendy, our mixing solutions leader, and our two other sites in Rochester, New York, and Palmyra, Pennsylvania. Her team has been working hard to improve material flows and overall equipment efficiency.

Speaker #3: Bartek, Wendy, Rudy, and I also shared future growth plans and what's still early in the year I'm heartened by the orders and sales growth we deliver in the first quarter to achieve high single-digit revenue growth for 2026.

Luca Savi: While still early in the year, I'm heartened by the orders and sales growth we deliver 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 synergies. We've executed the first tranche related to corporate G&A cost reductions, and we're on track to deliver a third of the total synergies in year one. We're also working hard to deliver commercial synergies. Last week, the Waukesha Cherry-Burrell business of SPX won its first order for an ITT Bornemann twin-screw pump. Well done, Rudy and team. Rodolfo, I expect more. Finally, as part of our capital allocation strategy, we continue to cultivate and be active on smaller size M&A opportunities.

Speaker #3: When it comes to synergies, the Flow Technologies team has been hard at work identifying and implementing actions to secure the $80 million cost synergies.

Speaker #3: We've executed the first tranche related to corporate G&A cost reductions, and we're on track to deliver a third of the total synergies in year one.

Speaker #3: We're also working hard to deliver commercial synergies. And last week, the Waukesha Cherry Borel business of SPX won its first order for an ITT Bourneman twins crew pump.

Speaker #3: Well done, Rudy and team. And Rodolfo, I expect more. Finally, as part of our capital allocation strategy, we continue to cultivate and be active on smaller-sized M&A opportunities.

Luca Savi: 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 $8.00, up 9% at the midpoint. We are guiding to 37% revenue growth and 5% organic growth at the midpoint with a book-to-bill above 1. We expect SPX FLOW to contribute low teens net adjusted EPS accretion. This guidance builds 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.

Speaker #3: In addition, in March, we also deployed 100 million dollars 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.

Speaker #3: Up 9% at the midpoint. We're guiding to 37% revenue growth and 5% organic growth at the midpoint with a book-to-bill above 1. And we expect SPX Flow to contribute low teens net adjusted EPS accretion.

Speaker #3: This guidance builds on the profitable growth ITT has delivered over several years. Let us review our top-line growth trajectory since 2023 on slide 4.

Speaker #3: Over the past three years, we have delivered outstanding top-line growth with orders and revenue up over 9% on average every year. And we expect this strong growth trend to continue in 2026, bolstered by market share gains in our legacy businesses and the contribution of SPX Flow.

Luca Savi: We expect this strong growth trend to continue in 2026, bolstered by market share gains in our legacy businesses and the contribution of SPX FLOW. In CCT, for example, as defense spending ramps up, we've been awarded large multiyear contracts like F-35 and RSS in the US 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 Weinstadt facility in Germany. During my recent visit there, I sat down with our project managers who are collaborating with European contractors on the development of customized connectors for new defense applications. Well done, Marco and Junaid, on fostering this level of customer intimacy.

Speaker #3: In CCT, for example, as defense spending ramps up, we've been awarding large multi-year contracts like F35 and RSS in the US and ground vehicles, radar, and precision guided systems in Europe.

Speaker #3: We're well positioned to capture a significant portion of the incremental future spend out of our oneset facility in Germany. During my recent visit there, I sat down with our project managers who are collaborating with European contractors on the development of customized connectors for new defense applications.

Speaker #3: Well done, Marco, and Junaid on fostering this level of customer intimacy. In MT, our Coney business grew more than 30% over the last three years to become a $200 million platform for growth and the shock-absorbing leader for high-speed trains in China.

Luca Savi: 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 absorber leader for high-speed trains in China. Moreover, our friction business continues to conquer platforms, and win market share is demonstrated by the Q1 friction OE 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 the 61% total revenue growth in Q1 this year. We continue to differentiate our flawless project execution, as demonstrated by Zvenihov's growth of 44% with the book-to-bill over 1.2.

Speaker #3: Moreover, our friction business continues to conquer platforms and win market share as demonstrated by the Q1 friction OE outperformance of over 1,400 basis points.

Speaker #3: 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.

Speaker #3: In addition to the 12% organic growth and the 61% total revenue growth in Q1 this year. We continue to differentiate through our flawless project execution as demonstrated by Zvanio's growth of 44% with a book-to-bill over 1.2.

Speaker #3: Moving to backlog. We have nearly doubled it in the last three years. And it will continue to grow in 2026 as we strive towards a book-to-bill above 1 this year as well.

Luca Savi: Moving to backlog, we have nearly doubled it in the last 3 years. 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.

Speaker #3: With that, let me now turn the call over to Emanuel to discuss Q1 results in detail on slide 5.

Speaker #4: 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.

Emmanuel Caprais: Thank you. 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 Zvenihov, 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.

Speaker #4: Our teams delivered 1.2 billion dollars in revenue, up 33% in total, and 11% organically. CCT grew 17% organically, fueled by strength in aerospace and defense, and industrial.

Speaker #4: 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 Zvanioi, which is up 44%, and short-cycle market share gains, especially in valves, which is up 19%.

Speaker #4: 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.

Emmanuel Caprais: Friction OE outperformed global automotive production by over 1,400 basis points, with all regions above 1,000 basis points. SPX FLOW added 17 points of growth to ITT. On profitability, operating income grew 42% and margin expanded 130 basis points, primarily driven by strong operational performance in our legacy businesses and the SPX FLOW 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.

Speaker #4: And SPX Flow added 17 points of growth to ITT. On profitability, operating income grew 42%, and margin expanded 130 basis points, primarily driven by strong operational performance in our legacy businesses and the SPX Flow contribution.

Speaker #4: 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.

Speaker #4: 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 expens related to acquisitions is now excluded from adjusted operating income, including in the segment.

Emmanuel Caprais: As previously stated, intangible amortization expense related to acquisitions is now excluded from adjusted operating income, including in the segments. 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 SPX FLOW acquisition. Lastly, free cash flow of $14 million was impacted by $71 million of one-time 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 6. The 25% EPS growth was primarily driven by strong operational performance delivered by all businesses, compounded by the month 1 net contribution of SPX FLOW.

Speaker #4: 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 SPX Flow acquisition.

Speaker #4: Lastly, free cash flow of $14 million was impacted by $71 million of one-time acquisition-related expenses. Excluding these impacts, free cash flow was up 10% year over year.

Speaker #4: Let's now turn to the Q1 EPS bridge on slide 6. The 25% EPS growth was primarily driven by strong operational performance delivered by all businesses compounded by the month one net contribution of SPX Flow.

Speaker #4: Included in the SPX 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.

Emmanuel Caprais: Included in the SPX 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 SPX FLOW 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.

Speaker #4: There were four 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, FLAIRA, our friction high-performance segment, and the GEOPAD to sustain growth for the long term.

Speaker #4: Onto slide 8 to discuss our 2026 outlook. With the SPX Flow 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.

Emmanuel Caprais: Contribution from previous acquisitions continue to be ahead of expectations. We expect to de-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 SPX 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 details.

Speaker #4: Contribution from previous acquisitions continued 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.

Speaker #4: We expect SPX Flow to deliver high single-digit revenue growth in 2026 and net adjusted EPS accretion in the low teams. Cost synergies are expected to be approximately 15 million dollars in 2026.

Speaker #4: Regarding the Middle East, as a reminder, our overall exposure to the region is approximately 4% of total revenue and the conflict at minimal impact in our Q1 results.

Speaker #4: Finally, on cash, we expect to generate free cash flow of roughly 560 million dollars at the midpoint, resulting in a free cash flow margin between 10 and 11 percent.

Speaker #4: Now let's move to slide 9 to finish with the EPS outlook details. 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 SPX Flow accretion.

Emmanuel Caprais: 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 SPX FLOW accretion. The SPX FLOW contribution is net of higher ex-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.

Speaker #4: The SPX Flow contribution is net of higher interest expense due to the 2.9 billion dollar debt we contracted in March, as well as a higher combined tax rate of 24.9%.

Speaker #4: It also includes a projected 90 million share count over the next three quarters. We will continue to invest part of the incremental profit generated to fund long-term growth initiatives.

Speaker #4: 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.

Speaker #4: 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 MT in the low single digits.

Emmanuel Caprais: 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 MT in the low single digits. Operating margin should extend by around 50 basis points compared to the prior year in approximately 20%. Interest expense is expected to increase meaningfully due to the acquisition of SPX FLOW. I'll now turn the call over to Luca to wrap up on slide 10.

Speaker #4: 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 SPX Flow.

Speaker #4: Let me now turn the call over to Luca to wrap up on slide 10.

Speaker #5: Thanks, Emmanuel. Few points before Q&A. As you can see, we are 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.

Luca Savi: Thanks, Emmanuel. Few points before Q&A. You can see, we are pumped up for 2026. Our legacy business is firing on all cylinders. In Q1, we delivered 13% orders growth, 16% revenue growth, and continued margin expansion. SPX Flow provided a boost with 5% orders growth in Q1, 14% revenue growth, and a 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 our commitment today. We do what we say, and Q1 proves it. This is ITT. Before opening the line for Q&A, there is one more thing that I would like to share. It is made even more bittersweet by the great results that we share with you all today.

Speaker #5: SPX Flow provided a boost with 5% orders growth in Q1, 14% revenue growth, and the fast start in synergy capture. This is our strategy in action.

Speaker #5: 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 our commitment today.

Speaker #5: We do what we say and Q1 proves it. This is ITT. Before opening the line for Q&A, there is one more thing that we'd like to share.

Speaker #5: It's made even more bittersweet by the great results that we share with you all today. Emmanuel, our CFO for the last six years and my partner here at ITT for almost 14 years, has told me that he's ready to take a break.

Luca Savi: Emmanuel, our CFO for the last 6 years and my partner here at ITT for almost 14 years, has told me that he's 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 spent more time with you than with my wife. I do not know if this says 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. You have always been there on my side in the Perform and in the Transform journey, and we transformed this company indeed. In these 14 years, you made us better. I always knew I could count on you.

Speaker #5: And we'll be leaving the company. Dear Emmanuel, thank you for everything you've done. As I told you, in the last 14 years, I probably spent more time with you than with my wife.

Speaker #5: I do not know if this tells more about our partnership or about my marriage. It has been a fantastic ride full of challenges and achievements.

Speaker #5: I have so many memories from the very first day we met. You have always been there on my side in the perform and in the transform journey.

Speaker #5: And we transformed this company indeed. In these 14 years, you made us better. I always knew I could count on you; you have been a real thought partner and co-pilot to discuss with, to work with, to debate, agree, disagree with, a real partner to bond with.

Luca Savi: You have been a real thought partner, a co-pilot to discuss with, to work with, to debate, agree, disagree with, a real partner to bond with. In these 14 years, you made me much, much better. I'm so grateful, as I was very fortunate to have found you that day in Milan and work with you side by side for 14 years. Emmanuel will stick around in an advisory role until the end of June, helping to ensure a seamless transition for us. Michael Savinelli, 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.

Speaker #5: In these 14 years, you made me much better. I'm so grateful as I was very fortunate to have found you that day in Milan and work with you side by side for 14 years.

Speaker #5: Grazie di cuore. Emmanuel, we stick around in an advisory role until the end of June helping to ensure a seamless transition for us. Mike Savinelli, Vice President, Treasurer, Chief Tax Officer, and Assistant Secretary, has been appointed to serve as Interim CFO.

Speaker #5: 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.

Speaker #5: Kathy, please open the line for Q&A.

Speaker #6: Thank you. The floor is now open for questions. At this time, if you do have a question or a comment, please press star 11 on your touch-tone phone.

Operator 2: Thank you. The floor is now open for questions. Again, we do ask that while you pose your question, you pick up your handset to provide optimal sound quality. Please limit your questions to one question and one follow-up. Thank you. Our first question comes from the line of Joe Ritchie. Your line is now open.

Operator: Thank you. The floor is now open for questions. Again, we do ask that while you pose your question, you pick up your handset to provide optimal sound quality. Please limit your questions to one question and one follow-up. Thank you. Our first question comes from the line of Joe Ritchie. Your line is now open.

Speaker #6: Your question has been answered. You may remove yourself by again pressing star 11. Again, we do ask that while you pose your question, you pick up your handset to provide optimal sound quality.

Speaker #6: Please limit your questions to one question and one follow-up. Thank you. Our first question comes from the line of Joe Giordani with. Your line is now open.

Speaker #7: Hey, guys. Good morning.

Joe Ritchie: Hey, guys. Good morning.

Joe Giordano: Hey, guys. Good morning.

Speaker #5: Hi, Joe. Good morning.

Luca Savi: Hi, Joe. Good morning.

Joe Ritchie: Emmanuel, I know you don't like the spotlight. You know, you've been a great partner for all these years. I think we're all sad to see you go. Best of luck to you in the next.

Speaker #7: Yeah, 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.

Joe Giordano: Emmanuel, I know you don't like the spotlight. You know, you've been a great partner for all these years. I think we're all sad to see you go. Best of luck to you in the next.

Speaker #7: So best of luck to you in the next year.

Speaker #5: Thank you, Joe.

Luca Savi: Thank you, Joe.

Emmanuel Caprais: Thank you, Joe.

Joe Ritchie: 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? 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?

Speaker #7: 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 a pleasant surprise to you versus what your initial views were?

Joe 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? 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?

Speaker #7: 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, don't forget that we cultivated the SPX FLOW for 3 years. We visited all the plants, we went deep dive on the due diligence. We really have met many people and, therefore, we were able to find many things before the acquisition. I would say one thing that surprised me even more positively as I'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 engagement of our workforce in the Delavan plant, in the Rochester plant, in the Palmyra plant in Pennsylvania.

Speaker #5: That's a it's very true, Joe. I think that we don't forget that we cultivated the SPX Flow for three years. So we visited all the plants.

Speaker #5: 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.

Speaker #5: I would say one thing that surprised me even more positively as I'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 workforce in the Delavan plant in the Rochester plant in the Palmyra plant in Pennsylvania.

Speaker #5: 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.

Luca Savi: The engagement of the workforce on the shop floor is something that I was able to experience, and that 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 gonna take more time because those are revenue synergies, but definitely they are there, and more, and these are opportunities. Same on the cost side. 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 you know, there are aspects that they do differently that both of us will have to adjust.

Speaker #5: 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.

Speaker #5: 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 APS, good pipeline visibility, and moving fast on the synergies.

Speaker #5: 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.

Joe Ritchie: Yeah. 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 hostilities, does that create any sort of potential air pockets for you anywhere?

Joe Giordano: Yeah. 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 hostilities, does that create any sort of potential air pockets for you anywhere?

Speaker #7: Yep. 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 an ending of global hostilities, does that create any sort of potential air pockets for you anywhere?

Emmanuel Caprais: No, we don't, we don't see that, Joe. I think that we have a portfolio that is broad in defense, and so we are on a lot of different applications. There's a lot of defense modernization. There's a large defense modernization trend that is happening both in the US and in Europe. We think that this is here to stay, and this is a long-term trend.

Speaker #5: No, we don't see that, Joe. I think that we have a portfolio that is broad in defense. And so we are on a lot of different applications.

Speaker #5: And so there's a lot of defense modernization there's a large defense modernization trend that is happening both in the US and in Europe. And we think that this is here to stay and this is a long-term trend.

Speaker #7: Thanks, guys.

Joe Ritchie: Thanks, guys.

Joe Giordano: Thanks, guys.

Speaker #5: Thank you, Joe.

Luca Savi: Thank you, Joe.

Speaker #6: Thank you. Your next question comes from the line of Julian Mitchell with Barclays. Your line is now open.

Operator 2: Thank you. Your next question comes to the line of Julian Mitchell with Barclays. Your line is now open.

Operator: Thank you. Your next question comes to the line of Julian Mitchell with Barclays. Your line is now open.

Speaker #8: Oh, yes. Hi. Good morning and thanks very much. And wish you all the best, Emmanuel. If we think about the first question, really, around the 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.

Julian Mitchell: Oh, yes. Hi, good morning, and thanks very much, and wish you all the best, Emmanuel. If we think about the first question really around the selling days dynamics, sorry for the fiddly question, but maybe help us understand, you know, how much of a contribution that was to sales or EPS in the Q1, and how we should think about the seasonality of EPS over the balance of the year as that selling days tailwind goes into reverse.

Speaker #8: And how we should think about the seasonality of EPS over the balance of the year as that selling days tailwind goes into reverse.

Speaker #5: Yeah, Julian. So the contribution of the additional forward selling days was around 5%, 5 points of growth in the quarter. From a revenue standpoint.

Emmanuel Caprais: Yeah, Julian. 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 gonna be, you know, around the $1.90 to $1.95 EPS for Q2, Q3, and Q4.

Speaker #5: And then a little less than 10 cents from a 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 190 to 195 EPS for Q2, Q3, and Q4.

Speaker #8: That's really helpful. Thank you. 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.

Julian Mitchell: That's really helpful. Thank you. My follow-up would just be around if we're thinking about operating margins kind of, you know, moving around a lot year-on-year. I think you guided up 50 basis points in Q2. They were up over 100 in Q1, and you've got a pretty wide margin guide range for the year as a whole. 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?

Speaker #8: I think you guided up 50 bips in Q2. They were up over 100 in Q1. And you've got a pretty wide margin guide range for the year as a whole.

Speaker #8: So maybe any sort of is there any phasing of investment spend to be aware of in the year? And what do you assume for the flow acquired operating margin for the year as a whole, including those synergies you mentioned, please?

Speaker #5: Yeah. 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 were driving in all the businesses.

Emmanuel Caprais: 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. From an SPX FLOW standpoint we expect so we had a really strong margin in Q1.

Speaker #5: As well as some of the price actions that were taken and that will have a full impact starting in Q2. So as you've come to expect to of ITT, we drive margin progression year over year.

Speaker #5: 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.

Speaker #5: And the reason for that is that we only had the month of March in there. And March had five weeks, which is unusually large so disproportionate impact in the quarter.

Emmanuel Caprais: 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 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.

Speaker #5: 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.

Julian Mitchell: That's great. Thank you.

Speaker #8: That's great. Thank you.

Speaker #5: Thanks, Julian. We're ready for the next call. But yeah.

Luca Savi: Thanks, Julian. We're ready for the next call.

Speaker #6: Yes.

Operator 2: Yes.

Operator: Yes.

Luca Savi: Gotcha.

Speaker #5: Gotcha.

Operator 2: Your next question comes to the line of Jeffrey Hammond with KeyBanc Capital Markets. Your line is now open.

Speaker #6: Your next question comes from the line of Jeff Hammond with KeyBanc Capital Markets. Your line is now open.

Operator: Your next question comes to the line of Jeffrey Hammond with KeyBanc Capital Markets. Your line is now open.

Jeffrey Hammond: Hey, good morning, everyone.

Jeff Hammond: Hey, good morning, everyone.

Speaker #9: Hey, good morning, everyone. And.

Luca Savi: Hi, Jeff.

Jeffrey Hammond: Best of luck to Emmanuel. We're sad to hear you're leaving.

Speaker #5: Hi, Jeff.

Jeff Hammond: Best of luck to Emmanuel. We're sad to hear you're leaving.

Speaker #9: 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?

Luca Savi: Thank you.

Emmanuel Caprais: Thank you.

Jeffrey Hammond: As it sounds like, Luca, you are too. Just staying on SPX FLOW, can you dig in a little more on, you know, the order trends in that business just from a market standpoint? Then it seems like, you know, shorter term, you may be getting some early revenue synergies, but, you know, just the opportunities around, you know, leaning in on commercial excellence and starting to drive out growth. 'Cause I think, you know, one of the early concerns with the acquisition was the legacy growth rate and how do you accelerate that? Thanks.

Jeff Hammond: As it sounds like, Luca, you are too. Just staying on SPX FLOW, can you dig in a little more on, you know, the order trends in that business just from a market standpoint? Then it seems like, you know, shorter term, you may be getting some early revenue synergies, but, you know, just the opportunities around, you know, leaning in on commercial excellence and starting to drive out growth. 'Cause I think, you know, one of the early concerns with the acquisition was the legacy growth rate and how do you accelerate that? Thanks.

Speaker #9: And then it just seems like shorter-term, you're maybe getting some early revenue synergies, but just the opportunities excellence and starting to drive outgrowth. Because I think one of the early concerns with the acquisition was the legacy growth rate and how do you accelerate that?

Speaker #9: Thanks.

Speaker #5: Sure. Thanks, Jeff. So when you look at the orders growth, was it 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 Genie Pumps, their orders were up double digit.

Luca Savi: Sure. Thanks, Jeff. When you look at the orders growth, there was a good order growth of 5%. Now, that is overall for SPX FLOW in the quarter. When you look at the different businesses, you have Waukesha Cherry-Burrell, our hygiene pumps, their orders were up double digits. Nutrition and health solution, their orders were up 3%, mixers up 7%, and the pumps up 2%. All the different businesses were up actually in terms of orders. All of the four businesses were up also in revenue, with nutrition and health and Waukesha double digits, and mixer and pump in the low single digits. Overall, 15%. Okay? We expect also the book-to-bill for the full year to be above 1 for SPX FLOW.

Speaker #5: Nutrition and Health Solution, 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.

Speaker #5: And all of the four businesses were up also in revenue, with the Nutrition and Health and Waukesha double digit and Mixer and Pump in the low single digit.

Speaker #5: So overall, 15%. Okay? We expect also the book to be 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.

Luca Savi: 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 ITT. 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, you know, going after the 100%, not the 80/20, be more granular and be more decentralized, I will expect the performance to continue to improve.

Speaker #5: And we believe in this growth. Now, this to be honest, has got nothing to do with ITT. This is the good work that the SPX flow employees have done since nothing really has changed during the month of March.

Speaker #5: Now, if you top this off together with our approach, going after the 100%, not the 80/20, being more granular and be more decentralized, I would expect that performance to continue to improve.

Speaker #9: Okay, great. And then, just from a modeling standpoint, Emmanuel, you gave kind of the organic trends in the two Q-by segment. But how should we think about that within the 4% to 6%?

Jeffrey Hammond: Okay, great. Just from a modeling standpoint, Emmanuel, you gave kind of the organic trends in the Q2 by segment, but how should we think about that within the 4 to 6? 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's going up. Thanks.

Jeff Hammond: Okay, great. Just from a modeling standpoint, Emmanuel, you gave kind of the organic trends in the Q2 by segment, but how should we think about that within the 4 to 6? 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's going up. Thanks.

Speaker #9: 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's going up.

Speaker #9: Thanks.

Emmanuel Caprais: Yeah. 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. Motion Technologies is in the low single digits for the full year because obviously there's a decline in the automotive production, and friction is really outperforming very nicely as we saw in Q1. You know, nonetheless, there's a global production that is down. From a tax rate standpoint, today we stand at almost 25% or 24.9%. This is directly the impact of SPX FLOW.

Speaker #5: Yeah. So for the four-year, Jeff, we expect both IP and CCT to lead the charge from an organic growth standpoint. In the high single digits.

Speaker #5: And then motion technologies in the low single digits. For the four-year, because obviously, there's a decline in the automotive production and so friction is really outperforming.

Speaker #5: 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.

Speaker #5: 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.

Emmanuel Caprais: Mike and the team will work on tax opportunities in order to bring that tax rate down. I think with limited impact in 2026 and more to come in the years after.

Speaker #5: But I think with limited impact in 2026 and more to come in the years after.

Speaker #9: Okay. Thank you.

Jeffrey Hammond: Okay. Thank you.

Jeff Hammond: Okay. Thank you.

Speaker #5: Thanks, Jeff.

Luca Savi: Thanks, Jeff.

Speaker #6: Thank you. Your next question comes from the line of Nathan Jones with Stifel. Your line is now open.

Operator 2: Thank you. Your next question comes to the line of Nathan Jones with Stifel. Your line is now open.

Operator: Thank you. Your next question comes to the line of Nathan Jones with Stifel. Your line is now open.

Nathan Jones: Good morning, everyone. I'll add my best wishes to Emmanuel.

Speaker #10: Good morning, everyone. I'll add my best wishes to Emmanuel.

Speaker #5: Good morning, Nathan.

Luca Savi: Morning, Nathan.

Nathan Jones: First question here on CCT margins. It seems over the, you know, the last few years you guys have done the work on improving the value proposition to customers there, even at, I mean, I'm talking outside of the aerospace stuff. Improving the productivity, improving the on-time delivery. 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, you know, two or three years?

Speaker #10: 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.

Speaker #10: 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.

Speaker #10: And how much you think that could contribute to margins over the next two or three years.

Speaker #5: 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.

Luca Savi: Thanks, Nathan. This is fair. 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 an actual 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 kSARIA. I think that kSARIA is providing a great service to our customers, and I think that there is more to be done specifically in that part of CCT.

Speaker #5: The price negotiation with Boeing that we closed last year is an actual proof of what you just said. Having said that, I think that there is more to do on the pricing on the CCT front.

Speaker #5: And this is what the team is working on. I would say the largest opportunity to be fair, Nathan, is probably in CASARIA. So I think that CASARIA is providing a great service to our customers.

Speaker #5: And I think that there is more to be done specifically in that part of CCT.

Nathan Jones: I guess, follow-up question. More, I was 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 gonna ask you what they contribute to 2026. 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 ITT. Thanks.

Speaker #10: I guess follow-up question more as interested in revenue synergies out of this kind of deal. And I'm sure there is a lot of plans going on there.

Speaker #10: 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 ITT.

Speaker #10: Thanks.

Speaker #5: Sure. Let's try to be specific. So if you'll when I was in Delavan together with Rudy, and we were on the shop floor on the shop floor, going around, we know that the Waukesha Cherry Burrell doesn't have the twin screw pumps.

Luca Savi: Sure. Let's try to be specific. When I was in Delavan together with Rudy, and we were on the shop floor, going around, we know that the Waukesha Cherry-Burrell doesn't have the twin-screw pumps. As a matter of fact, we were spending money in Cherry, in Waukesha to really develop new twin-screw pumps. We did the assessment. Bornemann twin-screw pumps are super good, very well-recognized in the market, and therefore, you know, Waukesha will sell Bornemann twin-screw pumps. That was just a small order that we had, but that is a start. Not only that we start selling, but then we will also localize our production of the twin-screw in our plant in Delavan.

Speaker #5: As a matter of fact, we were spending money in Waukesha to really develop a new twin screw pumps. We did the assessment. Borneman twin screw pumps are super good, very well recognized in the market.

Speaker #5: And therefore, Waukesha will sell Borneman twin screw pumps. That was just a small order that we had. But it is a start. And not only that we start selling, but then we will also localize our production of the twin screw in our plant in Delavan.

Speaker #5: That is a specific activity that I'm sure will deliver quite a bit of synergies. Latin America, on the mixing front, Nico, who's our leader in Latin America, is working hard to get with the leaders of the different units in from SPX flow.

Luca Savi: That is a specific activity that I'm sure will deliver quite a bit of synergies. Latin America, on the mixing front, Nico, who's our leader in Latin America, is working hard together with the leaders of the different units in from SPX FLOW. I'm sure that as we localize more the decision-making, we speed it up the decision and the action in the region, Latin America, and we get more intimate with the customers, just by the fact that we are there, that will provide, you know, good revenue synergies. The Middle East is another area where we're working on, but as you can imagine, that probably at this point in time is more planning and discussion.

Speaker #5: And I'm sure that as we localize more, the decision-making, we speed up the decision and the action in the region in Latin America.

Speaker #5: 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.

Speaker #5: 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.

Luca Savi: Then there are potential synergies happening just because now we have a base in Xidu, Shanghai, where we never had a plant before 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. We are working hard on all those fronts, Nathan.

Speaker #5: In Shidu, 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.

Speaker #5: So we are working hard on all those fronts, Nathan.

Speaker #10: Thanks for taking the questions.

Nathan Jones: Thanks for taking the questions.

Speaker #5: Thank you.

Luca Savi: Thank you.

Speaker #6: Thank you. Your next question comes from the line of Vlad Bystryki with Citigroup. Your line is now open.

Operator 2: Thank you. Your next question comes to the line of Vladimir Bystricky with Citigroup. Your line is now open.

Operator: Thank you. Your next question comes to the line of Vladimir Bystricky with Citigroup. Your line is now open.

Speaker #10: Good morning, guys. Thanks for taking my call. And I echo the sentiment. Congratulations, Emmanuel. We'll miss working with you tremendously, obviously.

Vladimir Bystricky: Good morning, guys. Thanks for taking my call. I echo the sentiment, congratulations, Emmanuel. We'll miss working with you, tremendously, obviously.

Vlad Bystricky: Good morning, guys. Thanks for taking my call. I echo the sentiment, congratulations, Emmanuel. We'll miss working with you, tremendously, obviously.

Speaker #5: Thank you.

Luca Savi: Thank you.

Vladimir Bystricky: I guess my first question, just when I look at the organic growth outlook for the year, the +4 to 6, it seems very consistent with what you were thinking coming into the year. Can you talk about whether, you know, there's been any sort of moving pieces underneath that, you know, businesses or regions that are trending better or worse versus three months ago? I guess specifically, whether you're baking in any, you know, incremental headwinds in the Middle East associated with conflict there.

Speaker #10: I guess my first question, just when I look at the organic growth outlook for the year, the plus four to six—it seems very consistent with what you were thinking coming into the year.

Vlad Bystricky: I guess my first question, just when I look at the organic growth outlook for the year, the +4 to 6, it seems very consistent with what you were thinking coming into the year. Can you talk about whether, you know, there's been any sort of moving pieces underneath that, you know, businesses or regions that are trending better or worse versus three months ago? I guess specifically, whether you're baking in any, you know, incremental headwinds in the Middle East associated with conflict there.

Speaker #10: 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 three months ago?

Speaker #10: And I guess specifically, whether you're baking in any incremental headwinds in the Middle East associated with conflict there?

Speaker #5: 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.

Luca Savi: Sure. No major change from what we were expecting, Vlad. Now, as a matter of fact, the Middle East is something to watch. 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 ITT revenue. It's probably between 0.5 and 0.7 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.

Speaker #5: 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.

Speaker #5: But the impact in Q2 is probably less than 1% of the IT revenue. It's probably 0 point between 0.5 and 0.7 of the sales.

Speaker #5: 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.

Speaker #5: And I want to tell that growth is non-nominal growth. That is real growth. This is volume growth. There was a little bit of price, but that was minimum.

Luca Savi: There was a little bit of price, that was minimum. Also the connectors industrial sale, both with the OEM and distribution. Those, Vlad, those are market share gains in flow and also on the connector side.

Speaker #5: And then also the connectors industrial sales, both with the OEM and distribution. And those Vlad, those are market share gains. In flow and also on the connector side.

Vladimir Bystricky: That's really helpful, Luca. I guess just following up on that one, on the industrial connectors. Can you know, when you talk about market share gains there, can you give us any more color on, you know, what specific end markets or verticals, you're seeing share gains, and any notable regional differences to call out there?

Speaker #10: That's really helpful, Luca. And I guess just following up on that one, 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?

Vlad Bystricky: That's really helpful, Luca. I guess just following up on that one, on the industrial connectors. Can you know, when you talk about market share gains there, can you give us any more color on, you know, what specific end markets or verticals, you're seeing share gains, and any notable regional differences to call out there?

Speaker #5: I think that there is a very good performance on the in Asia Pacific, where the team has worked really hard on the medical side.

Luca Savi: I think that there is a very good performance in Asia Pacific, where the team has worked really hard on the medical side, and medical has been growing incredibly hard. Then also on the HVR. Asia Pacific and China has been definitely a good tailwind. Whereas I would say, when you look at Europe on the orders front, is really working hard on the defense because of the defense ramp-up that is happening in Europe. In North America, you have really the distribution is wider, so it would be difficult really pointing out to any specific market.

Speaker #5: And medical has been growing incredibly, incredibly hard. And then also on the HBOR. So Asia Pacific and China has been definitely a good tailwind.

Speaker #5: Whereas I will say when you look at Europe on the other front, it's really working hard on the defense because of the defense ramp-up that is happening in Europe.

Speaker #5: 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.

Speaker #10: Got it. Thanks. I'll hop back in here.

Vladimir Bystricky: Got it. Thanks. I'll hop back in queue.

Vlad Bystricky: Got it. Thanks. I'll hop back in queue.

Speaker #5: Thanks, Vlad.

Luca Savi: Thanks, Vlad.

Operator 2: Thank you. Your next question comes to the line of Bradley Hewitt with Wolfe Research. Your line is now open.

Operator: Thank you. Your next question comes to the line of Bradley Hewitt with Wolfe Research. Your line is now open.

Speaker #6: Thanks. Your next question comes from the line of Brad Hewitt with Wolf Research. Your line is now open.

Bradley Hewitt: Hey, good morning. Thanks for taking my questions.

Brad Hewitt: Hey, good morning. Thanks for taking my questions.

Speaker #10: Hey, good morning. Thanks for taking my questions.

Speaker #5: Hi, Brad. Good morning.

Luca Savi: Hi, Brad. Good morning.

Speaker #10: 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 builds to compress through the rest of the year?

Nathan Jones: You mentioned that your friction business outgrew auto build by 1,400 basis points during the quarter.

Brad Hewitt: You mentioned that your friction business outgrew auto build by 1,400 basis points during the quarter. Curious if you expect that outgrowth versus builds to compress through the rest of the year? Could there perhaps be upside this year to the typical algorithm of 400 to 500 basis points outgrowth?

Bradley Hewitt: Curious if you expect that outgrowth versus builds to compress through the rest of the year? Could there perhaps be upside this year to the typical algorithm of 400 to 500 basis points outgrowth?

Speaker #10: Or could there perhaps be upside this year to the typical algorithm of 4 to 500 basis points of outgrowth?

Luca Savi: I would say, listen, this 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 one quarter. 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. It was in China, in Europe, where we already had a high market share, and was also in North America.

Speaker #5: I would say, listen, this is an exceptional performance. And allowed us in a market that was down 3.4 in the quarter actually to grow.

Speaker #5: So the resilience of the team, the resilience of the business. I would say for the time being, this is only one quarter. So I would say we stick to our usually forecast of an outperformance between 500 and 700 points basis points for the full year.

Speaker #5: What I really like about this outperformance was that it was spread. It was in every region. It was in China. It was in Europe where we already had the high market share.

Speaker #5: And it 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.

Luca Savi: Last but not least is, you know, we won 39 platforms, electrified platforms in the quarter, which will feed, you know, future market share gains. Whilst production will be down this year to 91 million vehicles, the production of hybrid and the production of EV will actually grow double digits, and this is where we are particularly strong.

Speaker #5: 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.

Speaker #5: And this is where we are particularly strong.

Speaker #10: 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?

Bradley Hewitt: Okay, great. 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? Thank you.

Brad Hewitt: Okay, great. 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? Thank you.

Speaker #10: Thank you.

Speaker #5: 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 got more price in power.

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 Technologies where you, we feel, you know, the price pressure. Overall, for the full year at ITT, the price cost is gonna be positive. When you look at the tariff, the situation is very fluid. I'm pretty sure the next few weeks it's gonna be different than what it is today. We are actively pursuing any opportunity to recover any tariffs that we already paid, but we think that process will be long and who knows how it's gonna pan out.

Speaker #5: Less so emotional technology where we feel the price pressure. But overall, for the full year, at ITT, the price cost is going to be positive.

Speaker #5: Now, when you look at the tariffs, the situation is very fluid. I'm pretty sure the next few weeks is going to be different than what it is today.

Speaker #5: Now, we are actively pursuing any opportunity to recover any tariffs that we already paid. But we think that process will be long. And who knows how it's going to pan out?

Speaker #5: And then what I would like to highlight is that as we demonstrated in 2025, we were able to offset all the tariffs with commercial and productivity actions.

Luca Savi: What I would like to highlight is that as we demonstrated in 2025, we were able to offset all the tariffs with commercial and productivity actions. We think that will be a similar scenario in 2026.

Speaker #5: So we think that that will be a similar scenario in 2026.

Speaker #10: Great. Thanks, Luca.

Bradley Hewitt: Great. Thanks, Luca.

Brad Hewitt: Great. Thanks, Luca.

Speaker #5: Thanks, Brad.

Luca Savi: Thanks, Brad.

Operator 2: Thank you. Your next Matt Summerville with D.A. Davidson. Your line is now open.

Operator: Thank you. Your next Matt Summerville with D.A. Davidson. Your line is now open.

Speaker #6: Thank you. Your next question. At Somerville with DA Davidson, your line is now open.

Matt Summerville: Thanks. Echo similar sentiment, Emmanuel. Just two 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.

Speaker #11: Thanks, Echo similar sentiment. Emanuel. Just two 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?

Speaker #11: And then I'll follow up.

Speaker #5: Sure, Matt. The funnel is very healthy. It's elevated. And it's actually up year over year. Matt is also up sequentially too. 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.

Luca Savi: Sure, Matt. The funnel is very healthy, is elevated, and is actually up year-over-year, Matt. It's also up sequentially too. 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. Despite that, the funnel 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 Europe and the Middle East for obvious reasons, because all the commercial conversation, the investment that we had with Saudi Arabia, for example, all of those are frozen.

Speaker #5: Which is interesting because this is where we had our largest orders growth in North America. And despite that, the funnel is up tremendously. Which tells us something about the replenishment speed of the opportunity in North America.

Speaker #5: 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.

Speaker #5: But we expect those to start quickly if the situation normalized.

Luca Savi: We expect those to start quickly if, you know, the situation normalize.

Matt Summerville: Thank you. 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. 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.

Speaker #10: Thank you. 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 4 cents in Q1, obviously you're assuming something more conservative on the look ahead out three quarters.

Speaker #10: 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.

Speaker #5: Yeah. 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.

Emmanuel Caprais: Yeah. When you think about Q1, you know, as I mentioned, in Q1, you have an outsized contribution from SPX FLOW. The reason for this is because basically March is so disproportionate compared to the rest of the quarter. Then you also have less interest expense as well as a smaller share count. As you know, 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. As a result, SPX FLOW continues to deliver really strong performance, but is kind of impacted by these variables. The normalizing of the fact that we don't have just one month with Cybertruck.

Speaker #5: 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 dollars a quarter.

Speaker #5: You get your share counts that goes to 90 million shares. And then so as a result, SPX flow continues to deliver really strong performance but is kind of impacted by these variables.

Speaker #5: And the normalizing of the fact that we don't have just one month with fabric. 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 preparing the ground for further productivity as we hit 27, including cost synergies.

Emmanuel Caprais: I would say, we continue the progression of the performance of SPX FLOW from a growth standpoint, as Luca said, but also from a margin standpoint.

Luca Savi: Preparing the ground for further productivity as we hit 2027, including cost synergies.

Emmanuel Caprais: Preparing the ground for further productivity as we hit 2027, including cost synergies.

Speaker #11: Got it. Thank you.

Matt Summerville: Got it. Thank you.

Speaker #5: Thank you, Matt.

Luca Savi: Thank you, Matt.

Speaker #6: Thank you. Your last question comes in line of Scott Davis with Milia's research. Your line is now open.

Operator 2: Thank you. Your last question comes to the line of Scott Davis with Melius Research. Your line is now open.

Operator: Thank you. Your last question comes to the line of Scott Davis with Melius Research. Your line is now open.

Speaker #10: Hey, good morning. It's Jake on for Scott. Congrats on getting the SPX steel up across the goal line and congrats, Emanuel, as well. We appreciate all your help over the years.

[Analyst] (Melius Research): Hey, good morning. It's Jake on for Scott.

Jake Levinson: Hey, good morning. It's Jake on for Scott.

Luca Savi: Hey, Jake.

[Analyst] (Melius Research): Congrats on getting the SPX deal across the goal line, and congrats to Emmanuel 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 Cabernet or 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. I'd have to imagine when you start turning on some of this production that's been shut in, you're gonna add a lot of valves and pumps and other products that probably won't work as they should, and to say nothing of some of the infrastructure that's been destroyed.

Jake Levinson: Congrats on getting the SPX deal across the goal line, and congrats to Emmanuel 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 Cabernet or 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. I'd have to imagine when you start turning on some of this production that's been shut in, you're gonna add a lot of valves and pumps and other products that probably won't work as they should, and to say nothing of some of the infrastructure that's been destroyed. I guess is there a way to think about what the upside might be on the other side of this conflict?

Speaker #10: And hopefully, you'll be on the beach in a few months with a nice cabernet or actually, I don't know what your drink is, but just on the Middle East.

Speaker #10: 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 this production that's 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.

Speaker #10: And to say nothing of 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?

[Analyst] (Melius Research): I guess is there a way to think about what the upside might be on the other side of this conflict?

Speaker #5: Yeah. What you said is absolutely true. So I think that we expect the investment that was supposed to happen, the conversation to start super quick.

Luca Savi: Yeah, what you said is absolutely true. 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 work that comes out of it. This is where our team, headed by Khaled and by Hamdi, to be able to perform because the service business is actually very, very good. The Saudi expansion that we made will be perfect at that time.

Speaker #5: And then there should be some good service work that comes out of it. And this is where our team headed by Kalim in by Haled and by Hamdi to be able to perform because the service business is actually very, very good.

Speaker #5: 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 Harbony valves in Israel.

Luca Savi: One thing I also want to remind is the incredible performance also that we had of our Habonim valves in Israel, 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. Sure, we had the 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. A great performance from the Habonim team over there in the Middle East as well.

Speaker #5: 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 the pressure on the margin because the cost of the containers, because of the transportation, etc.

Speaker #5: And the disruption on the operations, as you can imagine. But a great performance from the Harbony team over there in the Middle East as well.

[Analyst] (Melius Research): Okay. That's a good color. Thanks. Just on 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. I'm not sure if that's an indication that maybe there's some deals in your pipeline that you feel are actionable. Do you feel like you have the organizational capacity to be able to take on-

Jake Levinson: Okay. That's a good color. Thanks. Just on 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. I'm not sure if that's an indication that maybe there's some deals in your pipeline that you feel are actionable. Do you feel like you have the organizational capacity to be able to take on-

Speaker #10: Okay. That's good color. Thanks. And just on 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.

Speaker #10: 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.

Speaker #10: So do you feel like you have the organizational capacity to be able to take on some more from here?

Luca Savi: Sure

[Analyst] (Melius Research): Some more from here?

Jake Levinson: Some more from here?

Luca Savi: Sure. Yes, Jake. Yes, we do. Because when you think about the SPX FLOW, it involves our business units that are freestanding. The pumps of SPX FLOW, of course, will be integrated well 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 Sulzer. Sulzer is performing incredibly well, 44% revenue growth, book-to-bill of 1.2. You know, the fundamentals are strong. They've been practically untouched by the SPX FLOW acquisition. So that management team, that business have the capacity to really do a little bit more. This is also why we kept our that ratio to 2.7, to really have that flex, that flexibility.

Speaker #5: Sure. Sure. Yeah, Jake. Yes, we do. Because when you think about the SPX flow, it involves our business units that are self-standing. The pumps of SPX flow, of course, will be integrated with our pumps business.

Speaker #5: But there are areas where the business and the business leader are running very well. They got the capacity to really add to it. Think about span oil.

Speaker #5: Span oil is performing incredibly well. 44% revenue growth. Book-to-bill of 1.2. The fundamentals are strong. They've been practically untouched by the SPX flow acquisition.

Speaker #5: So their management team, their business have the capacity to really do a little bit more. And this is also why we kept our ratio to 2.7, to really have that flexibility.

Luca Savi: We got the financial capacity to do small bolt-ons and also the management capacity. Obviously, they're gonna be small in size, right? You know, nothing large.

Speaker #5: So, we’ve got the financial capacity to do small bolt-ons, and also the management capacity. Obviously, they are going to be small in size, right?

Speaker #5: Nothing large.

Speaker #10: Okay. I appreciate it, Luca. Thank you. I'll pass it on.

[Analyst] (Melius Research): Okay. I appreciate it, Luca. Thank you. I'll pass it on.

Jake Levinson: Okay. I appreciate it, Luca. Thank you. I'll pass it on.

Speaker #5: Thank you, Jake.

Luca Savi: Thank you, Jake.

Operator 2: Thank you. This is today's teleconference. Please disconnect your lines at this time, and have a wonderful day.

Operator: Thank you. This is today's teleconference. Please disconnect your lines at this time, and have a wonderful day.