Illinois Tool Works reported fourth-quarter revenue of $4.1 billion, up 4.1% year-over-year. Organic growth contributed 1.3%, foreign currency translation added 2.5%, and acquisitions 0.3%. GAAP earnings per share rose 7% to $2.72. Operating margin expanded 30 basis points to 26.5%, driven by enterprise initiatives that contributed 140 basis points. Segment operating margin increased by 120 basis points to 27.7%. Operating cash flow reached $1 billion, free cash flow was $0.9 billion, representing 109% conversion to net income. The company repurchased $375 million of its shares and recorded an effective tax rate of 22.8%.

For the full year, ITW generated revenue of $16 billion, a 0.9% increase, with organic growth flat, foreign exchange adding 0.8% and acquisitions 0.1%. GAAP EPS was $10.49, slightly above prior guidance of $10.45. Operating income totaled $4.2 billion, and operating margin improved 40 basis points to 26.3%, with enterprise initiatives contributing 130 basis points. Six of seven segments expanded margins, three exceeding 30%. Operating cash flow was $3.1 billion and free cash flow $2.7 billion (88% conversion). ITW invested $0.8 billion in growth initiatives and returned $3.3 billion to shareholders through dividends and buybacks. The effective tax rate stood at 22.7%.

All seven of ITW’s industry segments delivered positive organic growth and margin expansion in the quarter. Automotive OEM revenue reached $827 million with a 21.8% margin; Food Equipment revenue was $698 million at 28.0% margin; Test & Measurement and Electronics achieved $789 million at 28.1%; Welding produced $462 million at 33.3%; Polymers & Fluids delivered $457 million at 29.0%; Construction Products posted $431 million at 29.0%; Specialty Products recorded $433 million at 28.7%. These results underscore the breadth of ITW’s diversified portfolio and its ability to drive profitability across multiple end markets.

ITW is guiding 2026 revenue growth of 2–4% with organic growth of 1–3%, based on current demand and exchange rates. The company expects operating margin to expand by approximately 100 basis points to a range of 26.5–27.5%, with enterprise initiatives contributing 100 basis points. GAAP EPS is forecast at $11.00–$11.40, a midpoint increase of 7%. Free cash flow is projected to exceed net income, and the company plans share repurchases of about $1.5 billion. The effective tax rate is estimated at 23.5–24.5%. All seven segments are expected to deliver positive organic growth and margin expansion in 2026.