ITT's Q1 2025 Earnings Call: Unpacking Key Contradictions in Tariffs, Pricing, and Market Outlook

Tariff exposure and impact, pricing strategy and margin expansion, customer investment decisions, M&A strategy and outlook, and market performance and outlook are the key contradictions discussed in ITT's latest 2025Q1 earnings call.



Higher Orders and Backlog Growth:
- ITT reported orders exceeding $1 billion for Q1 2025, the highest in the company's history, bolstered by acquisitions like kSARIA and Svanehøj.
- The orders showcased a book-to-bill ratio of 1.15, leading to an ending backlog of $1.8 billion, an increase of 21% year-over-year and 10% sequentially.
- The growth was driven by new large palm project awards and strong market share gains in sector-specific acquisitions.

Strong Financial Performance:
- ITT expanded margin by 30 basis points to 17.4% on flat sales, reporting adjusted EPS of $1.45, up 7% from the previous year.
- Free cash flow for the quarter more than doubled, reaching $77 million.
- The company achieved these results through operational efficiencies, productivity gains, and the impact of acquisitions, despite headwinds from foreign currency and M&A amortization.

Acquisition-Driven Growth:
- The acquisition of kSARIA contributed 26 points of total growth in Q1, with specific sectors like defense connectors growing over 20%.
- Svanehøj's marine pump shipments showed robust growth, driven by strong demand and market share gains.
- The strategic acquisitions increased ITT's exposure to high-growth markets and sectors, enhancing overall company performance.

VIDAR as a Strategic Innovation:
- ITT launched VIDAR, an innovative motor technology expected to enter a new $6 billion addressable market, with potential for substantial energy savings and emission reductions.
- The innovation aims to disrupt the flow industry by embedding variable speed technology into motors, simplifying the process and reducing costs.
- This strategic move is expected to drive future growth and competitive advantage for ITT.