Executive Summary

Q4 revenue $929.0M (+12% YoY; +5.9% organic) with adjusted operating margin 17.5% (+50 bps YoY), delivering adjusted EPS $1.50 (+12% YoY); reported EPS $1.55 (+38% YoY) benefited from lower restructuring and favorable tax items .
Segment mix strong: IP +25% reported (+10% organic) to $362.6M with 21.2% margin; CCT +37% (+9% organic) to $241.0M with 16.6% margin (ex-kSARIA dilution margins would be ~60 bps higher); MT down 11% on Wolverine divestiture but margin expanded to 19.3% .
2025 guidance initiated: revenue +2–4% (+3–5% organic), operating margin 18.0–18.9% (adjusted 18.1–19.0%), EPS $6.05–$6.45 (adjusted $6.10–$6.50), FCF $450–$500M (12–13% margin); quarterly dividend raised 10% to $0.351 .
Cash execution accelerating: Q4 operating cash flow $223.2M (+31% YoY; 24% margin) and FCF $186.8M (+42% YoY; 20% margin), supported by working capital improvements .

What Went Well and What Went Wrong

What Went Well
- Strong IP and CCT growth with healthy pricing and productivity; legacy IP margin expanded 340 bps YoY despite acquisition dilution; management emphasized durable backlog conversion and double-digit accretion from recent M&A in 2025 .
- Cash generation surged: Q4 FCF margin 20% with inventory/collections improvement; full-year FCF $438.7M (+2%) despite higher interest and M&A amortization .
- Strategic repositioning: divested Wolverine, acquired Svanehøj and kSARIA; CEO: “We grew, we executed and we transformed…shifting our portfolio to higher growth and higher-margin businesses” .
What Went Wrong
- Headwinds from divestiture and interest: Wolverine sale reduced revenue/EPS (~$0.06 in Q1 2025) and higher interest from acquisition debt offset some operating gains .
- Temporary intangible amortization (~$0.16–$0.17 in 2025) limits near-term EPS flow-through; benefits phase out by Q2 (Svanehøj) and Q4 (kSARIA) .
- Aerospace still soft near-term: Boeing contributes ~$10M revenue per quarter; 2025 aerospace revenue expected down low single digits; tariff risk not included in 2025 guide (mitigation plans underway) .

Financial Results

Headline metrics vs prior quarters

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$905.9	$885.2	$929.0
EPS – Reported ($)	$1.45	$1.96	$1.55
EPS – Adjusted ($)	$1.49	$1.46	$1.50
Operating Margin (%)	17.6%	23.5%	17.2%
Adjusted Operating Margin (%)	18.0%	18.3%	17.5%
Operating Cash Flow ($USD Millions)	$157.7	$123.9	$223.2
Free Cash Flow ($USD Millions)	$134.5	$87.3	$186.8

Note: Q3 reported operating margin/EPS include the preliminary gain on the Wolverine divestiture, inflating reported comparisons; adjusted metrics remove special items .

Segment performance (Q4 2024)

Segment	Revenue ($MM)	Reported YoY %	Organic Growth %	Operating Income ($MM)	Operating Margin (%)
Motion Technologies (MT)	$326.0	(10.6)%	—%	$62.8	19.3%
Industrial Process (IP)	$362.6	25.2%	10.4%	$76.9	21.2%
Connect & Control Technologies (CCT)	$241.0	37.2%	9.4%	$39.9	16.6%

Drivers: MT decline due to Wolverine divestiture; IP growth from Svanehøj and pump projects; CCT growth from kSARIA plus defense/industrial connectors and pricing .

KPIs

KPI	Q2 2024	Q3 2024	Q4 2024
Orders ($USD Millions)	$929.3	$965.4	$914.8
Organic Revenue Growth (%)	6.0%	5.5%	5.9%
Ending Backlog ($USD Millions)	—	~$1,700	~$1,600

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue Growth (Total)	FY2025	—	+2% to +4%	Initiated
Organic Revenue Growth	FY2025	—	+3% to +5%	Initiated
Operating Margin (GAAP)	FY2025	—	18.0% to 18.9%	Initiated
Adjusted Operating Margin	FY2025	—	18.1% to 19.0% (+40 to +130 bps)	Initiated
EPS (GAAP)	FY2025	—	$6.05 to $6.45	Initiated
EPS (Adjusted)	FY2025	—	$6.10 to $6.50	Initiated
Free Cash Flow ($)	FY2025	—	$450M to $500M (12–13% margin)	Initiated
Quarterly Dividend/Share	1Q25	$0.319 (4Q24)	$0.351 (+10%)	Raised

Management notes EPS growth ~8% at midpoint in 2025, >10% excluding temporary intangible amortization; guidance excludes potential tariff impacts (mitigation plans in progress) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4)	Trend
Backlog and conversion	Record backlog ~$1.7B; raising 2024 EPS midpoint on execution/M&A	Entered 2025 with ~$1.6B backlog; project conversion to ramp through 2025 (large pump awards shipping)	Healthy, skewed to projects; conversion accelerates H2’25
M&A integration and accretion	kSARIA acquisition announced; Svanehøj driving orders; Wolverine divested	Svanehøj/kSARIA to add ~15 points of CCT/IP growth in 2025; ~$0.20 EPS accretion; intangible amortization rolls off by Q4	Positive, increasing accretion in 2025
Pricing/contracting (CCT, Aerospace)	CCT margin expansion; connectors growth	Price renegotiations in aerospace ongoing; positive pricing expected to continue in 2025	Supportive to margins
Tariffs/Macro	Risk flagged in filings	Tariff impacts excluded from 2025 guide; granular commercial/operational mitigation plans under way (Mexico/Nogales footprints)	Monitoring risk; mitigation planned
Product innovation (EMD)	—	Embedded Motor Drive (EMD) launch targeted Q2; positioned as “game changer” for pump energy efficiency	New growth vector in IP
Auto/MT performance	MT outperformance; margin expansion	MT margin >19% in Q4; 20% targeted for 2025 via productivity and price-cost	Margin upcycle despite market softness
Defense programs (CCT)	Defense connectors growth	Awards across Columbia-class sub, Joint Strike Fighter, radar systems; distribution leverage	Strong demand backdrop

Management Commentary

“We grew, we executed and we transformed…with 2 strategic acquisitions and divestiture shifting our portfolio to higher growth and higher-margin businesses.” — Luca Savi, CEO .
“Legacy IP expanded margin 340 bps…overcoming 280 bps of dilution from the Svanehøj acquisition.” — Emmanuel Caprais, CFO .
“The embedded motor drive [EMD], truly a game changer…only industrial smart motor of this kind…launch…in Q2.” — Luca Savi .
“Our 2025 guidance does not include any anticipated impacts from tariffs…we’re developing granular action plans.” — Emmanuel Caprais .

Q&A Highlights

2025 cadence: Soft Q1 (organic revenue down low single digits, mainly MT), EPS roughly flat YoY due to Wolverine/interest; growth ramps through Q2–Q4 with margin expansion .
Intangible amortization: ~$0.16–$0.17 temporary amortization in 2025; benefit from Svanehøj in Q2 offset by kSARIA until Q4 .
IP demand: Q4 organic orders +12%; projects +25%, short-cycle +8%; Svanehøj book-to-bill 1.3 and orders +26% FY24 .
Tariffs: Guidance excludes tariffs; specific commercial/operational mitigations in MT Mexico and CCT Nogales underway .
Boeing and CCT: Boeing ~$10M revenue/quarter; 2025 aerospace revenue expected down low single digits; CCT still guided to ~4–5% growth on defense/industrial strength .
Margin trajectory: IP +~100 bps YoY including modest Svanehøj dilution; CCT ex-kSARIA ~20.5% in 2025 with 22% target intact thereafter; MT ~20% in 2025 led by productivity .

Estimates Context

We attempted to retrieve S&P Global consensus for Q4’24 EPS and revenue, but the request failed due to a daily rate limit; therefore, we cannot quantify beat/miss vs Wall Street consensus in this recap (consensus unavailable via S&P Global at time of analysis) [GetEstimates error].
Contextually, the company achieved FY24 adjusted EPS $5.86, matching the top end of its Q3-raised guidance range of $5.80–$5.86, suggesting in-line/strong execution into year-end .

Key Takeaways for Investors

Mix and execution are driving durable margins: adjusted OM at 17.5% in Q4 and 17.7% for FY24; 2025 midpoint implies ~90 bps expansion to ~18.6% with legacy IP/CCT productivity and price realization as core drivers .
Cash conversion stepped up sharply in Q4; 2025 FCF guide $450–$500M (12–13% margin) provides optionality for continued M&A and shareholder returns .
M&A compounding begins: Svanehøj and kSARIA add to growth and EPS (~$0.20 in 2025) with amortization headwind rolling off through 2025; CCT still targets 22% margins post-dilution .
Backlog supports visibility, but project mix extends conversion timelines; expect acceleration later in 2025 as large pump awards ship .
Near-term watch items: soft Q1 cadence (auto production), aerospace softness (Boeing), FX headwind (~$0.09), and tariff uncertainty (not in guide) with mitigation plans in place .
Dividend growth reinforced with a 10% increase to $0.351; credit profile strengthened with Moody’s upgrade to Baa1 in late Q4’24 .
Catalysts: EMD commercial launch in Q2; Capital Markets Day on May 15 (NYC) for deeper dives into innovation, integration synergies, and multi-year targets .

Citations: Q4 2024 press release/8‑K ; Q4 2024 earnings call transcript –; Q3 2024 press release/8‑K –; Q2 2024 press release/8‑K –; Moody’s upgrade press release (Nov 27, 2024) .

ITT INC. (ITT)·Q4 2024 Earnings Summary