What is the price vs. cost situation in each of the three segments?

Flow Technologies and CCT have positive price power. Motion Technologies is recovering some cost inflation but not fully. Overall, ITT expects to be price/cost positive, probably neutral from a margin perspective for the full year. “When you look at the price cost, it's pretty much the same dynamic. You have a price cost positive when it comes to Flow Technologies and CCT because obviously, we've got more price power in there. Different dynamic in Motion Technologies, where we are recovering some of the cost inflation but not full.”

How much of the CCT order strength is underlying demand versus lumpiness, especially given the record July?

CCT's performance was outstanding across all businesses (Controls, Connectors, kSARIA). While kSARIA had some lumpiness from Q1 postponements, there's a strong market tailwind and significant market share gains, with long-term visibility and considerably higher backlog for the next few quarters. “CCT was simply outstanding in terms of the orders. Everything was up. So it's not just CCT up 58%. Controls were up 2 connectors were up 38%. kSARIA is true. You're right, Jeff, in terms of lumpiness, probably you remember that Q1, we postponed some of the orders from Q1 to Q2.”

What are the regional dynamics for legacy Flow assets, specifically in the Middle East and project outlays?

Middle East revenue grew significantly due to prior wins, but new orders have been delayed, impacting regional growth in upcoming quarters. However, some orders are now moving to EPCs. Habonim (in Middle East) showed strong performance. North America and Latin America funnels are growing, while Europe and APAC funnels are slightly down. “The orders in the Middle East have been delayed. And this probably will impact the regional growth in that -- in Saudi Arabia and in the Middle East when it comes to the next few quarters. ... North America, Latin America and interest in Middle East are up.”

ITT

ITT (ITT) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Industrials· Aug 6, 2026

Source: earnings call transcript

Executive summary

ITT Q2 FY26 — Strong Organic Growth and Margin Expansion, Debt Repayment Ahead of Schedule

ITT delivered a strong Q2 FY26, accelerating momentum with robust organic growth across all segments and significant margin expansion in CCT and Motion Technologies. Strategic acquisitions like SPX FLOW and kSARIA are compounding value, with SPX FLOW integration ahead of plan and contributing to growth. The company also deleveraged faster than committed, setting a solid foundation for continued performance and future strategic capital deployment.

Highlights

Orders grew 53% overall, with 13% organic growth, reflecting a book-to-bill of 1.1.
Revenue grew 51% overall, with 13% organic growth across all segments.
Adjusted EPS increased 18% year-over-year to $2.08.
Generated $176 million of free cash flow year-to-date, with Q2 free cash flow margin at 11%.
Leverage ratio reduced to 2.5x, 6 months ahead of original commitment.

Concerns

Flow Technologies organic orders declined 3% year-over-year due to strong prior year performance and delayed orders in the Middle East.
Flow Technologies operating margin diluted by 160 basis points due to the full quarter impact of SPX FLOW.
Motion Technologies is recovering cost inflation but not fully, indicating pricing pressures.

Guidance & targets

Category	Target	Timeline	Confidence
SPX FLOW EPS accretion	$0.10 to $0.14 medium materiality	FY26	High
Full-year organic revenue growth	5% to 8% growth high materiality	FY26	High
Adjusted operating margin	approximately 20.5% high materiality	FY26	High
Adjusted EPS outlook	$8.22 at the midpoint high materiality	FY26	High
Free cash flow	$565 million high materiality	FY26	High
Leverage ratio	approximately 2.3x high materiality	Year-end · FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Connect and Control Technologies (CCT) Strong organic growth driven by large defense orders in kSARIA and record connector orders. Record operating margin for the segment, even with kSARIA dilution. Orders growth: 59% organickSARIA orders growth: 168%Connector orders growth: 38%Commercial Aerospace revenue growth: 14%Defense revenue growth: 16%kSARIA revenue growth: 28%Industrial connectors revenue growth: 24%Operating margin expansion: 100 bps YoY, 240 bps sequentiallyBook-to-bill: 1.4	—	17% organic	—	21.7%
Motion Technologies Organic growth achieved in a down market, driven by friction aftermarket and OE outperformance. Margin expansion due to net productivity. Total revenue growth: 6%KONI orders growth: 9%Operating margin growth: 90 bpsNet productivity: 110 bps over prior yearOutperformance of global vehicle production: >300 bps	—	2% organic	—	21.1%
Flow Technologies Strong organic revenue growth driven by project shipments and short cycle. Organic orders declined due to Middle East delays and tough prior-year comps. Operating margin diluted by full quarter impact of SPX FLOW, but legacy business expanded margins. Total revenue growth: 123%Total orders growth: 91%Organic orders decline: 3% YoYLegacy FT margin expansion: 70 bpsSPX FLOW revenue growth: 5% in Q2, 9% YTDSPX FLOW orders growth: 9% in Q2SPX FLOW mixers orders growth: 23%SPX FLOW Waukesha Cherry-Burrell orders growth: 10%SPX FLOW Nutrition & Health orders growth: 8%SPX FLOW book-to-bill: 1.13 in Q2, 1.05 YTDPump project sales growth: 45%Valve business growth: 19%Short cycle growth: 10% YoY	—	21% organic	—	21.4%

Orderbook & backlog

Company-wide book-to-bill 1.1 Q2 FY26 end

CCT book-to-bill 1.4 Q2 FY26 end

SPX FLOW book-to-bill 1.13 Q2 FY26 end

SPX FLOW book-to-bill 1.05 H1 FY26 end

Svanehøj book-to-bill 1.2 average since acquisition

Svanehøj projected backlog growth 40% end of 2026

since acquisition

kSARIA projected backlog growth 180% end of 2026

since acquisition

Company-wide backlog for next quarter 30% higher Q2 FY26 end

YoY

Company-wide backlog for next two quarters 20% higher Q2 FY26 end

YoY

Company-wide backlog for next year 20% higher Q2 FY26 end

YoY

Deals & partnerships

aerospace contacts Small, strategic acquisition to enhance supply chain resilience and secure supply of critical high-precision contacts.

Acquired in July. Addresses concerns about feeding demand and growth in the connector side, particularly for defense.

Risks & headwinds

Delayed orders in the Middle East Next few quarters

Flow Technologies organic orders declined 3% year-over-year

Mitigation:Some orders are now being given to EPCs.

Pricing pressures in Motion Technologies

Recovering some of the cost inflation but not full

Mitigation:Achieved net productivity of 110 basis points over the prior year.

Margin dilution from SPX FLOW integration Q2 FY26

Flow Technologies operating margin declined 160 basis points

Mitigation:Cost synergies from integration and other productivity actions are expected to expand margin throughout the remainder of 2026.

Tougher year-over-year comparisons Q3 and Q4 FY26

Q3 and Q4 face tougher comparables

Mitigation:Sequential EPS guidance has been raised and maintained at elevated levels.

Fewer operating days in Q4 Q4 FY26

Q4 of this year will have 4 days less than Q4 of last year

Mitigation:Management expects to maintain elevated performance levels despite this.

What to watch in Q3 FY26

SPX FLOW Margin Improvement

H2 FY26

Current Flow Technologies margin 21.4% (diluted by 160 bps due to SPX FLOW in Q2)

Target Sequential expansion

Why it matters

Critical for overall margin expansion and successful integration of SPX FLOW.

Flow Technology, excluding SPX Flow, expanded margins 70 basis points fueled by market share gains and pricing. Total flow margin of 21.4% was diluted by the full quarter contribution of SPX loan. Nevertheless, cost synergies from the integration together with other productivity actions in the second half of the year are expected to expand margin throughout the remainder of 2026.

Find out whether ITT delivers this. Inve re-checks your case every morning.

Q&A highlights

How does SPX FLOW's lean journey compare to legacy ITT businesses, and where is the upside?

SPX FLOW plants are well-run with good talent, but lean principles need to be more entrenched in the cell-level DNA, rather than just corporate initiatives, indicating room for productivity improvement.

“I think though that the area for improvement that we have in SPX FLOW and the lean is really to ensuring that the lean is entrenching the DNA in the cell.”

asked by Scott Davis · answered by Luca Savi

2 min read 6 chapters

Detailed narrative

Acquisition Integration Success

ITT highlighted the successful integration and performance of recent acquisitions, particularly SPX FLOW, Svanehøj, and kSARIA. Svanehøj is expected to grow revenue 32% annually with a 1.2 book-to-bill, and kSARIA's backlog is projected to grow 180% since acquisition, demonstrating the value creation from these strategic moves. SPX FLOW integration is ahead of plan, contributing to overall growth and margin expansion.

CCT Segment Outperformance

The Connect and Control Technologies (CCT) segment was a significant highlight, growing orders 59% organically, fueled by large defense orders in kSARIA (168% growth) and record connector orders (38% growth). This performance, coupled with 17% organic revenue growth, led to a record operating margin of 21.7% for the segment, driven by higher volume and pricing.

Flow Technologies Dynamics

Flow Technologies saw 91% total orders growth but a 3% organic decline due to strong prior-year comparables and delayed Middle East orders. However, SPX FLOW within this segment grew 9% year-to-date, with a book-to-bill of 1.13, and the legacy Flow Technologies business expanded margins by 70 basis points. Management expects sequential margin improvement in H2 from synergies.

Capital Allocation and Deleveraging

The company prioritized debt repayment, reducing $124 million in Q2 and achieving a leverage ratio of 2.5x, six months ahead of schedule. This financial discipline provides flexibility for future strategic bolt-on acquisitions while maintaining focus on debt reduction and delivering on SPX FLOW synergies. A small, strategic acquisition of aerospace contacts was made in July to enhance supply chain resilience.

Operational Excellence and Margin Expansion

Across the legacy businesses, ITT demonstrated strong operational execution, contributing to an 18% adjusted EPS growth. Motion Technologies expanded its margin by 90 basis points to 21.1% through net productivity, while CCT's margin expansion was driven by increased volume and effective pricing actions. The company expects to be price/cost positive overall for the full year.

Strategic Market Tailwinds and Funnel Growth

Management noted benefiting from market tailwinds, particularly in defense for kSARIA and marine energy transition for Svanehøj. The overall Flow Technologies funnel is growing 34% year-over-year, with strong growth in North America and Latin America. The company is actively pursuing opportunities in emerging markets like China and Latin America by decentralizing decision-making and leveraging local engineering.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.