ITT Q3 Deep Dive: Organic Growth, Acquisitions, and Margin Expansion Drive Outlook

Engineered components manufacturer for critical industries ITT Inc. (NYSE: ITT) announced better-than-expected revenue in Q3 CY2025, with sales up 12.9% year on year to $999.1 million. Its non-GAAP profit of $1.78 per share was 6.7% above analysts’ consensus estimates.

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StockStory’s Take

ITT delivered notable results in Q3, as the market responded positively to outperformance in both revenue and profit relative to Wall Street expectations. Management highlighted organic growth across all core segments, with Industrial Process and Connect & Control Technologies leading gains due to robust project execution and healthy demand in aerospace and defense. CEO Luca Savi credited share gains in China’s automotive market and strong execution in the company’s newly acquired businesses as key contributors. Savi also pointed to significant progress in product innovation and operational efficiency, particularly the expansion of the VIDAR motor line and improved productivity across manufacturing sites.

Looking ahead, ITT’s raised full-year guidance reflects management’s confidence in continued demand for its core products and successful integration of recent acquisitions. Savi emphasized that a healthy order backlog, momentum in defense and rail, and expanding opportunities in the energy transition position the company for ongoing growth. CFO Emmanuel Caprais noted, “Our margin outlook remains strong,” driven by productivity gains and pricing actions, particularly in Connect & Control Technologies. The company is also investing in innovation and capacity expansion to support long-term targets, with a focus on capturing value in high-growth end markets and executing on operational improvements.

Key Insights from Management’s Remarks

Management attributed Q3 performance to broad-based organic growth, strong project pipeline execution, and contributions from recent acquisitions, while emphasizing ongoing investments in innovation and operational productivity.

• Project execution in Industrial Process: Robust demand for pumps and related projects, particularly in energy and the Middle East, drove double-digit organic growth. The team in Saudi Arabia achieved a 95% win rate on project quotes, supporting order momentum and future backlog.
• Acquisitions driving growth: The integration of Svanehøj and kSARIA exceeded expectations, with both businesses delivering high order growth and positive margin impact. Svanehøj entered the U.S. land-based terminal market and secured a major LPG pumping project, expanding ITT’s presence in energy infrastructure.
• Automotive share gains in China: Motion Technologies continued to outperform global auto production, fueled by platform wins with major Chinese original equipment manufacturers (OEMs) like BYD and Geely. Management noted that 2/3 of revenue growth stemmed from volume, indicating market share gains rather than price increases.
• Margin improvements through productivity: Across segments, ITT delivered margin expansion by offsetting inflation with cost savings and operational efficiencies. CCT margins expanded, aided by pricing negotiations and ongoing automation efforts, while temporary acquisition-related amortization is set to phase out next quarter.
• Innovation pipeline advances: Investments in new products, such as the VIDAR industrial motor and Geo-Pad for OEM partners, supported ITT’s strategy to differentiate through technology. The VIDAR motor line is now installed with multiple North American energy firms, and more innovation launches are planned.

Drivers of Future Performance

Management expects continued revenue growth and margin expansion, supported by strong backlog, end-market demand, and further operational improvements, but notes some normalization in order trends and inflationary headwinds.

• Backlog and order pipeline: A sizable backlog, particularly in Industrial Process and defense-related businesses, provides visibility into coming quarters. The funnel of active project quotes is up sequentially and regionally, especially in the Middle East and energy transition markets, underpinning management’s growth expectations.
• Margin expansion initiatives: ITT anticipates continued margin improvement, excluding M&A, through productivity programs, automation, and pricing actions. The company expects Connect & Control Technologies to benefit from price negotiations and the end of kSARIA’s temporary amortization, while further operational gains are targeted in Motion Technologies.
• Risks and market normalization: Management flagged the potential for order moderation in acquired businesses given especially strong first-half growth, along with inflation and competitive dynamics in automotive and aerospace. While the pricing environment remains favorable in CCT, ITT noted that more strategic pricing will be needed in other segments to sustain profitability.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be watching (1) the pace of backlog conversion, especially in Industrial Process and Connect & Control Technologies, (2) the integration and performance of recent acquisitions like Svanehøj and kSARIA, and (3) margin sustainability as inflation and competitive pressures persist. Additionally, we will track progress on innovation milestones, such as new product launches and the ability to capture share in high-growth energy and defense markets.

ITT currently trades at $194.95, up from $176.10 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).

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