ITT INC. (ITT)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(In millions, except per share amounts, unless otherwise stated)

OVERVIEW

ITT Inc., through its worldwide subsidiaries, is a diversified manufacturer of highly engineered critical components and customized technology solutions for the transportation, industrial, energy, and health and nutrition markets. We manufacture components that are integral to the operation of systems and manufacturing processes in these key markets. Our products enable functionality for applications where reliability and performance are critically important to our customers and the users of their products.

Our businesses share a common, repeatable operating model centered on our engineering capabilities. Each business applies its technology and engineering expertise to solve our customers’ most pressing challenges. Our applied engineering provides a valuable business relationship with our customers given the critical nature of their applications. This in turn provides us with unique insight to our customers’ requirements and enables us to develop solutions to assist our customers in achieving their business goals. Our technology and customer intimacy produce opportunities to capture recurring revenue streams, aftermarket opportunities and long-lived platforms from original equipment manufacturers (OEMs).

Our product and service offerings are organized into three reportable segments: Flow Technologies (FT), Motion Technologies (MT), and Connect & Control Technologies (CCT). Flow Technologies, formerly Industrial Process, was renamed following our acquisition of SPX FLOW to reflect the expanded scale and capabilities of the combined operations. See Note 3, Segment Information, to the Consolidated Condensed Financial Statements for a summary description of each segment. Additional information is also available in our 2025 Annual Report within Part I, Item 1, “Description of Business.”

All comparisons included within Management’s Discussion and Analysis of Financial Condition and Results of Operations refer to the comparable three and six months ended June 28, 2025, unless stated otherwise.

Effective January 1, 2026, the Company is presenting intangible amortization as a separate line item within the consolidated statements of operations to enhance transparency and comparability. For additional information on the change in presentation, refer to Note 1, Description of Business and Basis of Presentation. Management’s discussion and analysis of the financial condition and results of operations have been adjusted to reflect the change in presentation.

Global Macroeconomic Conditions

Global macroeconomic conditions continue to evolve amid ongoing geopolitical uncertainty, trade policy developments, and shifting market dynamics. While these factors have created areas of variability, the Company has maintained disciplined execution and continued strategic investment across its businesses. For the remainder of 2026, we expect demand to remain generally resilient, although the outlook remains influenced by geopolitical developments, trade policy actions, and energy market volatility. We believe our diversified portfolio, global operating footprint, and focus on operational excellence position us to respond effectively to changing market conditions and support long-term value creation.

Geopolitical and Energy Market Risk: Geopolitical developments, including ongoing conflict and instability in the Middle East, continue to influence global supply chains, trade flows, and energy markets. During the second quarter of 2026, disruptions affecting the Strait of Hormuz and broader regional energy infrastructure contributed to heightened volatility in oil, natural gas, and shipping markets, although diplomatic efforts and ceasefire discussions have supported a partial normalization of certain trade routes and energy flows. Despite these developments, energy prices, logistics costs, and market sentiment remain sensitive to further escalation or renewed disruptions. At the same time, our growing presence in critical flow technologies, energy‑related applications, and resilient aftermarket channels helps balance exposure to near‑term volatility. Additionally, select programs within CCT may benefit from sustained or increased investments in defense, security, and national infrastructure. Overall, our continued portfolio evolution and diversified end‑market exposure are intended to enhance durability and adaptability across macroeconomic and geopolitical cycles.

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Tariffs and Trade Policies: Ongoing tariff regimes and changes in global trade frameworks may influence input costs, sourcing decisions, and customer demand patterns. Trade policy uncertainty remains elevated as governments continue to evaluate tariff programs, industrial policies, and supply-chain security initiatives. While judicial and regulatory developments have provided clarity regarding certain tariffs imposed in prior periods, including the establishment of processes that permit eligible companies to seek refunds or recovery of certain previously paid tariffs, trade actions implemented under alternative statutory authorities, ongoing Section 301 investigations, and evolving regional trade arrangements continue to create uncertainty for global manufacturers. We are pursuing recovery opportunities where appropriate and continue to monitor developments in global trade policy; however, the timing and ultimate amount of any potential recoveries, as well as the impact of future trade actions or policy changes, remain uncertain.

Workforce Availability and Cost: Labor markets remain competitive in certain geographies and functions, particularly for specialized technical and engineering roles, although labor availability has improved in some regions relative to recent years. Wage inflation has moderated relative to prior periods but remains above historical norms in select markets. We continue to address these dynamics through targeted talent development, workforce planning, selective automation, and digital productivity initiatives, which enhance operational efficiency while supporting high levels of quality, safety, and on‑time delivery. These initiatives strengthen our long‑term operational capabilities and support sustainable growth across varying demand environments.

Technology Transformation: Advancements in automation, data analytics, artificial intelligence, and digital manufacturing platforms continue to accelerate across industrial markets and are driving increased investment across global technology value chains. We view these developments as opportunities to further enhance efficiency, reliability, and customer value; however, they also expose us to additional cybersecurity risks and the possibility that our competitors may adopt and leverage these technologies more rapidly or effectively. We are continuing to expand digital investments across operations and product lines, including technologies that improve asset performance, energy efficiency and total costs for customers.

Supply Chain and Cost Inflation: Supply chain conditions have generally stabilized compared with the disruption levels experienced in prior years; however, we continue to experience variability across select commodities, electronic components, transportation networks, and specialty materials. Ongoing geopolitical developments, trade restrictions, logistics disruptions, and supplier concentration risks continue to create uncertainty within global supply chains. While inflationary pressures have moderated in several input categories, energy costs, freight expenses, and certain labor and commodity costs remain elevated and subject to volatility. We continue to utilize dual-sourcing strategies, long-term supplier agreements, localized sourcing initiatives, inventory management practices, and productivity programs to support supply continuity and mitigate cost increases. Although these actions have helped reduce risk exposure, future disruptions could affect our production schedules, lead times, costs, and operating margins.

Sustainability and Energy Transition: Long-term trends related to energy transition, infrastructure modernization, environmental regulation, energy security, and industrial efficiency continue to influence customer investment decisions. Recent geopolitical developments have reinforced the importance of reliable energy supplies, grid resiliency, domestic infrastructure investment, and diversified energy sources. As a result, many customers are balancing long-term decarbonization objectives with near-term energy affordability, reliability, and security considerations. These trends continue to create opportunities across portions of our portfolio, particularly in energy-efficient pumping and motion technologies, critical flow applications, cryogenic systems, compressor technologies, and solutions supporting liquefied natural gas, ammonia, hydrogen, carbon capture, industrial electrification, and other energy-related infrastructure investments. We continue to invest in innovation, sustainability initiatives, and product development intended to address evolving customer requirements and support long-term profitable growth.

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EXECUTIVE SUMMARY

The following table provides a summary of key performance indicators for the second quarter of 2026 as compared to the second quarter of 2025. There were four additional working days in the quarter versus the prior

year.

*Represents a non-GAAP financial measure

Further details related to these results are contained elsewhere in the Discussion of Financial Results section. Refer to the section titled “Key Performance Indicators and Non-GAAP Measures” for definitions and reconciliations between GAAP and non-GAAP metrics, including organic revenue, adjusted operating income, adjusted operating margin, and adjusted EPS.

Our second quarter 2026 results are summarized below:

•Revenue of $1,473.1 increased by $500.7 including $359.6 from acquisition contributions and $17.6 from favorable foreign currency translation. Organic revenue increased by $123.5, or 12.7%, led by aerospace and defense in CCT, growth in pump projects and valves in FT, and increased aftermarket demand for Friction and KONI defense in MT.

•Operating income of $180.3 increased by $5.2, or 3.0%, primarily due to incremental volume and pricing actions partially offset by an increased intangible amortization expense of $51.0 related to SPX FLOW. Adjusted operating income increased by $104.6, or 54.9%, driven by a full quarter of SPX FLOW results.

•Income from continuing operations was $0.95 per diluted share, a decrease of $0.57 as compared to the prior year, primarily due to acquisition-related costs. Adjusted income from continuing operations was $2.08 per diluted share, an increase of $0.32, or 18.2% compared with the prior year period. The increase was primarily driven by adjusted operating income growth from all segments, partially offset by higher interest expense, effective tax rate and weighted-average share count resulting from the acquisition of SPX FLOW.

DISCUSSION OF FINANCIAL RESULTS

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OVERVIEW

ITT Inc., through its worldwide subsidiaries, is a diversified manufacturer of highly engineered critical components and customized technology solutions for the transportation, industrial and energy markets. Our product and service offerings are organized into three segments: Motion Technologies (MT), Industrial Process (IP), and Connect & Control Technologies (CCT). Refer to Part I, Item 1, Description of Business, for a further overview of our company, segments, products and service offerings, and other information about the business.

Effective January 1, 2025, the Company changed its method of determining the cost for certain inventories from a last-in, first-out (LIFO) to first-in, first out (FIFO) for all inventories previously accounted for under LIFO. For additional information on the change in accounting principle, refer to Note 1, Description of Business and Basis of Presentation. Management’s discussion and analysis of financial condition and results of operations have been adjusted to reflect the change in accounting principle.

EXECUTIVE SUMMARY

During 2025, we delivered strong financial results, which included revenue and operating income growth, operating margin expansion, EPS growth and effective deployment of capital. The following table provides a summary of key performance indicators for 2025 in comparison to 2024.

See the section titled "Key Performance Indicators and Non-GAAP Measures" for a definition and reconciliation of organic revenue, adjusted operating income, adjusted operating margin, and adjusted EPS.

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Our 2025 results include:

•Revenue of $3,938.5 increased $307.8, or 8.5%, due to growth in each of our three business segments. IP drove significant growth with pump projects, CCT saw strength across connectors and components within the aerospace and defense markets, and MT continued to outperform with share gains in automotive and strength in rail, resulting in total ITT organic revenue growth of 4.8% for the year. In addition, the 2025 results included incremental revenue of $161.5, primarily from our 2024 acquisition of kSARIA, and benefitted from favorable foreign currency translation of $64.6. The 2024 Wolverine divestiture reduced our total revenue growth by $89.2.

•Operating income of $684.5 increased $6.4, as benefits from higher volume, productivity and pricing, and contributions from acquisitions more than offset the prior year gain on sale of the Wolverine business of $47.8, cost inflation, increased restructuring, acquisition-related expenses, and unfavorable sales mix. Adjusted operating income increased 11.2%.

•Income from continuing operations was $6.11 per diluted share, a decrease of 3.3%, which primarily reflects the prior year gain on sale of Wolverine, a higher effective tax rate, and increased interest expense, partially offset by a lower weighted average share count. Adjusted EPS was $6.72, an increase of 14.3%, reflecting the strength in core operations throughout the year.

Throughout 2025, we remained committed to creating value through effective capital deployment, which included the following:

•Capital expenditures over $120 for the second year in a row, reflecting our continued commitment to fund future growth through capacity expansion, productivity and innovation.

•Executed repurchases of 3.8 shares of common stock on the open market for $521.0.

•$111.0 in dividend payments to our shareholders. Our dividends declared in 2025 of $1.40 per share represented a 10% increase over the dividends per share declared of $1.28 in 2024.

•Enter into a definitive agreement to acquire SPX FLOW for $4,775 to be funded through a combination of cash and equity.

Global Macroeconomic Conditions

Throughout 2025, global macroeconomic conditions evolved against a backdrop of geopolitical uncertainty and shifting market demands. While these dynamics created areas of variability, the Company continued to apply disciplined execution and strategic investment across its businesses. In 2026 we expect demand to remain firm, but with variation between industrial end markets. In addition, changes in tariffs and trade policies, geopolitical and energy market risk, workforce availability and cost, technology transformation and cost inflation are factors that we are watching that may impact our performance going forward.

Tariffs and Trade Policies: Ongoing tariff regimes and changes in global trade frameworks may influence input costs and sourcing patterns. At the same time, these dynamics reinforce the value of our multi‑sourcing, localization, and regional manufacturing strategies. We also continue to monitor developments associated with the United States‑Mexico‑Canada Agreement (USMCA) and ensure that our operations, supply‑chain partners, and cross‑border flows remain compliant with its requirements. Adhering to USMCA rules of origin, documentation standards, and regional content thresholds helps support stable access to North American markets, reduces potential trade-related disruptions, mitigates trade duties, and lowers costs.

Geopolitical and Energy Market Risk: Geopolitical developments may impact supply chains, energy pricing trends, and defense-related procurement. For example, while such factors can shift project timing in certain Industrial Process markets, our growing presence in critical flow technologies and resilient aftermarket channels helps balance exposure. Moreover, select programs in Connect & Control Technologies may benefit from sustained investments in defense and security. Overall, our portfolio evolution aims to strengthen durability across macro cycles.

Workforce Availability and Cost: Tight labor markets and specialized skill requirements remain industry‑wide considerations. We continue to address these trends through talent development and selective automation, which help maintain high levels of quality and delivery performance. These efforts strengthen our long‑term operational capabilities and support sustainable growth.

Technology Transformation: Accelerating advancements in automation, data analytics, and artificial intelligence continue to reshape manufacturing and industrial solutions. We view this shift as an opportunity to further enhance efficiency, reliability, and customer value but it also exposes us to additional cyber related risks and the possibility

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that our competitors are able to adapt and utilize this technology at a faster pace and with greater success than we do, We are expanding digital investments across operations and product lines, including technologies that improve energy efficiency and reduce operating costs for customers.

Supply Chain and Cost Inflation: We continue to experience variability in material availability, logistics conditions, and input costs caused by supply chain disruptions, geopolitical developments and tariff pressures. We are using dual‑sourcing strategies, long‑term agreements, strengthened supplier partnerships, and targeted inventory buffers to support consistent delivery performance and help mitigate potential impacts.

Sustainability and Energy Transition: Evolving environmental expectations and customer decarbonization initiatives are influencing product design and purchasing priorities. These trends create meaningful opportunities across our portfolio, particularly in energy efficient solutions, advanced flow technologies, and cryogenic/compressor systems supporting liquid natural gas, ammonia, hydrogen, and CO₂ applications. We are continuing to invest in product innovation and operational sustainability, which enhances our ability to support customers in meeting their current and future requirements.

Agreement to Acquire SPX FLOW

We continue to grow our core businesses and enhance the ITT portfolio further through mergers and acquisitions, reshaping the portfolio towards attractive pump applications and defense and aerospace interconnect markets, while reducing our automotive exposure. On December 4, 2025, we entered into a Membership Interest Purchase Agreement (the "Purchase Agreement") with LSF11 Redwood Parent, L.P., LSF11 Redwood TopCo LLC (the "Target") and ITT Industries Holdings, Inc., our wholly owned subsidiary, to acquire SPX FLOW, Inc. ("SPX FLOW"), a subsidiary of the Target and a leading provider of pumps, valves, mixers, aftermarket services, and other flow and process solutions (the "Acquisition"), for an aggregate purchase price of approximately $4,775 payable at closing of the Acquisition, comprised of $4,075 in cash and 3,839,824 shares of our common stock, subject to customary closing conditions, including regulatory approvals. We expect the acquisition of SPX FLOW to add critical equipment and adjacent flow and process technologies that will extend ITT’s capabilities to address complex customer challenges across a wide variety of key growth markets, including food & beverage, personal care, industrial, chemical, energy, and mining.

DISCUSSION OF FINANCIAL RESULTS

2025 VERSUS 2024

All comparisons included within the Discussion of Financial Results for 2025 versus 2024 refer to results for the year ended December 31, 2025 compared to the year ended December 31, 2024, unless stated otherwise.

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REVENUE

The following table summarizes the revenue derived from each of our segments.

(a)See the section titled "Key Performance Indicators and Non-GAAP Measures" for a definition and reconciliation of organic revenue.

Motion Technologies

MT revenue for the year ended December 31, 2025 decreased $19.6 primarily driven by the prior year divestiture of the Wolverine business which generated $89.1 of revenue during 2024. This decline was partially offset by strength in Friction original equipment reflecting our market outperformance and growth across our KONI business. The current year also benefited from favorable foreign currency translation $44.0. Excluding the impact from the divestiture and foreign currency translation, organic revenue increased $25.5, or 1.9%.

Industrial Process

IP revenue for the year ended December 31, 2025 increased $135.2, driven primarily by growt

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