Free cash flow generation remains highly volatile, with margins swinging from a low of 11.1% in 2025Q2 to a peak of 25.3% in 2024Q4 due to cyclical working capital requirements.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Cash from Operations | 2.53B | 3.13B | 3.28B | 3.54B | 2.35B | 2.56B | 2.81B | 3B | 2.81B | 2.4B | 2.3B | 2.3B | 1.62B | 2.53B | 2.07B | 1.96B | 1.56B | 2.15B | 2.22B | 2.48B | 2.07B | 1.85B | 1.53B | 1.37B | 1.29B | 1.35B | 1.12B | 1.04B | 721.5M | 660.3M | 629.4M |
| Operating CF Margin % | - | 19.48% | 20.64% | 21.97% | 14.74% | 17.69% | 22.32% | 21.23% | 19.03% | 16.78% | 16.93% | 17.15% | 11.16% | 17.88% | 11.56% | 11% | 9.83% | 15.47% | 14.01% | 15.36% | 14.7% | 14.29% | 13.06% | 13.64% | 13.61% | 14.54% | 11.24% | 11.11% | 12.77% | 12.65% | 12.6% |
| Operating CF Growth % | -118.91% | -4.72% | -7.29% | 50.72% | -8.17% | -8.91% | -6.28% | 6.55% | 17.03% | 4.34% | 0.13% | 42.26% | -36.08% | 22.01% | 5.93% | 25.32% | -27.29% | -3.43% | -10.52% | 20.25% | 11.89% | 20.53% | 11.93% | 6.21% | -4.61% | 20.37% | 8.28% | 43.67% | 9.27% | 4.91% | 43.86% |
| Net Income | 3.13B | 3.07B | 3.49B | 2.96B | 3.03B | 2.69B | 2.11B | 2.52B | 2.56B | 1.69B | 2.04B | 1.9B | 1.23B | 1.77B | 2.4B | -13.04M | 1.53B | 947.01M | 1.52B | 1.87B | 1.72B | 1.49B | 1.34B | 1.02B | 712.59M | 805.66M | 957.98M | 841.1M | 672.8M | 587M | 486.3M |
| Depreciation & Amortization | 302M | 397M | 402M | 395M | 410M | 410M | 427M | 426M | 461M | 462M | 470M | 477M | 507M | 613M | 613M | 594.01M | 548.28M | 674.92M | 691.91M | 524.74M | 443.91M | 383.07M | 385.8M | 306.55M | 305.75M | 386.31M | 413.37M | 343.3M | 211.8M | 185.4M | 178.2M |
| Stock-Based Compensation | 36M | 0 | 61M | 69M | 63M | 53M | 42M | 41M | 40M | 36M | 39M | 41M | 39M | 37M | 54M | 56.37M | 56.44M | 51.86M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 0 | -17M | -176M | -88M | -150M | -148M | -30M | 32M | 34M | 64M | -263M | -11M | 55M | 6M | 243M | -175.92M | -150.37M | -477.58M | -95.86M | -5.52M | 167M | 69.75M | 143.21M | 203.96M | -60.47M | 38.61M | -21.11M | 105.3M | 59.9M | -7.8M | -12.6M |
| Other Non-Cash Items | -3.7B | 86M | -476M | -4M | -193M | -14M | 10M | -56M | 1M | -5M | -17M | -1M | -54M | -61M | -946M | 2.05B | -31M | 45.87M | 89.97M | -48.62M | -50.24M | -44.02M | -126.68M | -63.88M | 146.34M | -70.28M | -87.05M | -101.4M | -70.4M | -52.6M | -48.4M |
| Working Capital Changes | 2.77B | -406M | -18M | 210M | -816M | -438M | 249M | 31M | -288M | 158M | 38M | -106M | -159M | 163M | -287M | -571.02M | -389.76M | 904.51M | 17.86M | 143.83M | -212.39M | -57.14M | -208.99M | -101.57M | 184.54M | 190.72M | -140.78M | -151.7M | -152.6M | -51.7M | 25.9M |
| Change in Receivables | 3.41B | -92M | 34M | 64M | -461M | -240M | 95M | 40M | -60M | -138M | -132M | -42M | -70M | -83M | -13M | -302.95M | -238.21M | 336.87M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | 1.8B | 34M | 176M | 360M | -455M | -450M | 43M | 98M | -108M | -81M | 9M | 25M | -10M | 24M | 82M | -50.58M | -177.76M | 572.68M | -104.79M | -4.54M | -60.2M | 104.42M | -177.05M | 108.18M | 71.84M | 158.5M | 3.94M | 7.4M | 18.5M | 6.2M | 58.9M |
| Change in Payables | -2.24B | -29M | -43M | -14M | 35M | 37M | 19M | -16M | -46M | 39M | -3M | -30M | -20M | 8M | -21M | -54.98M | 69.45M | -84.53M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -429M | -521M | -144M | -403M | -110M | -984M | -214M | -183M | -325M | -251M | -532M | -210M | 2.84B | -456M | 1.05B | -1.58B | -606.84M | -504.12M | -1.76B | -924.05M | -1.27B | -784.4M | -811.33M | -483.86M | -333.26M | -661.97M | -1.01B | -928.4M | -890.4M | -254.6M | -521.4M |
| Capital Expenditures | -323M | -419M | -437M | -455M | -412M | -296M | -236M | -326M | -364M | -297M | -273M | -284M | -361M | -368M | -382M | -353.41M | -286.17M | -247.1M | -355.47M | -353.36M | -301.01M | -293.1M | -282.56M | -258.31M | -271.42M | -256.56M | -313.91M | -1.14B | -959.9M | -178.7M | -168.7M |
| CapEx % of Revenue | 1.99% | 2.61% | 2.75% | 2.82% | 2.59% | 2.05% | 1.88% | 2.31% | 2.46% | 2.07% | 2.01% | 2.12% | 2.49% | 2.6% | 2.13% | 1.99% | 1.8% | 1.78% | 2.24% | 2.19% | 2.14% | 2.27% | 2.41% | 2.57% | 2.87% | 2.76% | 3.14% | 12.23% | 17% | 3.42% | 3.38% |
| Acquisitions | -112M | -107M | 280M | 27M | 276M | -731M | 1M | 116M | 1M | -1M | -450M | 23M | -27M | -367M | 397M | -1.29B | -370.44M | -264.42M | -1.44B | -652.3M | -1.34B | -626.92M | -587.78M | -203.73M | -188.23M | -556.2M | -798.84M | 0 | 22.1M | 17.1M | 20.8M |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -1M | -2M | 2M | -2M | 14M | -3M | -3M | -18M | 22M | 4M | 170M | 29M | 3.2B | 239M | 752M | 29.65M | 40.5M | 4.77M | 32.98M | 19.16M | 22.98M | 35.78M | 38.05M | 51.9M | 243.36M | 37.6M | 39.34M | 80.1M | 37.2M | -30M | -298.5M |
| Cash from Financing | -2.16B | -2.74B | -3.19B | -2.78B | -3B | -2.56B | -2.05B | -2.33B | -3.96B | -1.67B | -2.25B | -2.53B | -3.55B | -1.14B | -1.57B | -321.45M | -1.05B | -1.25B | -461.88M | -1.39B | -575.23M | -1.27B | -1.83B | -340.8M | -228.64M | -556.77M | -159.82M | 23.6M | 80M | -336.5M | -91.9M |
| Debt Issued (Net) | 306M | 508M | -8M | 294M | 276M | -141M | -4M | 422M | -851M | 197M | 465M | 151M | 1.34B | 1.26B | 1.01B | 1.15B | -190.09M | -736.47M | 1.47B | 777.39M | 178.44M | 93.13M | 127.49M | -95.77M | -3.5M | -308.96M | 38.27M | 245.8M | 343.8M | -249.8M | -14.8M |
| Equity Issued (Net) | -1.1B | -1.44B | -1.45B | -1.5B | -1.72B | -1B | -640M | -1.5B | -1.98B | -916M | -1.92B | -1.94B | -4.2B | -1.9B | -1.74B | -797M | -235M | 101.73M | -1.33B | -1.64B | -367.91M | -1.02B | -1.65B | 40.36M | 44.38M | 0 | 25.41M | -23.1M | -26.6M | -37.5M | 5.5M |
| Dividends Paid | -1.34B | -1.78B | -1.7B | -1.61B | -1.54B | -1.46B | -1.38B | -1.32B | -1.12B | -941M | -821M | -742M | -711M | -528M | -865M | -680.28M | -636.2M | -619.68M | -598.69M | -502.43M | -398.85M | -335.09M | -304.58M | -285.4M | -272.32M | -249.14M | -223.01M | -183.6M | -127.4M | -107.1M | -85.5M |
| Share Repurchases | -1.13B | -1.5B | -1.5B | -1.5B | -1.75B | -1B | -706M | -1.5B | -2B | -1B | -2B | -2B | -4.35B | -2.11B | -2.02B | -950M | -350M | 0 | -1.39B | -1.76B | -446.88M | -1.04B | -1.73B | 0 | 0 | 0 | 0 | -45M | -45.3M | -53.4M | 0 |
| Other Financing | -14M | -32M | -38M | 39M | -13M | 40M | -26M | 73M | -11M | -14M | 17M | 8M | 19M | 24M | 16M | 7.83M | 13.35M | 4.05M | 4M | -23.79M | 13.09M | -7.12M | 0 | 12K | 2.79M | 1.33M | -493K | -15.5M | -86.3M | 79.2M | 2.9M |
| Net Change in Cash | -22M | -97M | -117M | 357M | -819M | -1.04B | 583M | 477M | -1.59B | 622M | -618M | -900M | 372M | 839M | 1.6B | -8.49M | -128.73M | 575.82M | -84.57M | 237.32M | 219.79M | -296.97M | -1.02B | 626.8M | 775.46M | 130.93M | -81.66M | 123.4M | -92.3M | 48.2M | 21M |
| Free Cash Flow | 2.21B | 2.71B | 2.84B | 3.08B | 1.94B | 2.26B | 2.57B | 2.67B | 2.45B | 2.1B | 2.03B | 2.02B | 1.25B | 2.16B | 1.69B | 1.6B | 1.27B | 1.9B | 1.87B | 2.13B | 1.77B | 1.55B | 1.25B | 1.11B | 1.02B | 1.09B | 808.5M | -104.9M | -238.4M | 481.6M | 460.7M |
| FCF Margin % | 13.63% | 16.87% | 17.89% | 19.15% | 12.15% | 15.64% | 20.45% | 18.92% | 16.57% | 14.71% | 14.92% | 15.03% | 8.66% | 15.28% | 9.43% | 9.01% | 8.03% | 13.69% | 11.77% | 13.18% | 12.56% | 12.02% | 10.65% | 11.06% | 10.75% | 11.78% | 8.1% | -1.12% | -4.22% | 9.23% | 9.22% |
| FCF Growth % | -22.31% | -4.82% | -7.78% | 59.3% | -14.37% | -12.06% | -3.67% | 9.07% | 16.25% | 3.75% | 0.69% | 60.56% | -41.9% | 27.81% | 5.45% | 25.73% | -32.9% | 1.72% | -12.37% | 20.73% | 13.62% | 24.33% | 12.52% | 9.15% | -7.05% | 35.37% | 870.73% | 56% | -149.5% | 4.54% | 60.36% |
| FCF per Share | 7.65 | 9.26 | 9.55 | 10.16 | 6.23 | 7.15 | 8.08 | 8.20 | 7.26 | 6.07 | 5.68 | 5.44 | 3.10 | 4.81 | 3.57 | 3.24 | 2.53 | 3.78 | 3.60 | 3.83 | 3.09 | 2.68 | 2.03 | 1.80 | 1.65 | 1.79 | 1.33 | -0.17 | -0.39 | 0.96 | 0.93 |
| FCF Conversion (FCF/Net Income) | 0.71x | 1.02x | 0.94x | 1.20x | 0.77x | 0.95x | 1.33x | 1.19x | 1.10x | 1.42x | 1.13x | 1.21x | 0.55x | 1.51x | 0.72x | 0.94x | 1.02x | 2.27x | 1.46x | 1.33x | 1.20x | 1.24x | 1.14x | 1.34x | 1.81x | 1.68x | 1.17x | 1.23x | 1.07x | 1.12x | 1.29x |
| Interest Paid | 226M | 279M | 248M | 260M | 199M | 197M | 194M | 223M | 247M | 240M | 212M | 200M | 236M | 240M | 211M | 168M | 175M | 153.97M | 157.18M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 913M | 1.05B | 1.18B | 1.03B | 993M | 731M | 591M | 742M | 838M | 1.02B | 920M | 775M | 1.5B | 602M | 1.13B | 978M | 960M | 364.38M | 619.88M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Stagnant Organic Revenue Growth
As reported in recent financial statements, ITW's operating cash flow to net income ratio has fluctuated significantly, ranging from 0.72 to 1.49, which suggests that the company's cash conversion efficiency is highly sensitive to quarterly working capital swings rather than consistent earnings-to-cash alignment.
The volatility in the OCF/NI ratio indicates that while net income remains structurally strong, the actual cash generation is frequently impacted by timing differences in receivables and payables. Investors should monitor whether this variability reflects genuine operational friction or merely the inherent lumpiness of the company's diverse industrial business segments.
Based on the provided quarterly data, ITW's free cash flow margins have demonstrated notable inconsistency, swinging from a low of 11.1% in 2025Q2 to a peak of 25.3% in 2024Q4, highlighting a trajectory that remains tethered to cyclical working capital requirements rather than steady-state margin expansion.
The lack of a clear upward trend in FCF margins suggests that the company's ability to convert revenue into cash is currently constrained by its operational structure. This inconsistency warrants further investigation into whether the 80/20 model is effectively managing cash flow during periods of lower organic growth.
According to historical cash flow data, ITW experiences substantial quarterly fluctuations in working capital, with swings as large as $3.0 billion in 2026Q1, which suggests that the company's cash flow profile is heavily influenced by the timing of inventory and accounts receivable management.
These significant shifts in working capital indicate that the company's cash flow is not as predictable as its stable operating margins might imply. The recurring need to manage these large swings suggests that operational efficiency may be periodically disrupted by supply chain or demand-side volatility.
As evidenced by the consistent $375 million quarterly share repurchases and steady dividend payments, ITW prioritizes shareholder returns, though the company's reliance on these outflows appears to consume a significant portion of its generated free cash flow, potentially limiting flexibility for larger strategic acquisitions.
The commitment to returning capital to shareholders is clear, yet the reliance on these outflows during periods of lower FCF generation may limit the company's ability to pivot toward growth-oriented investments. This strategy appears to favor stability over aggressive expansion, which may be appropriate given the current industrial environment.
Quick answers to the most common questions about buying ITW stock.
Illinois Tool Works Inc. (ITW) generated $3.13B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Illinois Tool Works Inc. (ITW) generated $2.71B in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Illinois Tool Works Inc. (ITW) spent $419.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Illinois Tool Works Inc. (ITW) returned $1.78B to shareholders via cash dividends and spent $1.50B on share repurchases. This shows the company's commitment to returning capital to its equity investors.