Illinois Tool Works, Inc.

Q2 results were very strong—new “peak” profitability - Revenue +6.1% YoY: +4.5% organic, +1.4% FX, +0.2% acquisitions - Operating margin +40 bps to 26.7% (and enterprise initiatives contributed ~120 bps) - Operating income $1.15B (+7.4% YoY) = most profitable quarter in ITW’s history - GAAP EPS +10% to $2.84 - Free cash flow +41% with 77% conversion (seasonal), supporting shareholder returns

Growth is accelerating vs Q1 and is concentrated in “CapEx / semiconductor-adjacent” + CBI - Organic growth rate acceleration: sequential revenue +7% (vs ~+2% historical average), with all 7 segments beating their typical sequential rate - Key segment growth drivers: - Welding organic +14% (equipment +19%), best-in-class margin 32.4% - Test & Measurement + Electronics organic +10%; Electronics +21% (~40% of segment) and strong semi-manufacturing related demand - Polymers & Fluids organic +7%; margins 29.3% (record), including Automotive Aftermarket +7% and strong biopharma/general industrial - Customer-Back Innovation (CBI) is a standout catalyst: - CBI contributed ~3% to revenue growth in the first half (vs 2.4% for full-year 2025) - Management emphasized CBI is incremental new-product revenue from products introduced in the last 3 years (cannibalization netted out) and is an incentive metric

Guidance upgrade: raised top line + bottom line; margin guidance unchanged due to temporary price/cost timing - Full-year organic growth raised to 3.5% midpoint (from prior 1–3%, now 3–4%) - GAAP EPS raised by $0.15 to $11.35–$11.55 (midpoint $11.45) = ~9% YoY growth - Operating margin guidance unchanged at 26.5%–27.5% - Implied incremental margin ~40%, but Q2 margins were pressured ~40 bps YoY by inflation-to-price timing lags - Management expects the lag to continue into Q3 (some progress) and improve further in Q4 as pricing catches up - Cash return plan: - FCF conversion projected >100% of net income - Share repurchases ~ $1.5B for 2026 - Q2 repurchased $750M (~1% of shares) at ~$255, with some Q3 timing pulled forward