ITW · 10-Q · 2026Q2 · Full report

Operating Expense Trends

ILLINOIS TOOL WORKS INC · 2026-08-06 · Importance 49 · Surprise 32 · No source text

Second-quarter selling, administrative, and research and development expense increased 6.1% to $735 million, while year-to-date expense increased 4.1% to approximately $1.5 billion. The expense ratio was 17.1% in the quarter, unchanged from 2025, and 17.5% year to date, down from 17.7%. Enterprise initiatives offset higher selling, advertising and employee-related expenses in the quarter and drove the year-to-date ratio improvement. Cost of revenue increased 5.8% to $2.4 billion in the quarter and 5.1% to $4.7 billion year to date, primarily because of higher revenue and employee-related expenses.

Key facts

• Cost of revenue was $2,403 million and $2,271 million in the second quarter of 2026 and 2025, respectively. source
• Selling, administrative, and research and development expenses were $735 million and $693 million in the second quarter of 2026 and 2025, respectively, an increase of 6.1%. source
• Other income (expense) was income of $12 million in the second quarter of 2026 versus $4 million in the prior year period and $32 million in the year-to-date period of 2026 versus $16 million in the prior year period. source
• Three months ended June 30, 2026 additions to plant and equipment: $(92) million. source
• Cost of revenue as a percent of operating revenue was 55.9% in Q2 2026 and 56.0% in Q2 2025. source
• Selling, administrative, and research and development expenses as a percent of operating revenue were 17.1% in Q2 2026 and 17.1% in Q2 2025. source
• Amortization and impairment of intangible assets was 0.4% of operating revenue in Q2 2026 and 0.5% in Q2 2025. source
• As of December 31, 2025, the Company had 88 divisions with approximately 43,000 people in 49 countries. source

Impact estimates