Illinois Tool Works Inc. stock research
FY2025 Q3
Illinois Tool Works (ITW) Gross Margin — Quarter Ended Sep 30, 2025
Revenue remained stable compared to both the prior quarter and the same quarter last year, while gross profit increased, leading to an improved gross margin. Cost of revenue was unchanged, so the rise in gross profit directly lifted margin.
Gross margin takeaway
Quarter ended Sep 30, 2025 · FY2025 Q3
Revenue remained stable compared to both the prior quarter and the same quarter last year, while gross profit increased, leading to an improved gross margin. Cost of revenue was unchanged, so the rise in gross profit directly lifted margin.
- The gross margin improvement was driven by higher gross profit on flat revenue, with cost of revenue unchanged. This indicates that the increase in gross profit was the primary factor enhancing margin.
- Gross margin was higher than both the immediately preceding quarter and the same quarter one year earlier. Revenue was stable sequentially and up slightly year-over-year, while gross profit improved in both comparisons.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
53.2%
Gross profit
$2.2B
Revenue
$4.1B
Cost of revenue
$1.9B
Quarter-over-quarter change
+0.5 pts
Year-over-year change
+0.7 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Dec 31, 2024 | $3.9B | $2.0B | $1.9B | 52.1% |
| Mar 31, 2025 | $3.8B | $2.0B | $1.8B | 52.6% |
| Jun 30, 2025 | $4.1B | $2.1B | $1.9B | 52.8% |
| Sep 30, 2025 | $4.1B | $2.2B | $1.9B | 53.2% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2025
+0.5 pts
Year-over-year change
Sep 30, 2024
+0.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin improvement was driven by higher gross profit on flat revenue, with cost of revenue unchanged. This indicates that the increase in gross profit was the primary factor enhancing margin.
Gross margin was higher than both the immediately preceding quarter and the same quarter one year earlier. Revenue was stable sequentially and up slightly year-over-year, while gross profit improved in both comparisons.
Monitor the trajectory of cost of revenue given its stability, as any change could affect margin leverage.