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IEIEX

IDEX (IEX) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Apr 29, 2026

Source: earnings call transcript

Executive summary

IDEX Q1 FY26 — Strong Organic Growth and Raised Full-Year Outlook

IDEX delivered a strong Q1 FY26, exceeding expectations with 5% organic sales growth and 10% organic order growth, primarily driven by its Health & Science Technologies segment. The company raised its full-year organic growth outlook to 3-4%, reflecting confidence from a growing backlog in advantaged markets like data center and space & defense. While some short-cycle industrial businesses showed mixed improvement, the company maintains a balanced capital deployment strategy, including share repurchases and active M&A.

Highlights

5

  • Organic sales growth of 5% in Q1 FY26, exceeding expectations.

  • Adjusted EBITDA margin expanded 50 basis points year-over-year to 26% in Q1 FY26.

  • Organic orders grew 10% year-over-year in Q1 FY26, led by HST at 17%.

  • Full-year 2026 organic growth guidance raised to 3%-4% from an original 1%-2%.

  • HST segment organic orders increased 17% and revenue grew 11% organically, driven by data center, semiconductor, and space & defense markets.

Concerns

4

  • FSDP organic orders declined 4% and organic sales decreased 1% in Q1 FY26 due to tough comps and project volumes in North America and Asia for dispensing.

  • Adjusted gross margin declined 40 basis points year-over-year to 44.9% in Q1 FY26 due to mix.

  • Free cash flow declined $5 million year-over-year to $86 million in Q1 FY26 due to higher working capital investment.

  • Life sciences business in HST was flattish to slightly down in the quarter due to China market and NIH funding pressures.

Guidance & targets

CategoryTargetConfidence
Full-year 2026 Organic Growth
3% to 4%
high materiality
High
Full-year 2026 Adjusted EBITDA Margin
26.5% to 27%
high materiality
High
Full-year 2026 Adjusted EPS
$8.35 to $8.55
high materiality
High
Q2 2026 Organic Growth
3% to 4%
medium materiality
High
Q2 2026 Adjusted EBITDA Margin
26.5% to 27%
medium materiality
High
Q2 2026 Adjusted EPS
$2.07 to $2.12
medium materiality
High
HST Full-year Organic Growth
approximate high single-digit growth
high materiality
High
FMT Full-year Outlook
flattish
medium materiality
Medium
FSDP Full-year Outlook
flattish
medium materiality
Medium
Annual Free Cash Flow Conversion
at least 100%
medium materiality
High
Share Repurchase Pace
$76 million per quarter
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Health & Science Technologies (HST)
Positive volume leverage, positive price/cost, and productivity benefits more than offset unfavorable mix and acquisitions. Strong backlog build improves visibility for continued solid growth.
Organic orders increased 17%Volumes increased in advantaged markets, including semiconductor OE and consumables, data center applications and space and defensePharma was also an area of strength
11% organically11%—expanded 100 basis points year-over-year
Fluid & Metering Technologies (FMT)
Productivity benefits were more than offset by mix and volume deleverage. Water platform continued to perform well. Outlook for the year is flattish due to macro uncertainty.
Organic orders increased 9%Orders growth was supported by our intelligent water platform and our mining exposures, partially offset by global softness in chemical end markets
2% organically2%—declined slightly by 10 basis points year-over-year
Fire & Safety/Dispensing (FSDP)
Strong productivity improvements more than offset mix and volume deleverage influences. Expect stability in dispensing business on a sequential basis. Outlook for the year is flattish.
Organic orders declined 4%Fire & Safety franchise grew high single digitDecline in dispensing due to tough comps and project volumes in North America and Asia
decreased 1%-1%—increased 30 basis points year-over-year

Orderbook & backlog

Consolidated Organic Orders 10% organically Q1 FY26

YoY

HST Organic Orders 17% organically Q1 FY26

YoY

Driving a strong backlog build that offers greater confidence in ability to deliver better financial performance.

FMT Organic Orders 9% organically Q1 FY26

Order activity is consumed within the quarter; rapid fulfillment limits visibility to midway into any given quarter.

FSDP Organic Orders -4% organically Q1 FY26

Rapid fulfillment limits visibility to midway into any given quarter.

Overall Booked Position approximately 50% entering any given quarter

Risks & headwinds

Geopolitical situation and macro uncertainty Near-term

Not quantified, but cited as reason for conservative outlook in FMT/FSDP, which are guided to be flattish for FY26.

Mitigation:Conservatively modeled flattish growth for FMT and FSDP, not extrapolating Q1 improvements for the balance of the year.

Life sciences pressures from China market and NIH funding Ongoing

Life sciences business in HST was flattish to slightly down in Q1 FY26.

Mitigation:Focus on core innovation, leveraging global scale, and supporting customers with repositioning assets or targeting different markets. Expect growth to return as the fiscal year progresses.

Unfavorable mix and acquisitions impacting HST EBITDA margin Q1 FY26

HST EBITDA margin expanded 100 bps YoY, but mix and acquisitions were offsetting factors.

Mitigation:Implementing 8020 actions to improve margins in acquired businesses (Muon, Micro-LAM, Mott) by pruning low-margin pieces and growing high-value parts.

Mix and volume deleverage impacting FMT and FSDP EBITDA margins Q1 FY26

FMT EBITDA margin declined 10 bps YoY; FSDP EBITDA margin increased 30 bps YoY, but mix and volume deleverage were offsetting factors.

Mitigation:Strong productivity benefits helped to partially offset these influences.

Higher working capital investment Q1 FY26

Free cash flow declined $5 million YoY to $86 million in Q1 FY26.

Mitigation:This was due to higher growth. The company still expects at least 100% FCF conversion on an annual basis.

What to watch in Q2 FY26

HST incremental margin flow-through

FY26
Current ~33%
Target Improvement towards mid-30s

Why it matters

Indicates efficiency of growth in the key HST segment and progress on integrating acquired businesses, crucial for overall margin expansion.

For the last quarter or 2, and in this quarter, the flow-through in HST was about 33%, so in that low to mid-30% as you referenced. As you think about kind of the guide for the year, we see that improving slightly, getting to kind of those mid-30%.

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Q&A highlights

Why is H2 organic growth guided to decelerate from Q1/Q2 pace, given strong orders? Is it conservatism?

HST should continue at a similar clip due to backlog. FMT's outlook is flat due to macro uncertainty and limited visibility beyond mid-quarter, reflecting some conservatism.

“I think in FMT, in particular, is where we saw good performance in the quarter. The end of the quarter was stronger than the beginning, seeing some sequential improvement. But as the outlook for the year, still seeing or forecasting a growth outlook that's a bit flat. And that's probably a little bit of the macro world, 1 quarter into the year, some uncertainty in the macro world, and what we're seeing the visibility, keeping that around flat.”

asked by Joseph Giordano · answered by Sean Gillen

2 min read 6 chapters

Detailed narrative

Strategic Focus on Advantaged Markets

IDEX is increasingly deploying resources in its Health & Science Technologies (HST) segment towards faster-growing durable end markets such as space and defense, data center, and semiconductor. This strategy leverages 8020 principles to segment markets, clarify winning positions, and actively reallocate capital and talent to high-value opportunities, reinforcing a stronger overall outlook for the company. The company provides critical components for data, energy, and fluid management in these mission-critical systems.

8020 as a Growth and Margin Tool

For over a decade, IDEX's 8020 methodology has improved focus, margins, and execution. The company is now extending its use as a growth tool, leading to a "flywheel effect" where strengthening advantaged platforms allows for further portfolio simplification and refinement, driving higher growth and stronger margins. This involves focusing on fewer, winning customers in advantaged spaces and applying 8020 to new application arenas, compounding value over time.

HST Segment Momentum and Long-Term Visibility

The Health & Science Technologies (HST) segment demonstrated significant strength in Q1 FY26, with 17% organic order growth and 11% organic revenue growth. This performance was driven by secular trends in semiconductor OE and consumables, data center applications, and space and defense. The strong backlog build in HST provides greater visibility for continued solid growth through the balance of 2026 and into 2027, supported by novel solutions and aggressive customer ramps.

Mixed Performance and Macro Headwinds in Other Segments

While HST excelled, the Fluid & Metering Technologies (FMT) segment saw 9% organic order growth but only 2% organic sales growth, with strength in intelligent water and mining offset by softness in chemical markets. The Fire & Safety/Dispensing (FSDP) segment experienced declines in orders (-4%) and sales (-1%) due to tough comparisons in dispensing, though Fire & Safety grew high single-digits. Short-cycle industrial markets showed a cadence of improvement through Q1, but overall uncertainty from geopolitical situations leads to a conservatively modeled flattish outlook for FMT and FSDP for the full year.

Capital Deployment and Shareholder Returns

IDEX maintains a balanced capital deployment approach, prioritizing organic investments to drive growth, bolt-on M&A, and returning capital to shareholders. In Q1 FY26, the company repurchased $76 million in shares and paid $53 million in dividends. Management plans to maintain the $76 million quarterly share repurchase pace throughout the remainder of 2026, while also having sufficient capacity for M&A.

Tariff Impact and IEEPA Refunds

The company is actively monitoring tariff changes, noting that new tariffs implemented after the repeal of IEEPA tariffs are largely consistent, resulting in no anticipated net financial impact. IDEX has taken the necessary actions to apply for expected IEEPA refunds, with the process anticipated to play out over the coming months. This demonstrates the company's ability to adapt to trade policy shifts.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.