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    IEX
    Earnings call· Mar 2026(Q1 FY26)

    IDEX CORP /DE/ Q1 FY26 earnings call IEX

    Apr 29, 2026 Source

    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

    11
    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

    3
    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

    Operational metrics

    27
    Adjusted EBITDA margin
    26%expanded 50 bps YoY
    Q1 FY26

    Reflects productivity improvements, positive volume leverage and positive price cost, partially offset by mix.

    Adjusted gross margin
    44.9%declined 40 bps YoY
    Q1 FY26

    Reflecting productivity gains and volume leverage being more than offset by mix.

    Liquidity
    $1.1 billion
    Q1 FY26

    Total liquidity including undrawn facilities.

    Gross leverage position
    2x
    Q1 FY26

    As of the end of the first quarter.

    Dividends paid
    $53 million
    Q1 FY26

    Part of capital deployment strategy.

    Share repurchases
    $76 million
    Q1 FY26

    Executed in the quarter, committed to maintaining this pace through 2026.

    HST EBITDA flow-through
    33%
    Q1 FY26

    In the low to mid-30s, expected to improve slightly to mid-30s for the year. Target 40% by next year through 8020 actions and life sciences growth.

    Price/cost impact to EBITDA
    net positive
    Q1 FY26

    Not to the same magnitude as previous quarters, but still positive. Expected to continue net even to slightly positive.

    Organic sales growth
    5%
    Q1 FY26

    Consolidated organic sales growth.

    Organic orders growth
    10%YoY
    Q1 FY26

    Consolidated organic order growth.

    HST Organic orders growth
    17%YoY
    Q1 FY26

    Led by strong performance in advantaged markets.

    FMT Organic orders growth
    9%
    Q1 FY26

    Supported by intelligent water platform and mining exposures.

    FSDP Organic orders growth
    -4%
    Q1 FY26

    Due to tough comps and project volumes in North America and Asia for dispensing.

    Booked overall (typical)
    50%
    any given quarter

    Typical level of bookings entering a quarter.

    Dispensing business stability
    expected to see stability
    sequential basis

    Following a decline in Q1.

    Fire & Safety franchise growth
    high single digit
    Q1 FY26

    Driven by strong demand for fire and rescue tools in North America and stable demand in Europe.

    HST EBITDA margin expansion drivers
    —
    Q1 FY26

    Contributed to 100 bps YoY margin expansion.

    HST EBITDA margin headwinds
    —
    Q1 FY26

    Partially offset margin expansion.

    FMT EBITDA margin headwinds
    —
    Q1 FY26

    More than offset productivity benefits, leading to a slight margin decline.

    FSDP EBITDA margin drivers
    —
    Q1 FY26

    Contributed to 30 bps YoY margin increase.

    FSDP EBITDA margin headwinds
    —
    Q1 FY26

    Partially offset margin improvements.

    Tariff net impact
    not anticipate much of a net impact
    FY26

    New tariffs largely consistent with repealed IEEPA tariffs.

    Life sciences growth
    low single digits
    Q1 FY26

    Pharma is strong, but pressures from China market and NIH funding.

    Short-cycle industrial order cadence
    weak in January, better in February, strong March, held in April
    Q1 FY26 and April

    Reflects improving but still mixed conditions, with geopolitical overhang.

    Water platform growth (intelligent water)
    high single-digit growth
    Q1 FY26

    Supported by municipal-facing side and high-purity water for semicon applications.

    High-purity water (for semicon) growth
    positive and growing
    Q1 FY26

    Previously a headwind, now contributing to water platform growth.

    CapEx increase
    —
    FY26

    Budgeted for more growth CapEx, primarily for equipment.

    Industry KPIs

    4
    MetricValueDetails
    Tariff cost impactnot anticipate much of a net impact
    Data center prime power demandstrong order activity
    Incremental margin operating leverage33%%
    Order backlog order intake by segment10% organically%

    Orderbook & backlog

    5
    Consolidated Organic Orders10% organicallyQ1 FY26

    YoY

    HST Organic Orders17% organicallyQ1 FY26

    YoY

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

    FMT Organic Orders9% organicallyQ1 FY26

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

    FSDP Organic Orders-4% organicallyQ1 FY26

    Rapid fulfillment limits visibility to midway into any given quarter.

    Overall Booked Positionapproximately 50%entering any given quarter

    Risks & headwinds

    5
    Geopolitical situation and macro uncertaintyNear-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 fundingOngoing

    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 marginQ1 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 marginsQ1 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 investmentQ1 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

    5

    HST incremental margin flow-through

    FY26
    Current~33%
    TargetImprovement 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%.

    Q&A highlights

    7

    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 read6 chapters

    Detailed Narrative

    01

    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.

    02

    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⏳.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.