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    IR
    Earnings call· Mar 2026(Q1 FY26)

    Ingersoll Rand Q1 FY26 earnings call IR

    Apr 29, 2026 Source

    Executive summary

    Ingersoll Rand Q1 FY26 — Solid Start with Strong M&A Pipeline and Short-Cycle Improvement

    Ingersoll Rand delivered a solid Q1 FY26, with adjusted EPS growing 7% and orders up 5%, achieving a 1.07x book-to-bill. The company is seeing stabilization and improvement in short-cycle activity, particularly in the U.S. and China. While some long-cycle project delays occurred due to geopolitical factors, management expects recovery and maintains full-year guidance, supported by a robust M&A pipeline and continued operational execution.

    Highlights

    5

    • Adjusted EPS grew 7% year-over-year to $0.77, in line with expectations.

    • Orders finished up 5% year-over-year, resulting in a book-to-bill of 1.07x.

    • PST segment adjusted EBITDA margins improved 120 basis points year-over-year.

    • Life Science business maintained robust growth with a double-digit increase in orders.

    • Acquisition of Fox s.r.l. enhances pump technology and the M&A pipeline remains robust with 10 LOIs.

    Concerns

    3

    • Approximately $40 million in long-cycle project orders were delayed due to the Middle East conflict in Q1.

    • ITS segment adjusted EBITDA margin was down year-over-year due to organic volume declines, tariffs, and strategic investments.

    • Corporate costs are planned at $170 million for the full year, incurred evenly per quarter.

    Guidance & targets

    14
    CategoryTargetConfidence
    Annualized Inorganic Revenue
    400 to 500 basis points
    medium materiality
    High
    Total Company Revenue Growth
    2.5% and 4.5%
    high materiality
    High
    Organic Revenue Growth
    1% at the midpoint
    high materiality
    High
    M&A Revenue Growth Contribution
    approximately 2%
    medium materiality
    High
    FX Revenue Growth Contribution
    approximately 0.5%
    low materiality
    High
    Total Adjusted EBITDA
    $2.13 billion and $2.19 billion
    high materiality
    High
    Corporate Costs
    $170 million
    medium materiality
    High
    Adjusted EPS
    $3.45 and $3.57
    high materiality
    High
    Adjusted Tax Rate
    roughly 23%
    low materiality
    High
    Net Interest Expense
    about $230 million
    low materiality
    High
    Share Count
    approximately 394 million
    low materiality
    High
    Free Cash Flow to Adjusted Net Income Conversion
    approximately 95%
    medium materiality
    High
    Organic Revenue Growth Cadence
    flattish to slightly up (Q2), low single-digit growth (H2)
    medium materiality
    Medium
    Pricing Actions
    1% to 2%
    medium materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Industrial Technologies and Services (ITS)
    Orders were impacted by delayed long-cycle projects. Margin pressure was driven by organic volume declines, tariffs, and commercial investments. Stabilized compressor activity in the U.S. and strong performance in China.
    Orders: +5% YoYBook-to-bill: 1.08xOrganic orders: -3% YoYOrganic orders (ex-delayed): approximately flat YoY2-year stack organic orders: +1%Compressors orders: down YoYBlower and banking business orders: up YoYPower Tools and Lifting orders: down YoYCore tool business organic growth: mid-single digitsChina organic order growth: positive
    		7% year-over-year growth+7%—26.7%
    Precision and Science Technologies (PST)
    Strong performance in Life Science and Precision Technology's short-cycle business. Margin improvement reflects strong operational execution.
    Orders: +6% YoYBook-to-bill: 1.04xOrganic orders: +1% YoYLife Science business orders: double-digit increasePrecision Technology short-cycle book and ship business: organic order growth2-year stack organic orders: mid-single digits
    		4% organic growth+4% organic—$122 million

    Operational metrics

    16
    Adjusted EPS
    $0.77up 7% year-over-year
    Q1 FY26

    in line with expectations

    Adjusted EBITDA
    $469 millionin line with expectations
    Q1 FY26

    Year-over-year margin pressure was primarily driven by the flow-through on organic volume declines, the dilutive impact from tariffs and continued strategic investments for commercial growth.

    Corporate Costs
    $38 millionnot stated
    Q1 FY26
    Adjusted Tax Rate
    19.8%not stated
    Q1 FY26
    Total Liquidity
    nearly $4 billionnot stated
    Q1 FY26
    Leverage Ratio
    well below 2xnot stated
    Q1 FY26
    Total Revenue Growth
    8%year-over-year
    Q1 FY26

    in line with expectations

    Organic Orders Growth (ex-delayed)
    approximately flatyear-over-year
    Q1 FY26

    Excluding $40 million delay in long-cycle projects.

    ITS Adjusted EBITDA Margin (Q2 expectation)
    27.5% to 28%down 50 to 100 bps year-over-year
    Q2 FY26

    Expected to be slightly down year-over-year, with sequential improvement from Q1.

    ITS Adjusted EBITDA Margin (H2 expectation)
    approximately 30%expansion
    H2 FY26

    Expected to see margin expansion in the second half, supported by better organic volume outlook, improved price-cost, and productivity initiatives.

    Energy Savings per Month (customer example)
    $15,000not stated
    monthly

    Example of savings from a specific compressor application, leading to a 1-year payback.

    Original Equipment (OE) Short-Cycle Revenue
    75% to 80%not stated
    current

    Approximately 75% of the whole goods side of the business is shorter cycle in nature.

    Aftermarket Revenue
    40%not stated
    current

    Approximately 40% of total enterprise revenue is aftermarket.

    Recurring Revenue
    exceeded $450 millionnot stated
    FY25

    Exceeded $450 million last year, with a target of $1 billion run rate by end of 2027.

    Compressors Revenue Base
    upwards of 65%not stated
    current

    Compressors represent the largest portion of the ITS revenue base.

    EBITDA Phasing (H1 FY26)
    45.5% to 46%not stated
    H1 FY26

    First half of the year being in that kind of 45.5% to 46% range, the balance in the second half.

    Industry KPIs

    4
    MetricValueDetails
    Tariff cost impactnet neutralnot stated
    Price realization vs cost1% to 2%%
    Parts aftermarket business40%%
    Order backlog order intake by segmentup 5% YoY%

    Orderbook & backlog

    4
    Total Orders Growth+5%Q1 FY26

    year-over-year

    Resulted in a book-to-bill of 1.07x.

    ITS Orders Growth+5%Q1 FY26

    year-over-year

    Book-to-bill for the quarter was 1.08x.

    PST Orders Growth+6%Q1 FY26

    year-over-year

    Book-to-bill for the quarter was 1.04x.

    Recurring Revenue Backlog$1.1 billion

    Represents future revenue from recurring services, with a target of $1 billion run rate by end of 2027.

    Deals & partnerships

    2
    Fox s.r.l.acquisition

    Leading manufacturer of hydropneumatic accumulators and position dampners.

    ILC Doverpartnership

    ILC Dover developed a comprehensive fully integrated bold powder system, which includes hardware, containment and mixing in collaboration with our own vacuum technology for a leading pharmaceutical manufacturer. This end-to-end design, assembly and installation utilize both ILC Dover powder solutions as well as our Ingersoll Rand Elmorishli vacuum pumps for powder conveyance.

    Risks & headwinds

    3
    Delay in long-cycle project orders due to Middle East conflict.Q1 FY26, expected recovery in balance of 2026

    approximately $40 million

    Mitigation: Already recovered approximately 1/3 in April. Believe impact is transitory, no expected impact on full year revenue or adjusted EBITDA.

    Year-over-year margin pressure in ITS segment.Q1 FY26, expected to continue in Q2, then improve in H2.

    Adjusted EBITDA margin finished at 26.7%, down year-over-year.

    Mitigation: Driven by flow-through on organic volume declines, dilutive impact from tariffs, and continued strategic investments for commercial growth. Expect H2 improvement from better organic volumes, improved price-cost, full implementation of tariff-related pricing, and productivity initiatives.

    Continued complexity of global operating landscape, including tariffs and inflation.FY26

    not stated

    Mitigation: Actively monitoring and adjusting mitigation actions. Do not currently expect any net tariff and inflation impact to full year guidance.

    Q&A highlights

    8

    Seeking clarity on sequential acceleration in short-cycle demand and systemic delays or improvements in long-cycle demand outside of the Middle East.

    Vicente Reynal confirmed stabilization and improvement in short-cycle activity in the U.S. (compressors, core tools, precision technology) and China. Long-cycle funnel activity remains stable, with decision-making elongated but projects not canceled. Middle East delays are transitory, with 1/3 of $40M already recovered in April.

    “on the short cycle, looking specifically at the U.S., we're seeing signs of stabilization and improvement, which is definitely consistent with the ISM moving back to above [ 50 ]now for the past few quarters.”

    asked by Michael Halloran · answered by Vicente Reynal

    2 min read6 chapters

    Detailed Narrative

    01

    M&A Strategy and Pipeline

    Ingersoll Rand's inorganic growth strategy remains a core element, supported by a value creation flywheel generating durable free cash flow. The company announced the signing of Fox s.r.l., a manufacturer of hydropneumatic accumulators, expected to close by month-end, enhancing pump technology. The M&A pipeline is robust with over 200 companies in the funnel and 10 transactions at the LOI stage, primarily internally sourced.

    02

    Short-Cycle vs. Long-Cycle Demand Dynamics

    The company observed stabilization and improvement in short-cycle activity, particularly in the U.S. compressor market and core tool business, which grew organically mid-single digits. In contrast, long-cycle projects experienced delays, notably $40 million in orders due to the Middle East conflict, though one-third of these were recovered in April. Management views these delays as transitory📎, with projects remaining in the funnel.

    03

    Life Sciences Performance

    The Life Science business within PST demonstrated robust growth with a double-digit increase in orders, driven by investments in biopharma and API production in the U.S. This performance is contributing to the PST segment's overall strength and is seen as a key growth area, with strong collaboration opportunities with leading pharmaceutical manufacturers.

    04

    Tariff and Inflation Management

    Ingersoll Rand actively monitors and adjusts mitigation actions for tariffs and inflation, including recent Section 232 tariff changes. The company currently expects no net tariff and inflation impact to its full-year guidance, indicating successful management of these cost pressures through pricing actions and productivity initiatives.

    05

    Energy Efficiency as a Tailwind

    Rising energy prices, particularly in Europe, are viewed as a potential long-term tailwind. Ingersoll Rand leverages its products and services to offer energy-efficient solutions, helping customers reduce operational costs and achieve quick paybacks on investments, such as a reported $15,000 per month saving for one customer.

    06

    China Market Outperformance

    Despite a competitive and non-growing underlying market, Ingersoll Rand's China operations continue to outperform, delivering positive organic order growth for three consecutive quarters. This success is attributed to new technologies, localization efforts, and strong commercial execution, particularly in areas like medical devices.

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