IR — Ingersoll Rand Inc.

Summary of Ingersoll Rand Q1 2026 Earnings Call

1. Key Financial Results and Metrics:

• Adjusted EPS: $0.77, up 7% year-over-year.
• Revenue: Grew 8% year-over-year, aligning with expectations.
• Adjusted EBITDA: $469 million with a margin of 25.4%.
• Orders: Increased 5% year-over-year, with a book-to-bill ratio of 1.07x.
• Free Cash Flow: $163 million, consistent with expectations.
• Corporate Costs: $38 million for the quarter.
• Tax Rate: Adjusted tax rate of 19.8%.
• Liquidity: Nearly $4 billion, with leverage below 2x.

2. Strategic Updates and Business Highlights:

• M&A Activity: Ingersoll Rand signed an agreement to acquire Fox s.r.l., enhancing its pump technology. The acquisition pipeline remains strong, with over 200 companies in the funnel and 10 transactions at the LOI stage.
• Operational Focus: Continued emphasis on disciplined pricing, capital allocation, and operational execution through the IRX framework.
• Segment Performance:
  • ITS Orders: Up 5%, but organic orders down 3% (flat when excluding delayed orders).
  • PST Orders: Up 6% year-over-year, with Life Sciences showing double-digit growth.
• Innovation: Successful integration of technologies in carbon capture and Life Sciences applications.

3. Forward Guidance and Outlook:

• Full Year 2026 Guidance:
  • Revenue growth expected between 2.5% and 4.5%.
  • Adjusted EBITDA projected between $2.13 billion and $2.19 billion.
  • Adjusted EPS forecasted in the range of $3.45 to $3.57.
  • Anticipated organic growth of approximately 1% at the midpoint.
• Market Expectations: Continued recovery in orders, particularly from delayed long-cycle projects, is anticipated throughout 2026.

4. Bad News, Challenges, or Points of Concern:

• Order Delays: Approximately $40 million in orders were delayed due to long-cycle projects affected by the conflict in the Middle East, although recovery is expected.
• Margin Pressure: Adjusted EBITDA margins have been under pressure due to organic volume declines, tariffs, and ongoing commercial investments.
• Tariff Impact: The company is closely monitoring tariff changes and their implications, with expectations of neutral impact on full-year guidance.
• Competitive Pressures: The European market remains highly competitive, particularly in the context of rising energy prices.

5. Notable Q&A Insights:

• Short-Cycle vs. Long-Cycle Demand: There are signs of stabilization and improvement in short-cycle demand, particularly in the U.S. However, long-cycle projects are experiencing delays primarily in the Middle East, with expectations for recovery.
• Pricing Strategy: The company does not anticipate taking additional tariff-related pricing actions but expects to revert to normal pricing strategies, which could positively impact margins in the second half of the year.
• Life Sciences Growth: Double-digit growth in the Life Sciences segment is expected to continue, supported by strong demand in biopharma and API production.
• China Market Performance: Ingersoll Rand is outperforming the underlying market in China, driven by localized technologies and strong execution.

Overall, Ingersoll Rand's Q1 2026 results reflect a solid start to the year, with strategic initiatives in place to drive growth, despite facing challenges from order delays and margin pressures. The company remains optimistic about recovery and growth in the coming quarters.