Q2 2026 Ingersoll Rand Inc Earnings Call Transcript
Key Points
- Ingersoll Rand Inc (IR) reported strong second-quarter results with organic order growth of 2%, organic revenue growth of 4%, and adjusted EPS growth of 7%, demonstrating solid execution and demand momentum.
- The company raised its full-year revenue guidance by 200 basis points at the midpoint, driven by healthy demand and strong first-half performance, particularly in short to medium cycle businesses.
- Ingersoll Rand Inc (IR) announced two strategic acquisitions (Lone Star Blowers and Filtri) that strengthen core technologies and aftermarket capabilities, with a robust M&A pipeline including 11 additional transactions under LOI.
- The Precision Technologies & Services (PST) segment delivered excellent results with 7% organic order growth, 4% organic revenue growth, and 200 basis points of adjusted EBITDA margin expansion to 31.5%.
- Ingersoll Rand Inc (IR) reported a strong start to July with double-digit organic order growth, driven by the realization of delayed long-cycle projects and continued short-cycle strength, boosting confidence in the second half.
- The company received a one-notch credit rating upgrade from Moody's to Baa1, reflecting a strong balance sheet with leverage at 1.7x and significant liquidity of $3.8 billion.
- Free cash flow increased 28% year-over-year to $269 million, and the company secured an initial $187.5 million insurance recovery related to the ILC Dover transaction, providing additional capital allocation firepower.
- Adjusted EBITDA margin declined 160 basis points year-over-year to 25.4%, impacted by inflationary pressures in China, continued growth investments, and higher corporate costs.
- Organic orders in the EMEA region were down low double digits, primarily due to timing delays in long-cycle blower and vacuum projects in Europe and continued project delays in the Middle East.
- China remains a challenging market from a pricing perspective, where inflationary pressures are difficult to offset with price, impacting margin performance in the ITS segment.
- The company experienced a year-to-date true-up of management incentive costs in Q2, which increased corporate costs and pressured margins, though not expected to recur at the same level in the back half.
- Book-to-bill ratio was 1.0x, slightly lower than typical for Q2, reflecting delayed timing of several large project orders, which could impact near-term revenue visibility.
- Adjusted EBITDA guidance was maintained at $2.13 billion to $2.19 billion, implying a significant margin ramp in the second half that relies on price realization, productivity, and non-recurrence of one-time costs.
- The company walked away from a potential $1 billion acquisition due to valuation, indicating disciplined capital allocation but also highlighting challenges in finding attractively priced larger deals.
Hello, and welcome to the Ingersoll Rand second-quarter 2026 earnings call. (Operator Instructions) I would now like to turn the conference over to Max Vorcheimer, Director of Investor Relations. You may begin.
Thank you for joining Ingersoll Rand's second-quarter 2026 earnings call. I'm Max Vorcheimer, Director of Investor Relations. And joining me this morning are Vicente Reynal, our Chairman and CEO; and Vik Kini, our Chief Financial Officer. Our earnings release and presentation were issued yesterday afternoon and are available on the Investor Relations section of our website, where a replay of this call will also be posted.
Before we begin, please note that today's discussion will include forward-looking statements subject to the risks and uncertainties described in our SEC filings and on Slide 2 of this presentation, which you should read in conjunction with the information provided on this call. We will also reference certain non-GAAP financial measures. Reconciliations to the
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