Ingersoll Rand’s fourth quarter was met with a positive market reaction, as the company’s revenue and non-GAAP earnings per share both exceeded Wall Street expectations. Management attributed this performance to continued expansion in recurring revenue streams, disciplined execution of its M&A strategy, and resilient order growth across key business segments. CEO Vicente Reynal highlighted that recurring revenue surpassed $450 million in 2025, supported by a robust $1.1 billion backlog, while recent acquisitions added scale and technological capability. Reynal emphasized, “Our teams remain nimble through the use of IRX and continue to leverage our economic growth engine to outperform in the markets in which we serve.”
Is now the time to buy IR? Find out in our full research report (it’s free for active Edge members).
Ingersoll Rand (IR) Q4 CY2025 Highlights:
- Revenue: $2.09 billion vs analyst estimates of $2.04 billion (10.1% year-on-year growth, 2.6% beat)
- Adjusted EPS: $0.96 vs analyst estimates of $0.90 (6.6% beat)
- Adjusted EBITDA: $580.1 million vs analyst estimates of $560.3 million (27.7% margin, 3.5% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $3.51 at the midpoint, missing analyst estimates by 1.3%
- EBITDA guidance for the upcoming financial year 2026 is $2.16 billion at the midpoint, below analyst estimates of $2.19 billion
- Operating Margin: 18.7%, down from 20% in the same quarter last year
- Market Capitalization: $38.07 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Ingersoll Rand’s Q4 Earnings Call
- Michael Patrick Halloran (Baird) asked about end market assumptions in guidance and short-cycle trends. CEO Vicente Reynal responded that guidance assumes current market conditions persist, with stable recurring revenue and improving life sciences demand.
- Julian C.H. Mitchell (Barclays) questioned the expected seasonality of organic growth and margin dynamics. CFO Vikram U. Kini clarified that Q1 would be flat to slightly down, with growth normalizing in later quarters, and margin expansion anticipated in the second half as tariff impacts abate.
- Joseph John O'Dea (Wells Fargo) requested details on the acquisition pipeline and recurring revenue growth. Reynal described the pipeline as robust with primarily bolt-on deals, and recurring revenue progress driven by new contracts and technology expansion.
- Nigel Edward Coe (Wolfe Research) sought insight on segment margin expectations and investment spending. Kini explained that ITS margins would be flat due to tariffs and growth investments, while PST margins would benefit from easier comps and operational execution.
- Nicole Sheree DeBlase (Deutsche Bank) asked about organic growth expectations by segment. Kini stated both PST and ITS are expected to deliver similar, modest growth trajectories, with PST performing slightly better due to life sciences momentum.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be watching (1) the trajectory of recurring revenue and backlog conversion into reported sales, (2) the integration and performance of recent acquisitions, especially Synomics, and (3) sustained order momentum in life sciences and aftermarket segments. Margin stabilization as tariff impacts diminish and the realization of productivity initiatives will also be critical signposts for execution.
Ingersoll Rand currently trades at $97.17, up from $94.21 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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