Ingersoll Rand Inc. (IR) Earnings & Analysis

Latest quarter

Ingersoll Rand reported Q3 FY2026 revenue of $2.1 billion, above the consensus estimate of $2.0 billion. Adjusted earnings per share were $1.07, also above the consensus estimate of $0.89.

Revenue rose from $2.0 billion a year earlier. The company’s filing attributed the increase primarily to organic growth, acquisitions and favorable currency movements. Its Industrial Technologies and Services segment increased revenue as organic sales and acquisitions contributed to growth; Precision and Science Technologies also reported higher revenue, led by organic growth and acquisitions.

The filing shows gross margin increased to 44.8% from 43.7%, primarily reflecting tariff refunds and cost measures, partly offset by unfavorable product mix. Diluted EPS rose to $1.73 from $0.61; the filing attributed higher net income primarily to lower net other operating expense and higher gross profit, partly offset by higher administrative and amortization expenses.

Free cash flow increased to $623.3 million from $325.5 million. CFO Vik Kinney said the latest quarter included $162.5 million of ILC Dover transaction-related recoveries.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Vicente Reynal said demand improved across short- and long-cycle businesses in the third quarter. Organic orders rose 18%, and he said that, excluding large engineered-to-order bookings, “organic orders still grew high single digits.” In response to a question about those orders, Reynal said short- to medium-cycle growth accelerated, with equipment orders growing faster than aftermarket orders.

Reynal highlighted an approximately $195 million order for data center infrastructure, combining backup power and filtration equipment. He said initial shipments would carry margins below the company average as Ingersoll Rand invests in capacity, engineering and supplier qualification. Most revenue from the order is expected in 2027, and he said future orders in the market could be uneven.

Asked about the company’s capabilities, Reynal said it was combining power and thermal-management technologies with its experience in customized engineering. He said the company had adapted technologies used in industrial applications for data centers and was targeting selected customers.

CFO Vik Kinney said third-quarter price-cost was slightly positive in dollars but remained a margin headwind. Asked about China, he said pricing pressure was largely stabilizing at levels seen at the end of Q2. Excluding tariff refunds, he attributed the year-over-year decline in adjusted EBITDA margin primarily to inflation and China pricing.

For Q4, Kinney said he expected sequential margin improvement comparable to that from Q2 to Q3, citing volume, productivity and a slightly improving price-cost relationship. He also expected organic revenue growth in the 2% plus range for the company, with both segments broadly comparable.

On capital deployment, Reynal said acquisitions remained the priority and announced the closing of IVEC, which he said would join the life science business within Precision and Science Technologies. Kinney said the board had authorized a $2 billion increase to the share repurchase program.

Guidance

Ingersoll Rand raised its FY2026 revenue growth outlook to 5.5%–7%, including organic growth of 2%–3.5%. Reynal said the higher revenue outlook reflected increased organic growth expectations.

The company also raised its adjusted EPS forecast, excluding third-quarter tariff refunds, to $3.58–$3.70. Reynal attributed the increase primarily to a lower expected adjusted tax rate and a lower share count. CFO Vik Kinney said the company now expects a full-year adjusted tax rate of approximately 20%.