Ingersoll Rand Beats Q2 Earnings Estimates, Raises Revenue Guidance

IR's Orders and Organic Growth

In the second quarter of 2026, its total orders increased 5.3% to $2.04 billion. Organic orders increased 1.6% year over year. Acquisitions added 2.4% to order growth, while foreign currency translation contributed 1.3%. 

Management noted healthy underlying demand and strengthening order momentum. Ingersoll Rand also reported double-digit order growth through the first four weeks of July, supported by the realization of longer-cycle orders that had been delayed during the first half and continued strength in short-to-medium-cycle demand.

Segmental Performance

Industrial Technologies and Services generated revenues of $1.62 billion, up 8.7% year over year and accounting for about 79% of total revenues. Organic revenues increased 4.2%, with positive growth across all regions. Acquisitions and foreign currency added 2.8% and 1.7%, respectively. The segment recorded a book-to-bill ratio of 1.0, indicating that quarterly orders were broadly aligned with revenues.

The segment's adjusted EBITDA increased 1.7% to $434.5 million, while its margin contracted 180 basis points to 26.8%. Organic orders were approximately flat as strong compressor activity, particularly in North America, was offset by the timing of longer-cycle blower and vacuum orders in Europe and continued pressure in the Middle East.

Precision and Science Technologies recorded revenues of $426.7 million, up 7.7%. Organic revenues increased 3.9%, while acquisitions and currency contributed 2.9% and 0.9%, respectively. Organic orders rose 7.4%, led by low-double-digit growth in Life Sciences Technologies and mid-single-digit growth in Precision Technologies.

The segment's adjusted EBITDA increased 15.2% to $134.5 million. Its adjusted EBITDA margin expanded 200 basis points to 31.5%, reflecting strong operational execution supported by the Ingersoll Rand Execution Excellence system.

Ingersoll Rand's Margin Profile

The company’s total adjusted EBITDA increased 2.1% year over year to $519.9 million. However, the adjusted EBITDA margin contracted 160 basis points to 25.4%. The decline reflected challenges in offsetting inflation with pricing, primarily in China, continued commercial investments to support growth and higher corporate costs.

In the quarter, IR’s cost of sales increased 11.6% to $1.19 billion, while selling and administrative expenses rose 8% to $400.8 million. Adjusted net income increased to $339.3 million from $325.2 million, though the adjusted net income margin declined to 16.6% from 17.2%.

Ingersoll Rand's Cash Flow and Liquidity

Cash provided by operating activities totaled $295.9 million in the second quarter, up from $245.7 million in the year-ago quarter. Capital expenditures declined to $27 million from $35.3 million, lifting free cash flow to $268.9 million from $210.4 million. The free cash flow margin improved 200 basis points to 13.1%.

IR ended the quarter with $3.8 billion in available liquidity, including $1.17 billion in cash and $2.6 billion of undrawn revolving credit capacity. The company paid out dividends of $8 million and repurchased shares worth $240 million. It also deployed $110 million toward acquisitions.

Long-term debt (less of current maturities) was $4.07 billion, lower than $4.78 billion recorded at the end of 2025. Net debt to adjusted EBITDA remained at 1.7 times.

IR's 2026 Outlook

Ingersoll Rand raised its 2026 revenue growth outlook to 4.5-6.5%. The forecast assumes organic growth of 1-3%, an approximately 1% currency benefit and a roughly 2.5% contribution from acquisitions.

The company maintained its adjusted EBITDA guidance of $2.13-$2.19 billion and adjusted earnings forecast of $3.45-$3.57 per share. Management projects adjusted earnings to be near the high end of this range. Free cash flow conversion is projected at approximately 95% of adjusted net income.

Ingersoll Rand's M&A Pipeline

The company completed the acquisition of a U.S.-based blower manufacturer with approximately $50 million in annual revenues. The transaction expands Ingersoll Rand's blower technologies and aftermarket capabilities.

IR also entered into a deal to acquire Fai Filtri, an Italian industrial filtration company with about $30 million in annual revenues, with closing expected in the fourth quarter. The acquisition pipeline includes more than 200 companies, with 11 additional transactions at the letter-of-intent phase.

Zacks Rank and Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are discussed below:

Applied Industrial Technologies AIT carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Applied Industrial’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 4.0%.  In the past 60 days, the Zacks Consensus Estimate for Applied Industrial’s fiscal 2026 bottom line has inched up 0.1%.

RBC Bearings Incorporated RBC presently carries a Zacks Rank of 2. RBC Bearings’ earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 6.2%. In the past 60 days, the Zacks Consensus Estimate for RBC’s fiscal 2027 earnings has increased 0.8%.

Generac Holdings GNRC currently carries a Zacks Rank of 2. Generac Holdings’ earnings topped the consensus estimate twice and missed on the other two occasions in the trailing four quarters. The average earnings surprise was 7.4%. In the past 60 days, the Zacks Consensus Estimate for GNRC’s 2026 earnings has increased 0.4%.

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