Ingersoll Rand (IR) Deutsche Bank’s Chicago Industrials Summit summary

Order and revenue trends

• July organic orders accelerated to low double digits to mid-teens, driven by long-cycle project conversions and continued short to medium cycle momentum across regions and end markets.

• Long-cycle project funnel remains healthy, with backlog building into 2027; decision-making delays have eased, leading to increased PO conversions.

• Q2 saw 4% organic revenue growth in ITS, with both price and volume contributing; back half guidance implies 3%-4% organic growth.

• Recurring revenue surpassed $450 million in 2025, with a target to approach $1 billion by 2027, expanding globally and across product lines.

• Pricing actions are normalizing to 1%-2% annually, with tariff-related surcharges rolling off and region-specific strategies in place.

Regional and segment performance

• North America led Q2 organic orders with high single-digit growth, while Europe remained stable and India delivered double-digit growth.

• China experienced mid-teens volume growth in Q2 despite low single-digit pricing headwinds, attributed to targeted application wins and a lower baseline.

• Competitive pricing in China is expected to normalize over the medium term, with local competition mainly at the lower end of the market.

• PST segment saw 7% organic order growth, with life sciences driving outsized performance and margin expansion toward mid-30s% by 2027.

• Market share versus main competitor remains stable, with growth opportunities identified in under-penetrated regions like Latin America, Middle East, India, and Southeast Asia.

Margin and productivity outlook

• ITS margins have faced headwinds from tariffs and negative volumes but are expected to improve in the back half and into 2027 as volumes recover and productivity initiatives take effect.

• Full-year ITS EBITDA margin is expected to approach 28%, down 100 bps year-over-year, but seen as a better base for future expansion.

• PST margins are strong, with Q2 at 31.5% and a trajectory toward mid-30s% by 2027, supported by volume momentum and productivity.

• Recurring revenue growth is margin accretive and expected to become a larger share of the aftermarket mix.

• Restructuring and reinvestment efforts are largely digested, supporting improved cost profiles going forward.