Ingersoll Rand (IR) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 2025 orders of $1,882M (up 10%), revenue of $1,717M (up 3%), and free cash flow of $223M (up 124%), with organic orders up 3.3% and a book-to-bill ratio of 1.10x.

• Adjusted EBITDA was $460M (26.8% margin), flat year-over-year; adjusted EPS was $0.72, down from $0.78, and net income declined 8% to $187M.

• Aftermarket revenue grew 6% and represented 38% of total revenue, up 110 basis points year-over-year.

• Board authorized a $1B increase to share repurchase program, targeting up to $750M in repurchases by end of 2025, with $993M remaining under prior authorization.

• Liquidity stood at $4.2B as of March 31, 2025, including $1.6B cash and $2.6B undrawn credit.

Financial highlights

• Q1 2025 revenue: $1,716.8M (+3% YoY); adjusted EBITDA: $459.7M (26.8% margin); adjusted net income: $293.2M (17.1% margin); free cash flow: $222.7M (13.0% margin).

• Gross profit increased 2.6% to $765.5M, with gross margin stable at 44.6%.

• Net leverage at 1.6x, up 0.9x year-over-year, flat sequentially.

• Q1 cash outflows: $163M for M&A, $10M in share repurchases, $8M in dividends.

• CapEx was $34M in Q1; expected to be ~2% of revenue for the year.

Outlook and guidance

• 2025 revenue growth expected at 3–5% total, with organic growth revised to (1)%–1%.

• Adjusted EBITDA guidance: $2,070M–$2,130M (+3% to +6% YoY); adjusted EPS: $3.28–$3.40 (flat to +3% YoY).

• Capex expected at ~2% of revenue; FCF to adjusted net income conversion ~100%.

• Guidance excludes impact from anticipated share repurchases and incremental M&A.

• Management expects continued macroeconomic uncertainty, with potential impacts from inflation, interest rates, tariffs, and geopolitical instability.