IR

Ingersoll Rand Inc. (IR) - Q1 2026 10-Q Summary

Business Context and Reporting Period

This summary covers the quarterly period ended March 31, 2026. Ingersoll Rand Inc. is a global provider of mission-critical flow creation products and industrial/life science solutions, operating through two segments: Industrial Technologies and Services and Precision and Science Technologies. The company reported 391.3 million shares of common stock outstanding as of April 24, 2026.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Revenues increased 7.6% year-over-year, driven by favorable foreign currency impacts ($72.4 million) and acquisitions ($63.9 million), partially offset by a $5.9 million decline in organic revenue.
• Margin Compression: Gross profit margin decreased 170 basis points to 42.9%, and Operating Income margin decreased 190 basis points to 15.7%. This was primarily due to unfavorable cost leverage on lower organic revenues, product mix shifts, and tariff-related pricing adjustments.
• Segment Performance:
  • Industrial Technologies and Services: Revenue up 6.8%; Adjusted EBITDA down 0.9% to $385.5 million due to lower organic gross profit.
  • Precision and Science Technologies: Revenue up 10.4%; Adjusted EBITDA up 14.8% to $121.9 million, driven by higher organic gross profit.
• Acquisitions: The company completed the acquisition of Scinomix, Inc. for $46.7 million in January 2026. Total acquisition-related cash outflows were $52.0 million for the quarter.
• Tax Rate: The effective tax rate dropped significantly to 15.7% from 23.1% in the prior year, primarily due to a windfall tax deduction.

Guidance, Outlook, and Risks

Management Commentary: Management noted continued uncertainty in global markets driven by inflation, elevated interest rates, and geopolitical instability. The company is actively monitoring U.S. trade policy shifts and potential tariffs, which could materially impact costs and competitiveness. While organic revenue declined slightly, the company continues to execute restructuring initiatives to optimize cost structures.

Liquidity: The company maintains $2,600 million in unused availability under its Revolving Credit Facility and Commercial Paper Program. It remains in compliance with all debt covenants.

Key Risks:

• Geopolitical & Trade: Potential reciprocal tariffs and instability in Ukraine and the Middle East.
• Currency: Approximately 57% of revenues are denominated in non-U.S. currencies, exposing results to exchange rate fluctuations.
• Supply Chain: Risks related to raw material costs and availability.
• Restructuring: Execution risks associated with ongoing cost-saving initiatives.

Investor Verification Checklist

• Organic Revenue Trend: Verify the sustainability of the 1.6% organic revenue decline in the Industrial Technologies segment and the 4.4% organic growth in Precision and Science Technologies.
• Tax Provision: Confirm the nature and recurrence of the "windfall tax deduction" that lowered the effective tax rate to 15.7%.
• Tariff Impact: Assess the specific financial impact of new U.S. trade policies and reciprocal tariffs on future cost of sales and pricing power.
• Acquisition Integration: Monitor the integration progress and accretion of the Scinomix acquisition and other 2025/2026 deals.
• Free Cash Flow: Analyze the $59.3 million year-over-year decline in Free Cash Flow, driven by increased working capital usage and higher tax payments.