Ingersoll Rand's 2025 Q2 Earnings Call: Key Contradictions in Order Growth, Tariffs, and Strategic Performance

Order and revenue growth expectations, tariff impact and pricing strategy, ILC Dover's performance and strategy, ITS segment performance and order dynamics, and order cadence and demand stability are the key contradictions discussed in Ingersoll Rand's latest 2025Q2 earnings call.



Revenue and Guidance Increase:
- Ingersoll Rand raised its full-year revenue, adjusted EBITDA, and adjusted EPS guidance, driven by strong initial orders and acquisition activity.
- The increased guidance is based on a book-to-bill ratio of 1.06x in the first half of 2025 and a total backlog increase of 16% since the end of 2024.

M&A Activity and Capital Allocation:
- The company closed on 11 acquisition transactions this year, adding over $200 million in annualized revenue, representing a 9.5x pre-synergy EBITDA multiple.
- Ingersoll Rand is focused on strategic capital allocation, leveraging its strong balance sheet for M&A and share repurchases, with $500 million in share repurchases conducted in the second quarter.

Segment Performance and Orders:
- Orders in the Industrial Technologies & Services (IT&S) segment grew 7% year-over-year and 5% sequentially, with a book-to-bill ratio of 1.05x.
- Growth was driven by positive order growth in compressors and vacuum and blowers, with strong demand in Americas, EMEA, and Asia Pacific regions, particularly in China.

EBITDA Margin Challenges and Recovery:
- Adjusted EBITDA margin for IT&S declined due to organic volume declines, dilutive impacts from acquisitions, and tariff pricing matching.
- The company expects margin recovery through seasonality, productivity improvements, M&A integration, and sequential margin increases.