In This Article:
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Total Order Growth: 10% with a book-to-bill of 1.1 times.
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Organic Orders: Increased by 3.3% year-over-year.
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Free Cash Flow: Record Q1 free cash flow of $223 million.
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Adjusted EBITDA: $460 million with a margin of 26.8%.
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Adjusted EPS: $0.72 for the quarter.
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Total Liquidity: $4.2 billion.
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Net Leverage: 1.6 times.
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Revenue: Increased by 3% year-over-year.
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Aftermarket Revenue: 38% of total revenue, up 110 basis points year-over-year.
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ITS Segment Orders: Up 6% year-over-year with a book-to-bill of 1.1 times.
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PST Segment Orders: Up 28% year-over-year.
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Adjusted EBITDA Margin for PST: 29.1%.
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CapEx: $34 million for the quarter.
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Share Repurchase Authorization: Additional $1 billion, totaling $2 billion.
Release Date: May 02, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Ingersoll Rand Inc (NYSE:IR) reported a strong start to Q1 2025 with a 10% total order growth and a book-to-bill ratio of 1.1 times.
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The company achieved a record Q1 free cash flow of $223 million, demonstrating strong cash flow generation.
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Ingersoll Rand Inc (NYSE:IR) has a robust M&A strategy with nine deals under LOI and more than 200 companies in the acquisition funnel, focusing on smaller bolt-on acquisitions.
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The company authorized an additional $1 billion in share repurchases, bringing the total authorization to $2 billion, providing flexibility for opportunistic buybacks.
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Ingersoll Rand Inc (NYSE:IR) maintains a strong balance sheet with total liquidity of $4.2 billion and a net leverage of 1.6 times, enabling value creation in volatile environments.
Negative Points
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Approximately $15 million in revenue expected in Q1 was deferred to Q2 due to customer requests, impacting the quarterly financials.
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Adjusted EBITDA margin declined year-over-year, influenced by organic volume flow-through and the dilutive impact from recent acquisitions.
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The company is facing a potential $150 million tariff impact, which it plans to offset with pricing actions, but this could affect margins.
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Organic revenue growth was down 3% in Q1, with the company taking a precautionary approach by maintaining total revenue guidance despite positive order trends.
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The company anticipates organic volume to be down low single digits in the second half of 2025, reflecting a cautious outlook on market conditions.
Q & A Highlights
Q: Can you explain the rationale behind maintaining the revenue guidance despite positive order trends and other tailwinds? A: Vicente Reynal, CEO, explained that the decision to maintain the revenue guidance was precautionary. Despite positive factors like tariff pricing, FX, and M&A, the company chose to offset these with a conservative view on organic volume, effectively derisking the year while keeping the total revenue guide consistent.