Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 30, 2026 · Beat 4 of last 7 quarters
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Ingersoll Rand's results reflect broad-based industrial demand, with strength in power generation, air separation for semiconductors, and data-center-adjacent applications. The company's compressors, blowers, and pumps are integral to cooling and power infrastructure, positioning it to benefit from AI-driven data center buildout. Management's commentary on long-cycle order recovery and 2027 backlog build suggests sustained demand for mission-critical flow equipment.
Ingersoll Rand delivered solid Q2 results with organic orders up 2% and organic revenue up 4%, beating consensus on both revenue and EPS. Adjusted EBITDA margin declined 160 bps YoY to 25.4%, pressured by China pricing, growth investments, and a one-time incentive comp true-up. The company closed the Lone Star Blowers acquisition and signed Fai Filtri, adding ~$80M in annual revenue combined. Free cash flow was $269M, up 28% YoY, and the company received a Moody's upgrade to Baa1. Management highlighted strong July order momentum, with long-cycle orders recovering and building backlog for 2027.
Management raised full-year 2026 revenue guidance to 4.5%–6.5% growth (from 2.5%–4.5%), driven primarily by organic volume strength. Adjusted EBITDA guidance was maintained at $2.13B–$2.19B, with adjusted EPS maintained at $3.45–$3.57 and expected to land near the high end. Free cash flow conversion remains ~95%. Management expects a sequential margin ramp in the back half, driven by pricing actions, productivity benefits, and the non-recurrence of the Q2 incentive comp true-up. They also noted strong July order momentum, with long-cycle orders recovering and building backlog for 2027.
“We have had a great start to July, where we have seen double-digit order growth through the first 4 weeks of the month.”
on Order momentum
“China organic revenue was up low double digits in the quarter. The volume story there is very good. But as we indicated in the prepared remarks, this continues to be the most challenged market from a pricing perspective.”
on China pricing pressure
“We have 11 additional transactions under LOI and our funnel remains strong, focused on proprietary and internally sourced deals.”
on M&A pipeline
Can we talk a little bit about the momentum you're seeing on the short and medium side of things now? Maybe just drill in a little bit more on regional dynamics and then any end markets in particular that you're seeing that momentum.
Vicente provided regional color: Americas orders up high single digits, EMEA down low double digits due to timing of long-cycle projects and Middle East delays, Asia Pacific up with China revenue up low double digits. End markets broad-based, including power gen, food & beverage, and biopharma.
Is there any sort of common thread in what is now being released and previously held up and released perhaps more energy or some other vertical market? Any real common thread you'd point to there?
Vicente noted energy efficiency is a key driver, as higher power prices shorten payback on replacing older compressors. Also mentioned freeing up of engineering/EPC capacity.
When you say double digits, so if we strip out acquisitions, et cetera, we're still seeing double-digit organic orders. And then are we seeing the backlog building for '27 given that these are longer cycle projects?
Vicente confirmed July organic orders were low double-digit to mid-teens. Vik added that long-cycle projects are largely building backlog for 2027, with some revenue recognition in the back half of 2026.