Ingersoll Rand (NYSE:IR) executives said the company exited 2025 with improving organic momentum, continued progress in recurring revenue, and an active acquisition pipeline as management introduced full-year 2026 guidance that assumes stability rather than a broad-based market recovery.
2025 finish: modest organic orders growth and a return to organic revenue growth
Chairman and CEO Vicente Reynal said the company ended the year with “low single-digit organic order growth” in both the fourth quarter and the full year, and noted that the company returned to organic revenue growth as 2025 progressed. Chief Financial Officer Vik Kini reported fourth-quarter orders rose 8% year over year (up 1% organically), with both the Industrial Technologies & Services (ITS) and Precision & Science Technologies (PST) segments delivering low single-digit organic order growth.
For the full year, orders increased 9% year over year (up 1% organically). Revenue increased 6%, while organic revenue was down 1%, which management attributed largely to “tough first half comps,” with improving trajectory later in the year. Kini said results exceeded the upper end of prior guidance for both adjusted EBITDA and adjusted EPS, with full-year adjusted EBITDA of about $2.1 billion (27.4% margin) and adjusted EPS of $3.34 (up 2% year over year) on an adjusted tax rate of 22.8%.
Recurring revenue and M&A: $450 million in 2025 and an active pipeline
Reynal highlighted progress in the company’s recurring revenue initiative, which he said exceeded $450 million in 2025. He also cited “a backlog of recurring revenue of approximately $1.1 billion in future revenue from existing contracts.” In the Q&A, management added that recurring revenue generally carries a higher margin profile than the rest of the portfolio, while noting the company is also reinvesting in areas such as service technicians to support continued growth.
On acquisitions, Reynal said Ingersoll Rand invested $525 million across 16 transactions in 2025, generating about $275 million in annualized inorganic revenue. He said those deals averaged “a 9x pre-synergy multiple.” Entering 2026, the company reported nine additional transactions under letters of intent and announced its first completed acquisition of the year: Scinomix, described as a manufacturer of workflow optimization technologies for multiple life sciences markets.
Asked about valuations and capital deployment, Reynal said the company continues to see purchase multiples in line with its recent experience, citing 2025’s roughly 9.2x pre-synergy average and noting that many transactions are sourced through a cultivation process with family-owned businesses.
Segment performance: ITS tariff pressure; PST margin expansion
In ITS, fourth-quarter orders were up 9% year over year with book-to-bill of 0.93, and the segment finished the full year with book-to-bill above 1. The company reported low single-digit organic orders growth for ITS in the quarter and said the segment delivered positive organic order growth in all four quarters of 2025. By region in the fourth quarter, organic orders were up low single digits in the Americas, down mid-single digits in EMEA, and up low double digits in Asia Pacific, driven by China up low single digits and the rest of Asia up “mid-twenties.” Reynal said the company has delivered three consecutive quarters of organic order growth in China, which he attributed to self-help initiatives and localized technology and product launches rather than an overall market improvement.
ITS revenue increased 11% year over year in the quarter, including 3% organic growth. Adjusted EBITDA margin was 28.9%, down year over year, with management attributing the decline largely to tariffs and continued commercial investment.
In PST, fourth-quarter orders increased 6% year over year and book-to-bill was 0.96. Organic orders rose 1%, including mid-teens organic order growth in life sciences. Full-year PST organic orders increased 2% with a book-to-bill of 1.0, and management said order momentum accelerated in the second half of the year, which finished up mid-single digits. Fourth-quarter revenue increased 8% (4% organic). PST adjusted EBITDA rose 19% to $127 million, and margin expanded 280 basis points year over year to 30.4%. Full-year PST adjusted EBITDA margin was 30%, up 40 basis points year over year.
In Q&A, management said an aerospace and defense business within PST was down in the quarter due to order timing, while life sciences performed strongly and precision technology trends were described as broadly in line with ITS.
2026 guidance: stable end markets, tariff-related first-half headwinds
For 2026, Ingersoll Rand guided to revenue growth of 2.5% to 4.5%, driven by organic growth of 1% at the midpoint, 1.5% from M&A (including carryover from 2025 deals and Scinomix), and a 1% foreign exchange tailwind. The company expects adjusted EBITDA of $2.13 billion to $2.19 billion and adjusted EPS of $3.45 to $3.57, described as about 5% growth at the midpoint.
Additional guidance items included:
- Corporate costs: $170 million, expected evenly per quarter
- Adjusted tax rate: approximately 23%
- Net interest expense: about $230 million
- Share count: approximately 394 million (management said this reflects annualization of 2025 repurchases)
- Free cash flow conversion: around 95% of adjusted net income
Reynal told analysts the guidance “is not embedding any market recovery,” and Kini added that first-quarter organic revenue is expected to be roughly flat to slightly down before improving to low single-digit organic growth in the remaining quarters. Management also said it expects the margin profile to be pressured in the first half as the company laps tariff impacts, with pricing actions and productivity efforts expected to contribute more meaningfully in the second half. Kini said price-cost is expected to be positive for the full year, with the first half expected to be price-cost neutral.
On end markets, Reynal said life sciences is “progressing and improving sequentially,” citing strong funnel and booking activity in pharma and biopharma production and a favorable pipeline in lab and analytical diagnostics tied to automation needs. He also said general industrial conditions were more stable in the second half of 2025 as tariff-related uncertainty eased, while long-cycle project funnels remained healthy even as customer decision-making remained elongated, with projects delayed but not canceled.
About Ingersoll Rand (NYSE:IR)
Ingersoll Rand is a diversified industrial company that designs, manufactures and services a wide range of equipment and technologies for commercial, industrial and OEM customers. Its product portfolio includes air compressors and compressed air systems, pneumatic and cordless power tools, material handling and lifting equipment, fluid transfer and pumping solutions, and associated aftermarket parts and service offerings. The company’s products support applications across manufacturing, construction, transportation, oil and gas, mining and general industrial markets.
Ingersoll Rand sells through a combination of direct sales, distributor networks and service channels, delivering both capital equipment and recurring aftermarket revenue from parts, maintenance and service contracts.
