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IDEX CORP /DE/ (IEX)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered top-line and EPS beats versus consensus: revenue $814.3M vs $806.3M estimate and adjusted EPS $1.75 vs $1.64 estimate; GAAP diluted EPS was $1.26. Bold beats reflect stronger-than-expected sales and margins across segments . EPS/Revenue estimates marked with an asterisk in tables; Values retrieved from S&P Global.
  • Record orders of $871.9M and backlog built by ~$60M, supported by HST strength and a large clean water project win at Mott; organic orders +1% YoY .
  • Full-year 2025 guidance maintained (organic growth 1–3%; GAAP EPS $6.56–$6.95; adjusted EPS $8.10–$8.45) and Q2 2025 guide set (organic 0–2%; GAAP EPS $1.60–$1.72; adjusted EPS $1.95–$2.05); management added an incremental $20M cost containment to offset potential tariff-related/demand pressures .
  • Key catalysts: tariff pass-through pricing (3–4% price to offset 5–6% COGS inflation), portfolio optimization/delayering savings, and continued momentum in municipal water, space/defense, data center power solutions via Airtech/Mott collaboration .

What Went Well and What Went Wrong

What Went Well

  • Record orders ($871.9M, +6% YoY) and backlog build (~$60M), with HST and FSDP segments setting order records; “all segments exceeding our expectations” and building backlog, notably HST via Mott’s clean water project win .
  • Gross margin expanded 70 bps YoY to 45.3% on productivity and price/cost, despite volume deleverage; adjusted gross margin up 30 bps YoY to 45.3% .
  • Strategic wins: Mott secured a multiyear ~$40M custom wastewater filtration project; Airtech/Mott collaboration targeting next-generation scalable solutions for data center power and emerging space sector optics (“teams … designing new prototypes together”) .

What Went Wrong

  • Organic sales fell 1% YoY; adjusted EBITDA margin compressed 50 bps to 25.5%; adjusted EPS down 7% YoY to $1.75; GAAP EPS down 21% YoY to $1.26, driven by higher interest expense, depreciation, and tax rate (prior-year discrete benefits) .
  • FMT organic sales declined 4% on softness in agriculture, chemical, energy, and semiconductor; HST margin dilution from Mott and volume deleverage; free cash flow fell to $91.4M (69% conversion) amid inventory builds and interest payments on 4.950% notes .
  • Semiconductor wafer fab recovery pushed out; headwinds persist in high-cost machine tools; near-term strength mostly in MRO/consumables exposure (Mott gas filters) rather than cap equipment .

Financial Results

Consolidated Performance vs Prior Year and Prior Quarter

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$800.5 $862.9 $814.3
Gross Profit ($USD Millions)$357.4 $367.1 $368.9
Gross Margin %44.6% 42.5% 45.3%
Adjusted Gross Margin %45.0% 43.1% 45.3%
Net Income ($USD Millions)$121.4 $123.2 $95.5
Net Income Margin %15.2% 14.3% 11.7%
Adjusted EBITDA ($USD Millions)$208.3 $227.5 $208.0
Adjusted EBITDA Margin %26.0% 26.4% 25.5%
Diluted EPS (GAAP) ($)$1.60 $1.62 $1.26
Adjusted Diluted EPS ($)$1.88 $2.04 $1.75
Operating Cash Flow ($USD Millions)$156.6 $172.6 $105.7
Free Cash Flow ($USD Millions)$136.6 $157.1 $91.4
FCF Conversion %95% 101% 69%

Actual vs S&P Global Consensus (Q1 2025)

MetricActualConsensusBeat/Miss
Revenue ($USD Millions)$814.3 $806.3*Bold beat (+1.0%)
Primary EPS (Adjusted) ($)$1.75 $1.64*Bold beat (+6.6%)

Values retrieved from S&P Global.

Orders and Backlog KPIs

KPIQ1 2024Q1 2025
Orders ($USD Millions)$820.3 $871.9 (Record)
Organic Orders Change YoY—+1%
Backlog Change—+~$60M

Segment Breakdown (Net Sales and Profitability)

SegmentNet Sales Q1 2024 ($M)Net Sales Q1 2025 ($M)YoY %Adj. EBITDA Q1 2024 ($M)Adj. EBITDA Q1 2025 ($M)Margin Q1 2024Margin Q1 2025
Fluid & Metering Technologies (FMT)$313.7 $290.5 -7% $105.4 $95.3 33.6% 32.8%
Health & Science Technologies (HST)$310.1 $341.5 +10% $81.4 $87.4 26.2% 25.6%
Fire & Safety/Diversified Products (FSDP)$178.0 $184.3 +4% $51.4 $54.2 28.9% 29.4%

Additional Items

ItemQ1 2025
Share Repurchase256,159 shares for $50.0M
Revolver Balance (Mar 31)$249.0M outstanding; $30.2M repaid in Jan; $12.5M repaid in Apr
Dividend Declared (May 2025)$0.71 per share (payable May 30, 2025)

Guidance Changes

MetricPeriodPrevious Guidance (Feb 4, 2025)Current Guidance (May 1, 2025)Change
Organic Sales GrowthFY 20251%–3% 1%–3% Maintained
GAAP Diluted EPSFY 2025$6.56–$6.96 $6.56–$6.95 Maintained
Adjusted Diluted EPSFY 2025$8.10–$8.45 $8.10–$8.45 Maintained
Organic Sales GrowthQ2 2025n/a0%–2% New
GAAP Diluted EPSQ2 2025n/a$1.60–$1.72 New
Adjusted Diluted EPSQ2 2025n/a$1.95–$2.05 New
Adjusted EBITDA MarginFY 202527.5%–28.0% (implied) 27.5%–28.0% Maintained
Tariff Impact AssumptionsFY 2025Not specified~$100M annualized; ~2/3 in 2025; 5–6% COGS inflation offset by 3–4% price New disclosure
Cost Containment ActionsFY 2025Platform optimization/delayering contributing to $43M impact +$20M incremental savings identified Raised
DividendQ2 2025n/a$0.71 per share declared New

Earnings Call Themes & Trends

TopicQ3 2024 (Previous Mentions)Q4 2024 (Previous Mentions)Q1 2025 (Current Period)Trend
Tariffs/MacroNot prominent; financing (4.950% notes), Mott integration 2025 uncertainty noted; 1–3% organic growth outlook Detailed tariff framework ($100M annualized; pricing offset; added $20M cost actions) Increasing focus; proactive mitigation
Semiconductor CycleHST organic down; MRO exposure growing via Mott HST flat organically; ongoing softness Recovery push-out in cap equipment; MRO/consumables tailwind via Mott gas filters Mixed: near-term headwinds, MRO tailwind
Municipal WaterStrength in water business (FMT) Continued strength and defensiveness “Most defensible” vertical; local/regulatory drivers; stormwater management commentary Strengthening
Space & Defense/OpticsEmerging platform; Iridian optics and collaborations Favorable trends Momentum in optics and hypersonic systems; cross-business engineering collaboration Building
Data Center/AI Power SolutionsNot explicitNot explicitAirtech powering data centers; integrating Mott for scalability and sustainability Emerging growth
Portfolio Optimization/DelayeringN/AAnnounced; productivity and savings $43M 2025 impact on track; organizational delayering, footprint consolidation, sourcing synergies Executing and expanding
M&A PipelineMott integration strong start Active pipeline; capital deployment flexibility Proprietary pipeline steady; bolt-ons likely; uncertainty slows quick deals Steady amid uncertainty

Management Commentary

  • “Our IDEX teams delivered better-than-expected revenue and profitability in the first quarter of 2025, with all segments exceeding our expectations… all of our segments built backlog, mostly accumulating within HST, fueled by an impressive large clean water project win from the Mott team.” – Eric Ashleman, CEO .
  • “We expect tariffs to drive $100 million of annualized impact… tariffs will add 5% to 6% inflation to our cost of goods sold which can be offset by price increases of 3% to 4%.” – Abhi Khandelwal, CFO .
  • “We have proactively identified another $20 million in savings targets for this year… cumulative $80 million support for 2025 when combined with savings from platform optimization, organizational delayering and baseline productivity.” – Eric Ashleman .
  • “Mott recently entered into a $40 million multiyear agreement to deploy a custom wastewater filtration solution… roughly $0.25 [of the order] booked in Q1 and expected to be delivered to sales in the second half.” – Eric Ashleman .

Q&A Highlights

  • Guidance mechanics: Q2 organic 0–2% supported by backlog; H2 framework assumes HST ramp ($10M sequential in Q3/Q4), FMT/FSDP steady; tariff impact of $60–$65M in 2025 offset one-for-one with price; incremental $20M cost out to absorb potential 3–4% H2 volume pressure .
  • Tariffs timing: Modest Q2 impact ($10–$12M), majority in Q3/Q4; aggressive price capture and limited customer buy-ahead ($6–$8M) .
  • Strategic growth platforms: Cross-brand collaboration to accelerate innovation; hybrid branding approach preserving sub-brand equity (e.g., IDEX Health & Science, Fire & Safety) .
  • Semiconductor update: Capex recovery delayed; MRO/consumables exposure (Mott gas filters) offsets some pressure; outlook relies more on backlog in pharma, space/defense .
  • Day-rate “canaries”: BAND-IT and gas-related businesses steady through April with no discernible tariff-driven slowdown; distributor feedback consistent .

Estimates Context

  • Q1 2025 results exceeded S&P Global consensus: revenue beat by ~1.0%, adjusted/primary EPS beat by ~6.6% . See Actual vs Consensus table above.
  • With Q2 guidance implying sequential margin lift (adj. EBITDA margin 26.5–27.0%), sell-side may need to reflect higher price capture and savings cadence vs prior near-term models; full-year ranges maintained .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Bold beat on adjusted EPS and revenue; record orders/backlog build supports near-term visibility even as macro/tariff uncertainty rises .
  • Pricing actions (3–4%) and $20M incremental savings provide cushion against ~$60–$65M 2025 tariff headwinds, aiming to preserve FY EPS/margins within guided ranges .
  • FMT softness (ag/chem/energy/semis) offset by municipal water strength; watch for H2 stabilization and price/mix benefits .
  • HST shows momentum via Mott and space/defense optics; second-half deliveries from Mott’s wastewater project are a tangible driver .
  • Cash generation remains robust but FCF conversion dipped on inventory builds and interest; expect sequential margin/FCF improvement with higher volumes and platform savings in Q2+ .
  • Capital deployment optionality intact: ongoing buybacks ($50M in Q1), regular dividend ($0.71), and proprietary M&A pipeline (bolt-ons likely) .
  • Trading lens: narrative skewed positive on execution (beats, orders, pricing) with upside optionality from platform synergies and secular end-markets (data centers, defense, intelligent water); risks center on tariff elasticity and short-cycle demand softening .