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IDEX CORP /DE/ (IEX)·Q3 2025 Earnings Summary

Executive Summary

  • IDEX delivered a clean beat and solid execution: revenue $878.7M (+10% y/y; +5% organic) and adjusted EPS $2.03, both above S&P consensus ($861.5M revenue, $1.93 EPS), with adjusted EBITDA $239.8M and 27.3% margin modestly expanding y/y . Consensus: revenue $861.5M*, EPS $1.93*, EBITDA $227.2M* (12 estimates) [Values retrieved from S&P Global].
    *
  • Orders hit a record $880.3M (+13% y/y; +7% organic), supported by strength in HST and intelligent water, while FSDP remained soft; backlog was “relatively flat” as many orders shipped intra-quarter .
  • FY25 EPS guidance narrowed within the prior range: GAAP $6.35–$6.40, Adjusted $7.86–$7.91; organic growth ~1% unchanged; FY net sales guided to ~$3.45–$3.46B; company remains on track for ≥100% FCF conversion .
  • Capital deployment is tilting to shareholder returns and bolt-ons: $75M buyback in Q3 ($175M YTD) and authorization raised to $1B; liquidity ~$1.1B; gross leverage ~2.1x .

What Went Well and What Went Wrong

What Went Well

  • HST platform momentum: HST sales +22% reported (+10% organic) with margin +120 bps y/y to 27.7%, driven by Mott integration, data centers, pharma, space/defense, and semiconductors (consumables) . CEO: “Our teams are effectively collaborating across businesses to support our fastest growing customers…positioning IDEX to deliver against targets” .
  • Pricing and productivity offset mix: Adjusted EBITDA margin expanded 40 bps to 27.3% on favorable price/cost and platform optimization savings; price realization in Q3 was ~3.5% amid tariff pass-throughs .
  • Record orders and strong cash generation: Orders $880.3M; operating cash flow $203.5M and FCF $188.7M (123% conversion), supporting buybacks and bolt-on M&A .

What Went Wrong

  • FSDP softness: Sales -3% reported (-5% organic), with adjusted EBITDA margin down 200 bps to 27.1% on volume deleverage; funding disruptions and sluggish replenishment spend pressured fire and dispensing .
  • Mix and higher below-the-line costs weighed on GAAP EPS: GAAP EPS $1.70 (+8% y/y) was held back by higher interest from Mott financing and a higher tax rate; gross margin was roughly flat given mix and acquisitions .
  • Macro visibility remains limited: Rapid-fulfillment “day rates” are stable but not inflecting; elongated decision cycles on large orders persist; management sees an “uncertainty overhang” into 2026 .

Financial Results

Headline metrics vs prior periods and consensus

MetricQ3 2024Q2 2025Q3 2025 ActualQ3 2025 Consensus
Revenue ($USD Millions)798.2 865.4 878.7 861.5*
GAAP Diluted EPS ($)1.57 1.74 1.70 —
Adjusted Diluted EPS ($)1.90 2.07 2.03 1.93*
Gross Margin (%)44.3% 45.3% 44.5% —
Adjusted EBITDA ($USD Millions)214.3 237.2 239.8 227.2*
Adjusted EBITDA Margin (%)26.9% 27.4% 27.3% —
Orders ($USD Millions)780.5 829.8 880.3 —

Asterisk denotes S&P Global consensus values. Values retrieved from S&P Global.

Segment breakdown (Sales and Adjusted EBITDA)

SegmentQ3 2024 Net Sales ($M)Q3 2025 Net Sales ($M)Q3 2024 Adj. EBITDA ($M)Q3 2025 Adj. EBITDA ($M)Q3 2024 Adj. EBITDA MarginQ3 2025 Adj. EBITDA Margin
Health & Science Technologies (HST)311.0 381.0 82.6 105.4 26.5% 27.7%
Fluid & Metering Technologies (FMT)300.8 317.1 98.5 106.8 32.8% 33.7%
Fire & Safety/Diversified Products (FSDP)188.0 181.9 54.7 49.3 29.1% 27.1%

KPIs and other operating metrics (Q3 2025)

KPIQ3 2025
Organic Sales Growth (%)+5%
Organic Orders Growth (%)+7%
Price Realization (%)~3.5%
Cash from Operations ($M)203.5
Free Cash Flow ($M)188.7
Free Cash Flow Conversion (%)123%
Corporate Costs in Adj. EBITDA ($M)21.7
Share Repurchases ($M)75.0
Liquidity (Cash + Revolver)~$1.1B
Gross Leverage~2.1x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP Diluted EPSFY 2025$6.30 – $6.44 $6.35 – $6.40 Narrowed (low end raised, high end lowered)
Adjusted Diluted EPSFY 2025$7.85 – $7.95 $7.86 – $7.91 Narrowed within range
Organic Sales GrowthFY 2025~1% ~1% Maintained
Net Sales ($B)FY 2025$3.425 – $3.455 $3.445 – $3.461 Slightly raised midpoint
Adjusted EBITDA MarginFY 202526.5% – 27.0% 26.5% – 27.0% Maintained
FCF ConversionFY 2025—≥100% Newly reiterated target
Platform Optimization SavingsFY 2025$43M platform + $20M cost containment identified $60M+ on pace Consolidated/affirmed
Share Repurchase AuthorizationOngoing—Increased to $1B Expanded capacity
Dividends Payout PolicyOngoing—Target 30–35% of adjusted NI Policy reiterated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2025)Current Period (Q3 2025)Trend
Macro/rapid-fulfillment day ratesQ2: Slight downshift in rapid-turn orders; delaying larger orders; reset 2H assumptions . Q1: No reduction in order rates through April; added cost containment .Day rates stable but at slightly lower level vs Q1; elongated decision cycles on large orders; limited visibility .Stable; no clear inflection.
Tariffs and pricingQ2: Implementing tariff pricing; guidance reset; price/cost favorable . Q1: Added $20M cost containment to mitigate tariff volume pressure .Price capture ~3.5% in Q3; tariff-driven fatigue noted; will offset if needed .Higher pricing vs early 2024; monitor policy.
Data centers/technologyQ2 PR: Emphasis on growth platforms; less on data centers .Strong orders/sales from Airtech (power gen for data centers); optics/MSS wins incl. optical switching .Strengthening driver within HST.
Water (municipal)Q1/Q2: Favorable municipal water dynamics within FMT .Intelligent water platform: high single-digit revenue growth; strong WEFTEC presence .Positive and broadening.
SemiconductorsQ1: HST and FMT saw lower semi volumes . Q2: Semi headwinds persisted in parts of FMT .Semi consumables up; lithography still below prior-year .Mixed: consumables up, litho soft.
FSDP (Fire/Dispensing)Q2: FSDP +2% organic and margins up on price/cost .FSDP organic -5%; slower replenishment; ex-US funding constraints .Deteriorated near term.
Cost actions/platform optimizationQ1: $43M platform + $20M containment planned .$17M savings in Q3; running ~$20M in Q4; $60M+ FY savings on pace .Executing to plan.
Capital allocationQ1: Building M&A funnel .Focus on bolt-ons; stepped-up buybacks ($175M YTD); $1B authorization; dividends 30–35% of adj NI .More returns near term.

Management Commentary

  • Strategy and operating model: “We are making our own luck through 80/20, tuning our resources and technologies towards those opportunities with higher growth velocities and work together as a team to integrate our growth platforms” — Eric Ashleman, CEO .
  • Phase three evolution and platforms: “We now have five thematic growth platforms that cover half of our revenue…leveraged to 21st century secular trends” — Ashleman .
  • Data centers and MSS: “Airtech…support power gen applications for data centers…top driver of orders and sales in HST” and MSS collaboration pushed Muon’s profitability above HST segment average in Q3 — Ashleman .
  • Pricing and policy: “In Q3 we were about 3.5% [price];…as levels get higher, there’s pricing fatigue…open question is, does policy become more aggressive?” — Ashleman .
  • Financial posture: “We ended the quarter with strong liquidity of $1.1B…gross leverage ~2.1x…intend leverage to migrate lower…In September we increased our share repurchase authorization to $1B” — Akhil Mahendra, Interim CFO .

Q&A Highlights

  • Macro tone/visibility: Rapid-fulfillment indicators (“day rates”) are stable but lack positive inflection; large orders not canceled but decision timelines are elongated .
  • Regional funding for FSDP: U.S. fire and rescue healthy; funding constraints in Europe and China weighed on demand late in the year .
  • Growth algorithm: Portfolio mix shift and platform integration aim to move organic growth entitlement toward mid-single digits over time, away from prior industrial-production correlation .
  • Incrementals and cost actions: HST incrementals modeled ~35–40% depending on demand; consolidated 2026 incrementals ~30%+; Q3 delivered $17M savings with ~$20M run rate in Q4; $60M+ FY savings on pace .
  • Capital deployment: Near-term emphasis on bolt-ons and returning capital; 30–35% dividend payout of adjusted NI; repurchases stepped up with $1B authorization .

Estimates Context

Results vs S&P Global consensus (Q3 2025):

MetricActualConsensusDelta
Revenue ($USD Millions)878.7 861.5*+17.2
Adjusted Diluted EPS ($)2.03 1.93*+0.10
Adjusted EBITDA ($USD Millions)239.8 227.2*+12.6

Asterisk denotes S&P Global consensus values. Values retrieved from S&P Global.

Forward look (consensus):

  • Q4 2025 consensus: revenue ~$882.2M*, EPS ~$2.04* (12 estimates) [Values retrieved from S&P Global]. This aligns with management’s “level load” 2H cadence and unchanged FY margin framework .
    Asterisk denotes S&P Global consensus values. Values retrieved from S&P Global.

Implications: Expect modest upward bias to HST-related estimates (data centers/MSS execution), offset by cautious FSDP trajectories and macro uncertainty into 2026 .

Key Takeaways for Investors

  • Quality beat with record orders and healthy cash conversion; pricing and productivity continue to offset mix and macro noise .
  • HST is compounding from platform integration (Mott, MSS, optics, data centers) with margin expansion; this is the central engine for estimate support into 2026 .
  • FSDP remains the main drag near term (funding/replenishment) — expect cautious estimates here despite stable long-term positioning .
  • FY25 guidance narrowed but intact; FY net sales nudged higher; watch for 4Q delivery of cost savings run-rate and HST ramp .
  • Capital returns are a tangible catalyst (buybacks + dividend), with leverage trending lower and ample liquidity to fund bolt-ons .
  • Pricing (3.5% in Q3) is a lever, but policy path and customer fatigue are real — monitor tariff developments closely for 2026 modeling .
  • Narrative that moves the stock: sustained HST outperformance and integrated platform wins (data centers/water/MSS), disciplined returns, and any sign of industrial “day rate” inflection on the short-cycle businesses .
Note: Asterisk denotes S&P Global consensus values. Values retrieved from S&P Global.