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IDEX CORP /DE/ (IEX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 delivered record sales of $863M (+9% reported, +3% organic) and adjusted EPS of $2.04 (+11% YoY), supported by price/cost and execution, with discrete tax benefits; GAAP EPS was $1.62 (+13% YoY) .
  • Segment performance was solid: HST up 19% reported (Mott acquisition), FSDP up 8% organically with record sales, FMT flat (+3% organic) on price capture; adjusted EBITDA margin expanded 60 bps to 26.4% .
  • 2025 outlook guides organic growth of 1–3% and adjusted EPS $8.10–$8.45, with Q1 2025 organic sales down 3–4% and adjusted EPS $1.60–$1.65 as projects shift and share-based comp timing weighs early; adjusted EBITDA margin target 27.5–28% for FY25 .
  • Stock catalysts: integration of Mott tracking ahead of expectations, blankets and project awards in HST (pneumatics/data centers, pharma, satellite comms), platform optimization/delayering savings ($0.43 EPS) and price/cost tailwinds; semicon capital equipment recovery calibrated for 2H25 .

What Went Well and What Went Wrong

What Went Well

  • “Record sales of $863 million” with adjusted EPS +11% YoY; adjusted gross margin up 40 bps on price/cost and productivity .
  • HST delivered impactful projects (pharma, satellite communications, energy transition) and Mott’s first-quarter performance at IDEX was strong; “accretion timing is tracking ahead of our original expectations” .
  • FSDP set “another quarter of record sales” driven by automation in integrated fire systems; segment delivered +8% organic sales and strong price/cost .

What Went Wrong

  • Reported gross margin fell 20 bps to 42.5% given unfavorable mix, higher employee-related costs, and fair value inventory step-up charges from acquisitions/divestitures; adjusted margin improved but reported compressed .
  • Free cash flow declined 12% to $157M on timing of customer deposits, project deliveries, and inventory payments; conversion fell vs prior year quarter (129% to 101%) .
  • HST organic sales were flat as ongoing life sciences, automotive, and semicon capital equipment softness offset price capture and targeted growth initiatives .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$807.2 $798.2 $862.9
GAAP Diluted EPS ($)$1.86 $1.57 $1.62
Adjusted Diluted EPS ($)$2.06 $1.90 $2.04
Gross Margin (%)45.4% 44.3% 42.5%
Adjusted Gross Margin (%)45.4% 44.6% 43.1%
Adjusted EBITDA Margin (%)27.8% 26.9% 26.4%
Orders ($USD Millions)$773.3 $780.5 $816.8
Free Cash Flow ($USD Millions)$117.7 $191.6 $157.1

Segment net sales and margins:

SegmentQ2 2024 Net Sales ($M)Q3 2024 Net Sales ($M)Q4 2024 Net Sales ($M)Q2 2024 Adj. EBITDA MarginQ3 2024 Adj. EBITDA MarginQ4 2024 Adj. EBITDA Margin
Fluid & Metering Technologies (FMT)$319.4 $300.8 $299.3 33.7% 32.8% 31.6%
Health & Science Technologies (HST)$303.8 $311.0 $373.2 27.7% 26.5% 26.4%
Fire & Safety/Diversified Products (FSDP)$185.4 $188.0 $192.9 29.0% 29.1% 28.1%
Eliminations$(—) $(1.6) $(2.5) ———

Q4 vs guidance and estimates:

MetricPrior Guidance (Q4 2024)Actual (Q4 2024)Outcome
GAAP EPS ($)$1.64–$1.69 $1.62 Slight miss vs low end
Adjusted EPS ($)$2.01–$2.06 $2.04 Within range
Organic Sales Growth (%)+3% to +4% +3% Met low end
Wall Street Consensus (S&P Global)N/A*N/A*Data unavailable*

*Values retrieved from S&P Global were unavailable due to data limits; consensus could not be retrieved.

KPIs and cash conversion:

KPIQ2 2024Q3 2024Q4 2024
Op. Cash Flow ($M)$133.6 $205.3 $172.6
Op. Cash Flow as % of Net Income—172% 140%
Free Cash Flow Conversion (%)—133% 101%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP Diluted EPS ($)Q4 2024$1.64–$1.69 $1.62 (actual) Lower vs guide
Adjusted Diluted EPS ($)Q4 2024$2.01–$2.06 $2.04 (actual) In-line
Organic Sales Growth (%)Q4 2024+3% to +4% +3% (actual) Met low end
Organic Sales Growth (%)FY 2025—+1% to +3% New guide
GAAP Diluted EPS ($)FY 2025—$6.56–$6.96 New guide
Adjusted Diluted EPS ($)FY 2025—$8.10–$8.45 New guide
Organic Sales Growth (%)Q1 2025—−3% to −4% New guide
GAAP Diluted EPS ($)Q1 2025—$1.18–$1.24 New guide
Adjusted Diluted EPS ($)Q1 2025—$1.60–$1.65 New guide
Adjusted EBITDA Margin (%)FY 2025—27.5%–28.0% New guide
Capital Expenditure ($M)FY 2025—~$90 New guide
Corporate Costs ($M)FY 2025—~$110 (up ~$16M YoY) New guide
Restructuring Charges ($M)FY 2025—$21–$25 (severance) New guide
Dividend per Share ($)Q1 2025 Pay$0.69 (declared Nov-2024) $0.69 (paid Jan 31, 2025) Maintained

Earnings Call Themes & Trends

TopicQ2 2024 (Previous Mentions)Q3 2024 (Previous Mentions)Q4 2024 (Current Period)Trend
HST recovery & blanketsSemicon recovery not yet; life sciences flat; innovation pipeline; project pushouts HST organic orders +20% with blankets; cautious recovery; highest 2024 orders; backlog build HST leads growth in 2025; blanket orders in pneumatics tied to data centers; projects (~$40M) executed in Q4 Improving order momentum; 2H25 recovery bias
Semicon cycleEarly signs, no inflection; NXT ultrapure heater approval; 2025 expected strong cycle Pushout to mid-2025; aftermarket (Sealing Solutions) strong Customer-specific inventory adjustments in 1H; stronger bookings at leading edge; MRO steady; 2H pickup Transitional; set for back-half improvement
Intelligent WaterProduct launches (Verisight Ultra; Subterra acquisition) Bright spot; strong municipal funding; collection system expertise Continued municipal investment; semicon ultrapure water projects timing into 2025 Durable multi-year tailwinds
Platform optimization & delayeringComplexity reduction; margin leverage Collaboration across units without bureaucracy; digitization $0.43 EPS savings identified for 2025; $0.15–$0.25 productivity EPS lift Accelerating savings in FY25
Tariffs/macro uncertaintyProject approvals delayed; inflation/rates and election cited Stable day rates; uncertainty persists Localized supply chains; tariff scenarios manageable; pricing protection via differentiation Mitigation plans; cautious stance
M&A (Mott integration)Announced Mott acquisition; complementary to HST Early integration; capacity expansion for hydrogen components; prototype in 90 days “Accretion ahead of schedule”; pipeline active; balance sheet capacity maintained Positive integration; accretive trajectory

Management Commentary

  • CEO: “IDEX teams drove a strong finish… positioning us for dynamic growth in markets powered by global megatrends. Our 80/20 mindset allows us to… self-fund the buildout of scale” .
  • CEO: “Mott… achieved strong results… delivering a significant advanced filtration systems project… accretion timing is tracking ahead of our original expectations” .
  • CFO: “We have $0.43 of adjusted EPS support lined up for 2025… on top of another $0.20… from traditional productivity” .
  • CFO: FY25 guide: organic +1–3% yields adjusted EPS $8.10–$8.45; adjusted EBITDA margin 27.5–28%; CapEx ~$90M; corporate costs ~$110M .
  • CEO: On semicon timing: “Customer-specific inventory adjustment pressure points in the early part of the year… correct… in the back half” .

Q&A Highlights

  • Q1 softness drivers: ~$40M projects pulled into Q4 (80% HST), share-based comp timing ($0.20 EPS headwind), sequential headwind ~$0.42 from these two items .
  • Segment pacing for Q1: FMT down mid-single digits, HST down low-to-mid single digits, FSDP up low single digits to reach −3% to −4% organic .
  • Price/cost: Positive 60–80 bps spread in FY25; ~+$10M incremental pricing in 2H due to lag in price actions .
  • Platform optimization/delayering: Structural SG&A and gross margin leverage; target HST low-to-mid-30% EBITDA over time; FMT >30% and FSDP ~30% .
  • Tariffs: Highly localized model; multiple scenarios; price protection given mission-critical tech; electronics components acknowledged as a lagged exposure point .
  • Semicon recovery: MRO steady; leading-edge bookings robust; capital equipment recovery paced to 2H25 with customer-specific inventory corrections in 1H .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 could not be retrieved due to data limits; precise beat/miss vs consensus is unavailable*. Versus prior company guidance, adjusted EPS landed within the $2.01–$2.06 range; GAAP EPS came in slightly below the guided $1.64–$1.69; organic growth met the low end (+3%) .

*Values retrieved from S&P Global were unavailable due to data limits.

  • Implications: Sell-side models likely to adjust for FY25 margin trajectory (27.5–28% adj. EBITDA) and front-loaded compensation headwinds in Q1; semicon capex recovery and blanket orders suggest 2H25-backloaded revenue/EPS cadence .

Key Takeaways for Investors

  • Q4 quality: Strong price/cost and project execution lifted adjusted EPS; reported gross margin compression reflects mix and acquisition accounting; core cash conversion normalized on timing effects .
  • 2025 setup: Flow-through from platform optimization ($0.43 EPS), productivity ($0.15–$0.25), and price/cost supports margin expansion; near-term headwinds in Q1 from project timing and compensation reset .
  • HST leadership: Blankets in pneumatics for data centers, pharma and satellite comms, plus Mott accretion ahead of plan position HST to lead organic growth (near high end of 1–3%) .
  • Semicon bifurcation: MRO/Sealing Solutions steady; capital equipment recovery calibrated for 2H25 with customer-specific inventory adjustments in 1H; bookings at the leading edge are constructive .
  • FSDP resilience: Integrated fire systems automation continues to gain share (>10% of platform revenue), supporting low-mid single digit growth; watch mix impacts on margins .
  • Intelligent Water: Multi-year municipal funding tailwinds and analytics-led “collection system” positioning; Subterra complements inspection analytics; durable growth vector .
  • Capital deployment: Active proprietary M&A funnel; balance sheet capacity maintained; integration discipline demonstrated with Mott .