IDEX CORP /DE/ (IEX)·Q4 2025 Earnings Summary
IDEX Beats on EPS and Revenue as HST Segment Delivers Record Orders
February 4, 2026 · by Fintool AI Agent
IDEX Corporation delivered a double beat in Q4 2025, posting adjusted EPS of $2.10 versus consensus of $1.93 (+8.8%) and revenue of $899 million versus $862 million expected (+4.4%). The highlight: record orders of $979 million, up 20% year-over-year, driven by surging AI-related demand in the Health & Science Technologies (HST) segment.
The call also marked the debut of new CFO Sean Gillen, who joined in January from AAR Corp where he served as CFO for over seven years. CEO Eric Ashleman praised Gillen's "expertise and track record of successfully implementing operational efficiencies, optimizing portfolios, and executing on strategic M&A."
The stock rose 2.3% during the session to $201.61 before pulling back to $199.25 in after-hours trading.
Did IDEX Beat Earnings?
Yes — and convincingly. IDEX extended its EPS beat streak to 8 consecutive quarters:
EPS and Revenue consensus from S&P Global Capital IQ
Key margin metrics also impressed:
- Gross margin: 43.1% (+60bps YoY)
- Adjusted EBITDA margin: 26.8% (+40bps YoY)
- Free cash flow conversion: 121% (vs 101% in Q4 2024)
The beat was broad-based, driven by positive price/cost dynamics, productivity improvements from the 8020 operating model, and volume strength in advantaged markets (data center, semiconductor, space & defense).
Ask Fintool AI AgentWhat Changed From Last Quarter?
The biggest story is accelerating momentum in HST, IDEX's highest-margin segment:
Source: IDEX Q4 2025 Earnings Presentation
HST led the quarter with record orders fueled by:
- AI-driven data center power solutions
- Semiconductor consumables
- Space & defense applications
- 8020-driven commercial initiatives
FMT and FSDP remain challenged:
- General industrial markets "not yet accelerating"
- Dispensing and non-US Fire & Safety funding headwinds persist
- Municipal water remains a bright spot in FMT
CEO Eric Ashleman noted: "Order growth in our HST segment built momentum in the fourth quarter from increasing demand for AI-related projects, including data center power solutions and semiconductor applications."
Critically, January 2026 orders remain strong: "Actually, January has been strong as well... A lot of it is just momentum that we've frankly seen building over the last year and a half."
What Did Management Guide?
IDEX provided FY2026 guidance that lands in line with consensus for revenue but slightly ahead on EPS:
FY2026 Consensus from S&P Global Capital IQ
The guidance implies:
- EPS growth of 3-5% vs FY2025's $7.95
- Continued margin expansion despite mixed end-market demand
- ~100% free cash flow conversion
- Price contribution of 0-2% (down from 3% in FY2025)
The outlook balances mid-single-digit growth for HST against flat to slightly down expectations for FMT and FSDP, reflecting continued industrial sluggishness. Management's message was cautious optimism — HST momentum is real, but general industrial recovery remains elusive.
Ask Fintool AI AgentHow Did the Stock React?
IEX closed at $201.61, up 2.3% from the open of $197.10, before retreating to $199.25 in after-hours trading:
The muted after-hours reaction suggests investors may be digesting the cautious 2026 outlook despite the Q4 beat. The stock is trading near its 52-week high of $208.16.
Capital Allocation & Balance Sheet
New CFO Sean Gillen outlined a four-pillar capital deployment framework: (1) maintain investment-grade credit rating, (2) organic investments in highest-return opportunities, (3) near-term focus on bolt-on M&A with ongoing portfolio optimization, and (4) consistent shareholder returns via dividends and buybacks.
IDEX maintained its balanced, returns-focused capital deployment:
The company repurchased $75M in Q4 alone, utilizing 0.4M shares. With Mott Corporation now integrated and near-term M&A focus shifting to bolt-ons, management signaled continued share repurchase activity.
Key Risks & Watchpoints
- Industrial weakness persists: FMT and FSDP segments remain soft with no visible inflection
- Higher tax rate: Legislation in 2025 reduced benefits from foreign-sourced income
- Tariff uncertainty: Trade policy developments cited as a forward risk
- HST concentration: Beat was heavily dependent on one segment's AI tailwinds
Forward Catalysts
- Q1 2026 earnings (late April): Will HST order momentum translate to revenue?
- Data center power demand: Secular tailwind expected to continue
- Semiconductor cycle: IDEX has exposure through HST consumables
- M&A: Bolt-on acquisitions in 80s focus areas
Q&A Highlights
On industrial recovery (Dean Dray, RBC): Despite the PMI finally crossing above 50 after 11 months, CEO Ashleman noted IDEX tracks 6-7 bellwether short-cycle businesses and "so far, even through January, we've seen them be steady, but we have not seen them inflect up yet." Weather-impacted January may be a factor.
On HST order-to-revenue timing (Mike Halloran, Baird): Management explained two factors drive the Q1-to-Q2 step-up: (1) traditional FMT weather seasonality affecting water and ag, and (2) a newer HST dynamic where larger orders with fiscal year-end budget cycles and longer lead times naturally flow into Q2.
On pricing (Vlad Bystricky, Citigroup): Price contributed ~3% to FY2025 top line (3.5% in Q4). For FY2026, IDEX expects 0-2% price contribution — meaning flat to slightly positive volumes across the portfolio.
On backlog visibility (Joe Giordano, TD Cowen): HST backlog grew over $100M year-over-year. "Almost half of it is in the data center area... but it's actually broadly applied elsewhere across HST" including materials processing, MSS, and Micro-LAM. Ashleman emphasized "assurance levels are quite a bit higher this year."
On AI-related orders (Bryan Blair, Oppenheimer): About half of HST's backlog build is in "direct data center applications," with the rest tangentially related — semiconductor memory production, optical switching, and critical lithography components.
On share repurchase (Nathan Jones, Stifel): Expect ~$75M per quarter, similar to H2 2025. This could flex based on M&A activity.
On cost savings: The $60M in FY2025 savings breaks down as $40M structural (ongoing) and $20M temporary. Some of the temporary savings may be allowed back as reinvestment in growth areas.
On geographic trends (Matt Summerville, D.A. Davidson): India is the strongest growth region, followed by North America, then Europe. European chemicals remain pressured.
On municipal water (Bryan Blair, Oppenheimer): Double-digit growth in Q4, with mid-single-digit+ expected going forward. IDEX provides critical inspection and analytics for infrastructure refurbishment.
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