Executive Summary

Record Q1 orders ($1.882B, +10%) and free cash flow ($223M, +124%), with revenue at $1.717B (+3%) and adjusted EBITDA $460M (26.8% margin, down 70 bps YoY) .
Results were slightly below Street: EPS $0.72 vs $0.737*, revenue $1.717B vs $1.725B*, EBITDA $459.7M vs $473.0M*; management cited ~$15M revenue deferral to Q2 and ongoing growth investments . Values retrieved from S&P Global.
Full-year 2025 guidance reduced: Adjusted EBITDA to $2.070–$2.130B (from $2.130–$2.190B) and Adjusted EPS to $3.28–$3.40 (from $3.38–$3.50), with organic growth now (-1%)–1% (was 1%–3%) .
Board added $1B to buyback authorization (targeting up to $750M repurchases in 2025), reinforcing capital returns as a near-term catalyst . Management stresses in‑region for‑region footprint and tariff mitigation via pricing and a “tariff war room” .

What Went Well and What Went Wrong

What Went Well

Record orders and FCF; book-to-bill 1.10x; liquidity $4.2B (cash ~$1.6B + $2.6B revolver availability). “Record first quarter free cash flow are encouraging signs as we start off the year” — CEO Vicente Reynal .
Aftermarket revenue mix rose to 38% of total (+110 bps YoY), underpinning resilience and margin quality .
PST segment delivered strong reported growth (orders +28%, revenue +23%) and improved adjusted EBITDA sequentially (29.1% margin, +150 bps vs Q4’24) .
Capital deployment: $163M to M&A in Q1 and a fresh $1B buyback authorization; two bolt-ons (G&D Chillers, AGT) added capabilities in air treatment .

What Went Wrong

ITS organic revenue declined 4% and adjusted EBITDA margin contracted 110 bps YoY (28.8%) due to volume deleverage, dilutive recent acquisitions, and growth investments .
Company adjusted EBITDA margin fell 70 bps YoY (26.8% vs 27.5%), and adjusted EPS declined to $0.72 (from $0.78) YoY on cost and investment pressures .
Guidance trimmed as management prudently inserted organic volume contingency despite order strength; tariff pricing actions offset costs at “zero margin,” muting EBITDA flow-through .

Financial Results

Consolidated – Actuals vs Prior Year, Prior Quarter, and Consensus

Metric	Q1 2024	Q4 2024	Q1 2025 Actual	Q1 2025 Consensus
Revenue ($USD Millions)	1,670.1	1,898.6	1,716.8	1,725.4*
Adjusted EBITDA ($USD Millions)	458.5	532.3	459.7	472.97*
Adjusted EBITDA Margin (%)	27.5%	28.0%	26.8%	—
GAAP Diluted EPS ($)	0.50	0.57	0.46	—
Adjusted Diluted EPS ($)	0.78	0.84	0.72	0.737*

Values retrieved from S&P Global.

Key notes:

Approximately $15M of revenue expected in Q1 was deferred into Q2 at customer request .
Adjusted tax rate in Q1 was ~22.6% .

Segment Breakdown

Segment	Q1 2024 Revenue ($M)	Q4 2024 Revenue ($M)	Q1 2025 Revenue ($M)	Q1 2024 Adj. EBITDA ($M)	Q4 2024 Adj. EBITDA ($M)	Q1 2025 Adj. EBITDA ($M)
Industrial Technologies & Services (ITS)	1,373.4	1,511.0	1,352.1	411.1	457.6	389.1
Precision & Science Technologies (PST)	296.7	387.6	364.7	91.4	106.8	106.2
Total	1,670.1	1,898.6	1,716.8	502.5	564.4	495.3

Segment commentary: ITS book-to-bill 1.10x; organic orders +3.5%; margin down YoY on volume deleverage and acquisition mix; PST book-to-bill 1.08x; strong reported growth via M&A; sequential margin +150 bps vs Q4’24 .

KPIs and Cash

KPI	Q4 2024	Q1 2025
Orders ($USD Millions)	1,800.0	1,882.3
Book-to-Bill (x)	0.95	1.10
Free Cash Flow ($USD Millions)	490.9	222.7
Free Cash Flow Margin (%)	25.9%	13.0%
Liquidity ($USD Billions)	4.1	4.2
Aftermarket as % of Revenue	—	38% (+110 bps YoY)

Guidance Changes

Metric	Period	Previous Guidance (2/13/25)	Current Guidance (5/1/25)	Change
Total Revenue Growth	FY 2025	3–5%	3–5%	Maintained
Organic Growth (Total IR)	FY 2025	1–3%	(-1%)–1%	Lowered
ITS Organic Growth	FY 2025	1–3%	(-1%)–1%	Lowered
PST Organic Growth	FY 2025	1–3%	(-1%)–1%	Lowered
FX Impact	FY 2025	~(-2%)	~(-0.5%)	Improved tailwind
M&A Revenue	FY 2025	~$300M	~$330M	Raised
Corporate Costs	FY 2025	~($165M)	~($165M)	Maintained
Adjusted EBITDA	FY 2025	$2,130–$2,190M	$2,070–$2,130M	Lowered
Adjusted EPS	FY 2025	$3.38–$3.50	$3.28–$3.40	Lowered
Adjusted Tax Rate	FY 2025	~23%	~23%	Maintained
Net Interest Expense	FY 2025	~$220M	~$220M	Maintained
CapEx	FY 2025	~2% of revenue	~2% of revenue	Maintained
Share Repurchases	FY 2025	—	Target up to $750M; +$1B authorization	New

Management rationale: “Prudent” to hold total revenue guide while inserting volume contingency; tariff pricing (~$150M) offsets costs one-for-one at 0% flow-through, diluting margins; estimates now embed more second-half organic improvement and pricing .

Earnings Call Themes & Trends

Topic	Q3 2024 (Prev)	Q4 2024 (Prev)	Q1 2025 (Current)	Trend
Tariffs/Mitigation	Not a focus	Monitoring exposure; in-region benefits	~$150M tariff exposure; list prices + surcharges; “tariff war room” to drive supply chain moves	Rising impact; proactive mitigation
In‑region for‑region footprint	Highlighted as differentiator	Reiterated strategy	Emphasized as competitive edge amid tariffs; local manufacturing valued by customers	Reinforced
Demand generation (MQL) & long-cycle	MQLs strong; decision elongation	MQL up low double-digits; pipeline strong	MQLs up double-digits; April orders stable; longer-cycle projects progressing	Stable to positive
China & APAC	Orders strong ex-China; PST organic up 3%	China softness; stability emerging; APAC ex-China solid	Encouraging signs; APAC organic orders growth; China still down for year; local-for-local positioning	Gradual stabilization; cautious
Recurring revenue & aftermarket	Free cash flow focus	Growing recurring revenue noted	Aftermarket 38% (+110 bps); recurring revenue up double-digits in ITS	Improving mix
PST & ILC Dover	PST reported strength via M&A	PST margin under pressure; ILC A&D volume headwinds; life sciences double-digit growth	PST margin 29.1%; sequential improvement; life sciences momentum; minimal tariff exposure	Sequential improvement; back-half uplift expected
Capital allocation & M&A	Multiple bolt-ons; discipline	18 acquisitions in 2024; continued bolt-on focus	$163M Q1 M&A; 9 deals under LOI; buyback optionality increased	Active pipeline; returns focus

Management Commentary

“Our positive organic orders growth, solid book-to-bill, and record first quarter free cash flow are encouraging signs as we start off the year.” — CEO Vicente Reynal .
“We continue to focus on controlling what we can control, staying agile and leveraging IRX to offset all known tariff impacts.” — CEO .
“Approximately $15 million in revenue initially anticipated to be recognized within the first quarter has been deferred to the second quarter due in large part to customer requests.” — CFO Vik Kini .
“We are taking pricing actions that are one-for-one offsetting the tariff costs… at 0 flow-through, [which is] dilutive to the overall.” — CFO .
“As part of our balanced capital allocation strategy, our Board has authorized an additional $1 billion of share repurchases… targeting up to $750 million… by the end of 2025.” — Company release .

Q&A Highlights

Guidance bridge: Management held total revenue flat but inserted a ~4% organic volume contingency to prudently de-risk amid dynamic macro; tariff pricing (+~2%) and FX/M&A (+~2%) positives were offset by that contingency .
Tariffs: ~$150M exposure predominantly China imports and secondary effects; two-step pricing (April list price; May surcharges) offsets costs one-for-one; supply chain relocation actions underway but in-year impact limited .
Margin cadence: Company-level margins flattish for FY25 given zero-flow-through tariff offsets; PST margins expected to sequentially improve back toward ~30% through 2025; ITS margins down YoY on deleverage and acquisition mix .
Seasonality & Q2 framing: H1 ~46% of EPS/EBITDA; Q2 around $505M EBITDA and ~$0.80 EPS “ballpark,” consistent phasing vs prior years .
Demand signals: Aftermarket up 6%; equipment softness implied but not recessionary in management’s view; orders balanced across short- and long-cycle; April orders in line .

Estimates Context

Q1 2025: EPS $0.72 vs $0.737*; Revenue $1,716.8M vs $1,725.4M*; EBITDA $459.7M vs $472.97M* — modest misses driven by revenue deferral, investment spending, and tariff dynamics with zero-margin price offsets . Values retrieved from S&P Global.
Street likely to revise FY25 EPS/EBITDA lower and recalibrate organic volume assumptions following the guide cut, while incorporating tariff price-cost neutrality and higher M&A revenue (~$330M) .

Key Takeaways for Investors

Orders and FCF strength support durability, but near-term EPS/EBITDA are pressured by tariff price-cost neutrality and prudence on organic volumes — expect margin improvement skewed to H2 as PST recovers and pricing actions annualize .
The guide reset reduces execution risk; watch April/May order conversion and H2 organic trajectory, especially in PST life sciences and ITS recurring revenue mix .
Share repurchase authorization (+$1B) and targeted up to $750M buybacks in 2025 are supportive to per-share metrics and a potential stock support/catalyst in choppy macro .
M&A remains a core growth lever with disciplined multiples (~9x pre-synergy in recent deals); inorganic revenue raised to ~$330M in 2025, expect continued bolt-ons in air treatment and life sciences .
China remains cautious but stabilizing; in-region for-region footprint provides a competitive moat under tariff regimes; watch APAC ex-China for share gains .
ITS margin compression reflects volume deleverage and mix; recurring revenue and IRX productivity initiatives should aid margin trajectory as volumes stabilize .
Dividend maintained ($0.02 per share payable June 5, 2025), but buybacks dominate capital returns this year .

Appendix: Additional Items

Dividend: Regular quarterly cash dividend of $0.02 per share, payable June 5, 2025 (record date May 15, 2025) .
Q1 balance sheet: Cash $1.613B, total liquidity ~$4.2B; net leverage 1.6x LTM adjusted EBITDA .
Recent bolt-ons: G&D Chillers and Advanced Gas Technologies added to IT&S, expanding air treatment capabilities; combined purchase price ~$27M .

Please note: All consensus estimate values marked with an asterisk (*) are values retrieved from S&P Global.

Ingersoll Rand Inc. (IR)·Q1 2025 Earnings Summary