Executive Summary

Q4 2024 delivered resilient growth and cash generation: revenue $1.90B (+4% YoY), adjusted EBITDA $532M (+6% YoY) at 28.0% margin (+50 bps YoY), adjusted EPS $0.84; free cash flow was $491M (26% FCF margin), with book-to-bill at 0.95 consistent with second-half seasonality .
Segment mix was constructive: IT&S margin expanded to 30.3% (+30 bps YoY) while P&ST margin dipped to 27.6% (−250 bps YoY) on lower A&D volumes at ILC Dover and China softness; management expects PST margins to trend back toward ~30% through 2025 as integration and restructuring benefits ramp .
2025 guide: revenue +3–5% (organic +1–3%; FX ~−2%; M&A ~$300M), adjusted EBITDA $2.13–$2.19B (+6–9%), adjusted EPS $3.38–$3.50 (+3–6%); corporate costs ~$165M, tax ~23%, net interest ~$220M, capex ~2% of revenue; phasing is back-half weighted with a typical Q1 sequential step-down .
Capital deployment remains a catalyst: $4.1B liquidity, seven LOIs outstanding, and a target to add 400–500 bps of annualized inorganic revenue in 2025 that is incremental to the current guide; regular quarterly dividend of $0.02 declared (payable Mar 27, 2025) .

What Went Well and What Went Wrong

What Went Well

Margin and FCF durability: “near-record adjusted EBITDA margin of 28%...driven predominantly through gross margin expansion” and Q4 FCF of $491M (26% margin) underscore strong execution and mix/price discipline .
IT&S profitability leadership: IT&S delivered 30.3% segment margin (+30 bps YoY) with continued improvements on top of near-record levels; full-year IT&S hit a record 30.2% margin .
Inorganic growth pipeline and balance sheet: $4.1B of liquidity and “over 200 active targets,” with 7 LOIs and plans to add 400–500 bps of annualized inorganic revenue in 2025; “poised for another strong year of M&A activity in 2025” .

What Went Wrong

PST margin pressure: P&ST margin fell 250 bps YoY to 27.6% as A&D volumes at ILC Dover lagged and organic volume declined—primarily in China; management guided a rebuild toward ~30% during 2025 as synergies and integration progress .
China-driven order timing: Q4 orders were “a touch light” vs expectations due to timing of a few large China projects; the pipeline remains active, but conversion was pushed to the right .
Mixed quarterly earnings optics: Adjusted net income for Q4 declined YoY ($343.6M vs $354.6M) and adjusted diluted EPS was $0.84 vs $0.86 in Q4 2023 despite higher revenue, reflecting mix and PST headwinds .

Financial Results

Headline Metrics by Quarter

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($M)	$1,805.3	$1,861.0	$1,898.6
GAAP Diluted EPS ($)	0.45	0.54	0.57
Adjusted Diluted EPS ($)	0.83	0.84	0.84
Adjusted EBITDA ($M)	$494.6	$532.7	$532.3
Adjusted EBITDA Margin (%)	27.4%	28.6%	28.0%
Free Cash Flow ($M)	$283.1	$374.3	$490.9
Book-to-Bill (x)	1.00 (quarter)	0.97	0.95

Q4 Year-over-Year Detail

Metric	Q4 2023	Q4 2024	YoY Commentary
Revenue ($M)	$1,821.4	$1,898.6	+4% YoY
Adjusted EBITDA ($M)	$500.5	$532.3	+6% YoY; margin +50 bps to 28.0%
Adjusted Diluted EPS ($)	0.86	0.84	Softness tied to PST mix/China/A&D
Orders ($M)	$1,670.4	$1,800.0	+8% YoY
Free Cash Flow ($M)	$551.8	$490.9	FCF margin 25.9%

Segment Breakdown

Segment	Q3 2024 Revenue ($M)	Q3 2024 Segment Adj. EBITDA ($M)	Q3 2024 Margin (%)	Q4 2024 Revenue ($M)	Q4 2024 Segment Adj. EBITDA ($M)	Q4 2024 Margin (%)
Industrial Technologies & Services (IT&S)	$1,467.2	$449.9	30.7%	$1,511.0	$457.6	30.3%
Precision & Science Technologies (P&ST)	$393.8	$118.1	30.0%	$387.6	$106.8	27.6%

KPIs and Balance Sheet

KPI	Q2 2024	Q3 2024	Q4 2024
Orders ($M)	$1,799.4	$1,798.7	$1,800.0
Liquidity ($B)	$3.7	$4.0	$4.1
Net Debt / Adj. EBITDA (x)	2.0	1.7	1.6

Note: We were unable to retrieve Wall Street consensus data from S&P Global for estimate comparisons due to an API request limit; as a result, “vs. estimates” is not shown in the tables above.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue Growth	FY 2025	N/A (first issuance)	+3% to +5%	New
Organic Growth	FY 2025	N/A	+1% to +3%	New
FX Impact	FY 2025	N/A	~−2%	New
M&A Contribution	FY 2025	N/A	~$300M (~4%)	New
Corporate Costs	FY 2025	N/A	~$(165)M	New
Adjusted EBITDA	FY 2025	N/A	$2,130–$2,190M (+6%–+9%)	New
Adjusted EPS	FY 2025	N/A	$3.38–$3.50 (+3%–+6%)	New
Adjusted Tax Rate	FY 2025	N/A	~23%	New
Net Interest Expense	FY 2025	N/A	~$220M	New
Capex	FY 2025	N/A	~2% of revenue	New
Dividend	Next payment	—	$0.02 per share payable 3/27/25	Maintained

Phasing: Sequential step-down into Q1 (similar to prior year), with H2 stronger; adjusted EPS tracks EBITDA phasing (46%/54% 1H/2H split) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
Demand cadence and phasing	Q2 raised FY24 guide; backlog ~1.0x; China headwinds cited; Q3: project push-outs tied to site readiness/EPC capacity; book-to-bill 0.97	Q4 book-to-bill 0.95; organic growth flat 1H25 and ~4% in 2H25; stability in China with order timing pushes	Stable demand; conversion lag normalizing 2H
PST margin trajectory	Q2 PST margin 30.3%; Q3 PST 30.0% with sequential order improvement	Q4 PST 27.6% on ILC A&D volume and China; expected to rebuild toward ~30% through 2025	Near-term pressure; improving through 2025
Pricing/volume mix	Q2/Q3: price-cost positive, strong gross margin expansion	2025 organic split ~75% price / 25% volume; midyear price actions support H2	Pricing remains key driver
China/regional trends	Q2: China headwinds; Q3: backlog growth; ex-China strength; underpenetrated regions growing	Q4: China stable; large orders delayed but active; Americas upper low-single-digit growth; ME/India/APAC ex-China mid-single-digit	Stabilizing China; ex-China growth
Tariffs/macro	Q3: elections noted but not primary delay driver	Q4: limited COGS exposure; mitigation via sourcing and pricing; no explicit tariff assumption in guide	Managed risk
Digital/recurring revenue	Q3: connected assets unlock $25M+ opportunities; recurring revenue aiding margins	Q4: recurring revenue mix premium cited in margin context	Expanding recurring mix
M&A strategy	Q2: ILC Dover; raised FY24 guide; Q3: 10 LOIs; strong funnel	Q4: 7 LOIs; expect 400–500 bps inorganic revenue in 2025 (incremental to guide); SSI Aeration closed	Continued bolt-on cadence

Management Commentary

CEO: “delivered double-digit earnings growth and strong free cash flow margin in 2024… poised for another strong year of M&A activity in 2025” .
CFO: “near-record adjusted EBITDA margin of 28%, a 50 basis point year-over-year improvement… Free cash flow for the quarter was $491 million” .
PST outlook: “we would expect to see returning back to that 30% EBITDA margin profile as we progress through 2025” (integration, pricing, productivity, restructuring) .
2025 guide framing: “Total company revenue is expected to grow between 3% and 5%… adjusted EPS… $3.38–$3.50… adjusted tax ~23%, net interest ~$220 million, and CapEx ~2% of revenue” .
China/orders: “timing on a couple of large orders… they’re not gone… dialogue remains very, very active” .

Q&A Highlights

Demand and guide phasing: Organic ~flat 1H25, ~4% 2H25 (half pricing/half volume); sequential Q1 revenue step-down normal; margins see toughest YoY comp in Q1 .
PST margin path: Q4 pressure from ILC A&D and China; expect a rebuild toward ~30% over 2025 as integration synergies and restructuring benefits flow .
China dynamics: Projects pushed (specs/engineering timing), not cancelled; stability with book-to-bill ~1; ex-China orders up low single-digits .
Pricing cadence: Back-half pricing uplift tied to midyear actions; pricing ~75% of 2025 organic growth .
Tariffs: Low single-digit COGS exposure to China; mitigations include supplier shifts and pricing; no incremental tariffs assumed in guide .
M&A: Targeting 400–500 bps annualized inorganic revenue in 2025, incremental to current guidance .

Estimates Context

We attempted to retrieve S&P Global consensus for revenue/EPS/EBITDA but were unable to due to a daily request limit, so beat/miss vs. estimates is not presented. If prior Street models assumed a stronger 1H or faster PST margin recovery, the company’s 2025 phasing (flat 1H, stronger 2H; PST rebuilding over the year) and FX headwind (~−2%) may require timing/mix adjustments to consensus trajectories .

Key Takeaways for Investors

Margin/FCF resilience remains a defining characteristic: Q4 adj. EBITDA margin 28.0% and FCF margin 26% despite softer PST mix and China timing .
PST margin headwinds look transitory; integration and restructuring at ILC Dover should support a return toward ~30% through 2025, with easier comps in H2 .
2025 outlook is steady but back-half weighted; expect normal Q1 step-down and pricing-led organic growth (75% price/25% volume) .
China is stabilizing and order pushes are timing-related; ex-China regions (Americas, ME/India/APAC ex-China) continue to grow .
Inorganic growth is a sustained catalyst: $4.1B liquidity, 7 LOIs, and 400–500 bps targeted annualized inorganic revenue in 2025 not embedded in guidance .
Recurring revenue/digital initiatives continue to support margin mix, particularly in IT&S .
Near-term trading lens: watch Q1 seasonal step-down and PST margin cadence; medium-term, order conversion, bolt-on M&A closings, and recurring revenue expansion are key narrative drivers .

Citations:

Press release/8-K (Q4 2024):
Earnings call (Q4 2024):
Prior quarters for trend: Q3 2024 8-K/call: ; Q2 2024 8-K:
Dividend PR:
M&A PR (SSI Aeration):

Ingersoll Rand Inc. (IR)·Q4 2024 Earnings Summary