Ingersoll Rand’s second quarter results were met with a sharply negative market reaction, reflecting investor concern over the company’s margin pressures and muted organic revenue trends. Management attributed the quarter’s performance to a combination of lower organic volumes, ongoing impacts from tariffs, and the dilutive effect of recent acquisitions. CEO Vicente Reynal highlighted, “the year-over-year decline in adjusted EBITDA margin was driven primarily by the flow-through on organic volume declines, the dilutive impact from recently acquired businesses, [and] the dilutive impact of tariff pricing.” The team also pointed to continued investment in growth initiatives and resilience in certain product segments, though overall demand growth remained modest.
Is now the time to buy IR? Find out in our full research report (it’s free).
Ingersoll Rand (IR) Q2 CY2025 Highlights:
- Revenue: $1.89 billion vs analyst estimates of $1.84 billion (4.6% year-on-year growth, 2.4% beat)
- Adjusted EPS: $0.80 vs analyst estimates of $0.80 (in line)
- Adjusted EBITDA: $509.4 million vs analyst estimates of $505.2 million (27% margin, 0.8% beat)
- Management raised its full-year Adjusted EPS guidance to $3.40 at the midpoint, a 1.8% increase
- EBITDA guidance for the full year is $2.13 billion at the midpoint, above analyst estimates of $2.1 billion
- Operating Margin: 4%, down from 15.1% in the same quarter last year
- Organic Revenue fell 3.4% year on year vs analyst estimates of 4.1% declines (67.6 basis point beat)
- Market Capitalization: $31.17 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Ingersoll Rand’s Q2 Earnings Call
- Michael Patrick Halloran (Baird): Asked about the sustainability of order growth and the phasing of demand into the second half. CEO Vicente Reynal responded that order momentum remained stable and that the backlog positions the company well for the rest of the year.
- Jeffrey Todd Sprague (Vertical Research): Pressed for details on managing risk in larger, more complex M&A. Reynal emphasized the importance of disciplined diligence and insurance-backed warranties, while maintaining that the long-term outlook for recent acquisitions remains positive.
- Robert Cameron Wertheimer (Melius Research): Questioned what might unlock delayed project conversions, particularly whether tariff resolution or other factors are most influential. Reynal pointed to tariffs as the main source of unpredictability, with project delays stemming from technical and specification changes rather than outright cancellations.
- Andrew Alec Kaplowitz (Citigroup): Sought clarity on growth in the legacy medical business and confidence in the P&ST segment’s trajectory. Reynal noted good momentum in fluid handling and a positive inflection in life sciences, while expecting mid-single-digit growth to resume as large project comps normalize.
- Christopher M. Snyder (Morgan Stanley): Asked about volume elasticity in relation to pricing and whether lower prices have improved volume. CFO Vik Kini responded that the company remains precautionary in its outlook and is not yet seeing a volume rebound despite pricing adjustments.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely watch (1) how quickly tariff-related uncertainty is resolved and whether this leads to a rebound in customer orders, (2) the pace and success of integrating recent acquisitions, particularly within life sciences and compressor segments, and (3) progress in expanding aftermarket and recurring revenue streams. Execution on these fronts will be critical for margin recovery and long-term stability.
Ingersoll Rand currently trades at $78.40, down from $84.70 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
The Best Stocks for High-Quality Investors
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
