Key financial results
- Orders: Third quarter orders finished at $2.35 billion, up 21% year-over-year, with organic orders up 18%.
Orders finished at $2.35 billion, up 21% year-over-year, with organic orders up 18%.
- Book-to-bill: Book-to-bill finished at 1.14x for the quarter.
Book-to-bill finished at 1.14x, well above what we typically see in the third quarter
- Revenue: Revenue grew 6% year-over-year to $2.1 billion, with organic revenue growth of 4%.
Revenue grew 6% year-over-year to $2.1 billion, with organic revenue growth of 4%.
- Aftermarket: Aftermarket revenue represented 36% of total revenue during the quarter and grew mid-single digits.
Aftermarket revenue represented 36% of total revenue during the quarter and continues to be an important contributor
- Adjusted EBITDA: Adjusted EBITDA was $584 million, including $32 million of IEEPA tariff refunds received in the quarter.
Adjusted EBITDA was $584 million. This includes $32 million of IEEPA tariff refunds received in the quarter
- Adjusted EBITDA margin: Excluding tariff refunds, adjusted EBITDA was $552 million, up 1% year-over-year with a margin of 26.7%.
Excluding those refunds, adjusted EBITDA was $552 million, up 1% year-over-year with a margin of 26.7%.
- Corporate costs: Unallocated corporate costs were $44 million in the quarter.
Unallocated corporate costs were $44 million in the quarter
- Tax rate: Adjusted tax rate for the quarter was approximately 17%.
Notably, our adjusted tax rate for the quarter was approximately 17%.
- Adjusted EPS: Adjusted EPS was $1.07 for the quarter, and excluding IEEPA tariff refunds, adjusted EPS was $1.01, up 17% year-over-year.
Adjusted EPS was $1.07 for the quarter. And excluding IEEPA tariff refunds in Q3, adjusted EPS was $1.01, up 17% year-over-year.
Business segment results
- ITS: ITS orders increased 25% year-over-year, including 22% organic growth, resulting in a book-to-bill of 1.17x.
ITS delivered a strong quarter. Orders increased 25% year-over-year, including 22% organic growth, resulting in a book-to-bill of 1.17x.
- ITS: ITS revenue increased 5% year-over-year, including organic growth of 4%, with all regions contributing positive organic revenue growth.
Revenue increased 5% year-over-year, including organic growth of 4%, with all regions contributing positive organic revenue growth for the second consecutive quarter.
- ITS: ITS adjusted EBITDA, excluding IEEPA tariff refunds, was $451 million with a 27.8% margin.
ITS adjusted EBITDA, excluding IEEPA tariff refunds was $451 million with a 27.8% margin
- PST: PST orders increased 7% year-over-year, including 4% organic growth with a book-to-bill of 1.01x.
PST delivered another excellent quarter and continues to demonstrate the strength of the platform we have built. Orders increased 7% year-over-year, including 4% organic growth with a book-to-bill of 1.01x.
- PST: PST revenue increased 7%, including 6% organic growth.
Revenue increased 7%, including 6% organic growth.
- PST: Life Science Technologies delivered low double-digit growth in both orders and revenue.
Life Science Technologies continued to deliver solid momentum with low double-digit growth in both orders and revenue.
- PST: PST adjusted EBITDA, excluding IEEPA tariff refunds, was $145 million with a 32.6% margin.
Excluding IEEPA tariff refund, adjusted EBITDA was $145 million with a 32.6% margin
Capital allocation
- Cash flow: Free cash flow for the quarter was $623 million, including $162.5 million of ILC Dover transaction-related recoveries.
Free cash flow for the quarter was $623 million, which includes $162.5 million of ILC Dover transaction-related recoveries collected in the quarter.
- Cash flow: Excluding recoveries, free cash flow was approximately $461 million, up roughly 40% year-over-year.
Excluding those recoveries, free cash flow was approximately $461 million, up roughly 40% year-over-year.
- Liquidity: Total available liquidity ended at approximately $3.9 billion, including $1.3 billion of cash and $2.6 billion of revolving credit facility capacity.
We ended the quarter with approximately $3.9 billion of total available liquidity, including approximately $1.3 billion of cash and $2.6 billion of available revolving credit facility capacity.
- Leverage: Leverage improved to 1.6x, down from 1.7x last quarter and 1.8x a year ago.
Leverage improved to 1.6x, down from 1.7x last quarter and 1.8x a year ago.
- Capital deployment: During the quarter, the company deployed $90 million towards acquisitions and returned $358 million to shareholders through $350 million of share repurchases and dividends.
During the quarter, we deployed $90 million towards acquisitions and returned $358 million to shareholders through a $350 million of share repurchases and our quarterly dividend.
- Share repurchases: The Board authorized a $2 billion increase to the share repurchase program incremental to the $313 million remaining under the existing authorization.
the Board authorized a $2 billion increase to our share repurchase program incremental to the $313 million remaining under the existing authorization.
- ILC Dover: Total gross recoveries for ILC Dover reached approximately $425.1 million.
brings total gross recoveries to approximately $425.1 million.
Industry trends and dynamics
- Demand: Short to medium cycle businesses and long cycle project bookings improved meaningfully.
pickup in short to medium cycle business, coupled with long cycle project bookings improving meaningfully.
- Margins: Known inflationary pressures and pricing dynamics in China impacted margins year-over-year.
The year-over-year margin decline was driven primarily by the known inflationary pressures and pricing dynamics in China.
- End markets: End markets like electric vehicles and renewable natural gas remained flat or down.
electric vehicle and also renewable natural gas. Those are kind of end markets that are having kind of down and flattish here for now quite some time
Competitive landscape
- Competitive advantage: Technology breadth and global engineered-to-order capabilities provide a clear competitive advantage over competitors who cannot easily copy complete solutions.
- Data centers: The company won an approximately $195 million engineered-to-order solution for mission-critical data center infrastructure.
later in the period, we booked an approximately $195 million order that is an engineered-to-order solution for mission-critical data center infrastructure.
Macroeconomic environment
- Macro environment: Management noted a complex global environment while staying nimble and leveraging in-region-for-region manufacturing.
In a complex global environment, we continue to stay nimble, leveraging our in-region-for-region manufacturing footprint and pivoting quickly
Growth opportunities and strategies
- M&A: M&A remains the top priority for capital deployment, supported by a robust pipeline of strategic bolt-on opportunities.
M&A continues to be our top priority for capital deployment supported by a robust pipeline of attractive strategic bolt-on opportunities.
- Acquisitions: The company closed the acquisition of Corporation on the morning of the call, adding approximately $40 million in annual revenue.
- Acquisitions: Year-to-date, the company has closed or signed 8 transactions, with 7 additional transactions at the LOI stage.
Year-to-date, we have closed or signed 8 transactions, and we have an additional 7 transactions at the LOI stage.
- Inorganic revenue: For 2026, the company expects approximately 200 to 300 basis points of annualized inorganic revenue.
For 2026, we now expect to be approximately 200 to 300 basis points of annualized inorganic revenue.
Financial guidance and outlook
- Revenue guidance: Full year revenue growth is expected to be in the range of 5.5% to 7%, with organic growth expected between 2% and 3.5%.
- EBITDA guidance: Adjusted EBITDA guidance, excluding Q3 IEEPA tariff refunds, is unchanged at $2.13 billion to $2.19 billion, expecting to finish at the bottom half.
- EPS guidance: Adjusted EPS, excluding Q3 IEEPA tariff refunds, is raised to $3.58 to $3.70.
We're raising adjusted EPS, excluding Q3 IEEPA tariff refunds to $3.58 to $3.70.
- Tax rate guidance: Full year adjusted tax rate is expected to be approximately 20%.
we now expect a full year adjusted tax rate of approximately 20%.
- Share count: Share count is expected to be approximately 390.5 million.
lower share count of approximately 390.5 million
- Interest expense: Net interest expenses are expected to finish at approximately $230 million.
Net interest expenses is still expected to finish at approximately $230 million.
- Cash flow guidance: Free cash flow conversion is expected to be more than 100% of adjusted net income including recoveries, with underlying operational conversion at approximately 95%.
Q3 FY2026 results
| Metric | Result | Change |
|---|---|---|
| Orders | $2.35 billion | up 21% year-over-year |
| Revenue | $2.1 billion | up 6% year-over-year |
| Adjusted EBITDA (excluding refunds) | $552 million | up 1% year-over-year |
| Adjusted EPS (excluding refunds) | $1.01 | up 17% year-over-year |
| Free cash flow | $623 million | up roughly 40% year-over-year |
How management sounded
Balanced (+35 on our -100 to +100 scale). Management highlighted robust order momentum, raised full-year guidance, and announced a $2 billion share repurchase authorization increase. Management sounded more upbeat than on 20% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Read the analyst Q&A summary and guidance and outlook for this call.
What to watch before the next call
- The execution and revenue conversion of the $195 million engineered-to-order data center solution throughout 2027.
- The progression of price-cost recovery and stabilization of pricing dynamics in China.
- Collection of remaining ILC Dover transaction-related recoveries in the fourth quarter.
Earlier calls
- Q2 2026 (Jul 31, 2026), tone Balanced: Ingersoll Rand reported second quarter organic revenue growth of 4% and raised its full year revenue guidance, driven by healthy demand and strong operational execution.
