Ingersoll Rand’s third quarter was met with a significant negative market reaction, as the company’s revenue and non-GAAP earnings per share matched Wall Street expectations, but underlying challenges began to surface. Management attributed the quarter’s results to persistent headwinds from recently implemented tariffs, slower organic growth across core industrial end markets, and delayed realization of pricing actions. CEO Vicente Reynal remarked that "the current dynamic tariff environment" is a temporary margin headwind, while CFO Vikram Kini highlighted proactive cost measures and disciplined M&A as key responses to these pressures.
Is now the time to buy IR? Find out in our full research report (it’s free for active Edge members).
Ingersoll Rand (IR) Q3 CY2025 Highlights:
- Revenue: $1.96 billion vs analyst estimates of $1.95 billion (5.1% year-on-year growth, in line)
- Adjusted EPS: $0.86 vs analyst estimates of $0.86 (in line)
- Adjusted EBITDA: $544.6 million vs analyst estimates of $541.2 million (27.9% margin, 0.6% beat)
- Management lowered its full-year Adjusted EPS guidance to $3.28 at the midpoint, a 3.5% decrease
- EBITDA guidance for the full year is $2.08 billion at the midpoint, below analyst estimates of $2.11 billion
- Operating Margin: 19.2%, in line with the same quarter last year
- Organic Revenue fell 1.3% year on year vs analyst estimates of flat growth (136 basis point miss)
- Market Capitalization: $30.98 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 Q3 Earnings Call
- Michael Halloran (Baird) asked about end market momentum and the potential for a systemic recovery. CEO Vicente Reynal cited ongoing order growth in most regions but stressed that tariff clarity remains the key to unlocking further industrial rebound.
- Julian Mitchell (Barclays) questioned the drivers of muted EBITDA margin incrementals. CFO Vikram Kini explained that tariffs, organic volume deleverage, and lower initial M&A margins were main factors, with better performance expected as pricing actions take effect.
- Jeffrey Sprague (Vertical Research) probed the gross headwind from tariffs and the timeline for price realization. Kini disclosed tariff impacts now exceed $100 million and confirmed price increases have been enacted but will take time to fully flow through.
- Andrew Kaplowitz (Citigroup) asked about clean energy vertical pressure and PST segment order dynamics. Reynal responded that tough U.S. clean energy comps have largely passed and highlighted broad-based PST order strength, including legacy Gardner Denver Medical.
- David Raso (Evercore ISI) explored competitive implications of Section 232 tariffs and pricing power. Reynal indicated that the removal of compressor exclusions could provide a regional advantage for Ingersoll Rand, potentially supporting market share gains.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will focus on (1) evidence that price increases are being realized in reported revenue as backlog unwinds, (2) the effectiveness of cost optimization efforts in supporting margin recovery, and (3) ongoing strength in the PST segment, especially in life sciences and medical markets. Progress on bolt-on acquisitions and any changes to the tariff regime will also be closely monitored as potential inflection points.
Ingersoll Rand currently trades at $78.28, in line with $78.68 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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