Ingersoll Rand (NYSE: IR) orders jump 21%, but EBITDA ex-refunds inches up

What happened

Ingersoll Rand Inc. (NYSE: IR) said third-quarter orders rose 21%, or 18% organic, to $2.35 billion. Revenue grew more slowly than orders, and profit growth shrank to 1% once tariff refunds were removed.

The company reported on Oct. 29, and every growth rate compares with the third quarter of 2025. Revenue rose 6% to $2.06 billion, or 4% organic. Adjusted EBITDA was $584 million, up 7%, at a 28.3% margin. Excluding IEEPA Tariff Refunds, it was $552 million, up 1%.

Net income attributable to Ingersoll Rand was $670 million, or $1.73 per share, up from $244.1 million a year earlier. Adjusted results leave out a $380.1 million net recovery of acquisition-related losses. Adjusted EPS was $1.07, up 24%, and $1.01, up 17%, excluding the tariff refunds.

Key numbers

Metric	Latest	Change	Source
Orders	$2.35 billion	from $1.94 billion, +21%	SEC 8-K, Exhibit 99.1
Revenue	$2.06 billion	+6%	SEC 8-K, Exhibit 99.1
Adjusted EBITDA	$584 million	from $544.6 million, +7%	SEC 8-K, Exhibit 99.1
Adjusted EBITDA excluding IEEPA Tariff Refunds	$552 million	+1%	SEC 8-K, Exhibit 99.1
Free cash flow	$623 million	from $325.5 million, +91.5%	Calculated from SEC 8-K
Increase to share repurchase authorization	$2 billion		SEC 8-K, Exhibit 99.1

Read more: Ingersoll Rand (IR) company research

Where orders and margins came from

The Industrial Technologies and Services segment drove the order jump. Its orders rose 25% to $1.90 billion, or 22% organic. A $195 million order for an engineered-to-order solution for large-scale, mission-critical infrastructure helped. Its book-to-bill ratio was 1.17x.

Margin moved the other way. The segment's adjusted EBITDA margin excluding the refunds was 27.8%, down 120 basis points from a year earlier. The company blamed mainly continued inflationary pressures. The margin was up 100 basis points from the second quarter.

Precision and Science Technologies posted better margins. Its revenue rose 7% to $445 million, or 6% organic, and its margin excluding the refunds was 32.6%, up 180 basis points. Life Sciences orders and revenue were up low double digits, and book-to-bill was 1.01x.

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Cash, buybacks and deals

Free cash flow was $623 million, compared with $325.5 million a year earlier. That is an increase of 91.5% by OptimistFi's calculation from the filing's reconciliation table. Operating cash flow was $648 million and capital spending was $25 million.

Settlements with insurance carriers and other third parties tied to the ILC Dover transaction carry gross recoveries of about $425.1 million. That includes the $187.5 million announced in July. Ingersoll Rand collected $25.0 million in the second quarter and $162.5 million in the third, and expects the rest in the fourth. Full-year free cash flow conversion of 100%+ of adjusted net income includes the recoveries. Without them, expected conversion is still 95%.

In the quarter the company spent $350 million on share repurchases, paid $8 million in dividends and put $90 million into M&A, including the previously announced Lone Star Blower, Inc. acquisition. The board added $2 billion to the repurchase authorization, on top of $313 million remaining. Timing depends on the stock price, market conditions and liquidity needs.

Net debt to adjusted EBITDA was 1.6x, down 0.2x from a year earlier. Liquidity was $3.9 billion at Sept. 30, including $1.3 billion of cash and $2.6 billion of undrawn credit capacity.

Why it matters

OptimistFi has argued that Ingersoll Rand works if its flow portfolio and acquisition model turn reliability-driven industrial demand into margin-rich cash, not just bigger revenue. This quarter supports the cash half of that view and leaves the margin half unproven.

Part of the cash gain is one-time, since the full-year conversion guidance counts the ILC Dover recoveries. Profit quality is the weaker point. By OptimistFi's arithmetic, the tariff refunds account for about $32 million of the gap between the two EBITDA figures.

Excluding the refunds, the adjusted EBITDA margin was 26.7%, down from 27.9% a year earlier, a drop of 1.2 percentage points. Orders running ahead of revenue give Ingersoll Rand business to convert. But the largest segment's margin fell on inflationary pressures.

What's next

Ingersoll Rand hosts its earnings call on Oct. 30 at 8 a.m. Eastern. It also expects to close the acquisition of a U.S.-based pump manufacturer on Oct. 30.

Updated full-year guidance calls for revenue growth of 5.5% to 7.0%, including organic growth of 2% to 3.5%. It also calls for adjusted EBITDA of $2.13 billion to $2.19 billion and adjusted EPS of $3.58 to $3.70, both excluding the third-quarter tariff refunds.

The company expects to collect about $238 million of remaining ILC Dover recoveries in the fourth quarter. Faster underlying EBITDA growth in the next quarterly report would strengthen the margin case. Another quarter of flat profit excluding refunds would weaken it.

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