IDEX Corporation Q3 2026: sales +8% to $952M, EPS +15% to $1.95 as AI-driven Health & Science grew 13%

IDEX makes pumps, flow meters, precision fluidic and optical components, fire-rescue tools and other engineered parts that go inside other companies' equipment. In the third quarter of 2026 (July–September) its sales rose 8.3% to $951.7 million, a record, and diluted earnings per share (EPS) rose 15% to $1.95. Growth was 8% on an organic basis too, meaning after stripping out acquisitions and currency swings, so this was real extra demand rather than bought or translated revenue. As in Q2, most of it came from the Health & Science Technologies segment, where AI-driven demand for data-center power and semiconductor equipment lifted organic sales 13%.

This analysis is written from the earnings release (Form 8-K, Exhibit 99.1) filed October 28, 2026. The full 10-Q, with the detailed management discussion, has not been filed yet.

Q3 2026 in numbers

Operating margin is the share of sales left after running the business, before interest and tax (our calculation from operating income ÷ net sales). Adjusted EBITDA is IDEX's own measure of earnings before interest, tax, depreciation and amortization, with restructuring and a few other items removed; it is how the company measures its segments. A basis point (bp) is one hundredth of a percentage point.

Segments: one engine, two steadier businesses

HST produced $52.5 million of the company's $73.0 million sales increase. The release attributes the growth to "higher volumes primarily due to AI-driven demand for data center power and semiconductor markets, as well as strength in space and defense and positive price." The Micro-LAM acquisition (July 2025) added about 1 point. Adjusted EBITDA rose $19.4 million to $124.8 million: more sales spread over largely fixed costs, partly offset by higher pay costs, including bonuses.

FMT, IDEX's highest-margin business, grew organically 4%, but mostly from price increases rather than more units. Higher volumes in municipal water, semiconductor and industrial markets were "partially offset by lower volumes in our businesses serving chemical, agriculture and energy markets." A stronger dollar cut about 1 point from reported growth. The margin was up only 20 bps because the product mix shifted toward lower-margin items and bonuses rose.

FSDP improved the most from Q2. Organic sales rose 6%, driven by higher volumes at BAND-IT (clamping and banding products) and the Fire & Safety businesses, plus price. The margin gained 140 bps on volume, mix and productivity, partly offset by input costs rising faster than prices (price/cost headwinds).

Corporate costs rose to $25.5 million from $21.7 million (+17.5%), again mainly variable compensation. That trimmed the consolidated margin gain relative to the segments.

Takeaway: The growth is real and it reached the bottom line without help. EPS rose 15% from 8% organic growth, wider margins and a 1.6% smaller share count, with no tariff refund or one-off gain behind it. But IDEX still depends on one segment: HST's AI, semiconductor and defense customers produced over 70% of the quarter's sales increase, and FMT's chemical, agriculture and energy volumes are still falling.

What the headline numbers hide

• No tariff refund this time, and margins still rose. Our Q2 report flagged that Q2's margin expansion relied on a one-time refund of struck-down tariffs (worth about 130 bps of adjusted EBITDA margin). The Q3 release mentions no such benefit. Adjusted EBITDA margin was 27.8%, up 50 bps year over year. That is lower than Q2's refund-boosted 28.1% but about a point above Q2's roughly 26.8% without the refund (our Q2 estimate). The underlying margin improved.
• GAAP vs adjusted. Adjusted EPS ($2.33) sits $0.38 above GAAP EPS ($1.95). Nearly all of the gap ($0.32 after tax) is amortization of intangible assets from past acquisitions, a non-cash charge IDEX excludes every quarter. The rest is $4.2 million of pre-tax restructuring tied to closing an HST facility ($0.05 after tax), against almost nothing a year ago. Both measures grew about 15%, so the adjustments don't change the story.
• Where EPS growth came from. Operating income rose 11.9%, or 13.7% if the restructuring charge is set aside (our calculation). The tax rate was essentially flat (25.3% vs 25.1%), and lower interest expense ($15.4M vs $16.5M) helped only slightly. The 1.6% drop in diluted shares, from $74.6 million of buybacks this quarter and $228.0 million year to date, explains about 2 points of the 14.7% EPS growth. The rest came from the business.
• Cash conversion was strong. Operating cash flow rose 18% to $239.5 million, 166% of net income. The release says this came from higher earnings and better working capital "driven by timing of shipments and collection of receivables during the prior year period," partly offset by higher cash tax payments. Year to date, operating cash flow is 133% of net income, the same as last year, so Q3's figure is partly timing.
• Inventory is growing faster than sales. Inventories reached $529.1 million, up 10.4% since December, against 7.8% nine-month sales growth. Inventory build has used $55.6 million of cash so far this year. With orders running ahead of shipments, this looks like stocking up for the order book rather than unsold goods, but it is worth watching if orders slow.
• Guidance went up again. Full-year adjusted EPS guidance is now $8.91–$8.96, up from $8.70–$8.85 in July and $8.35–$8.55 before that.

On balance the quarter is clean: reported and adjusted EPS both rose about 15%, mostly from operating growth, with no material one-off in either year and only a small restructuring charge.

Did last time's read hold up?

Our Q2 report said the record orders pointed to a stronger second half, and named three things to watch. Mostly yes. Q3 organic growth of 8% beat the 5%–7% guide, and adjusted EPS beat the $2.20–$2.25 range. Margins grew without the refund (27.8% vs 27.3% a year ago). FSDP, flat to down in Q2, grew 6% organically. The one item that didn't improve: FMT's energy, agriculture and chemical volumes are still lower.

Outlook

Management raised full-year 2026 guidance for the second quarter in a row:

• Organic sales growth: 6.5% to 6.8% (previously 5% to 6%)
• Adjusted diluted EPS: $8.91 to $8.96, about 12% growth at the midpoint (previously $8.70 to $8.85)

IDEX has earned $6.65 of adjusted EPS in the first nine months, so the new range implies $2.26–$2.31 for Q4 (our arithmetic). Our Q2 report's arithmetic gave $2.18–$2.28. Most of the full-year raise is the Q3 beat; the rest is a slightly higher Q4. Nine-month organic growth was 6%. Reaching 6.5%–6.8% for the year implies Q4 organic growth of roughly 8%–9% (rough, because the 6% is rounded). That would be about Q3's pace.

Our view: the targets look reachable. Orders exceeded sales again, and Q3 beat guidance. The risk is concentration: HST's AI and semiconductor demand is doing most of the work, and orders dipped from Q2's record. Things to watch in Q4 and the 10-Q:

• Whether orders stay above sales. Book-to-bill fell from about 1.16 in Q2 to 1.04 in Q3 (our calculation).
• Whether FMT's chemical, agriculture and energy volumes stop falling.
• Whether inventory growth slows back toward sales growth.

Source: IDEX earnings release for the quarter ended September 30, 2026 (Form 8-K, Exhibit 99.1), filed October 28, 2026. The Form 10-Q has not yet been filed.