Ingersoll Rand grew Q2 2026 revenue 8.5% to $2.05B (4.1% organic) and adjusted EPS 7.5% to $0.86, but adjusted EBITDA margin fell to 25.4% as IT&S margins slipped; full-year revenue guidance was raised while profit guidance held.
Revenue
$2.0B
+8.5% YoY
Net income
$257M
Diluted EPS
$0.66
Operating margin
18.6%
Overview
Ingersoll Rand, which makes industrial air compressors, vacuum pumps and blowers plus precision pumps and fluid-handling equipment for life sciences and industry, grew second-quarter 2026 revenue 8.5% to $2,048.8 million. About half of that growth was organic, meaning it excludes acquisitions and currency swings: organic revenue rose 4.1%, acquisitions added 2.8% and a weaker dollar added 1.6%.
The bottom line swung from a $115.3 million loss to a $256.8 million profit, but that comparison flatters the quarter. Q2 2025 carried $265.8 million of goodwill and trade-name write-downs plus a $120.9 million write-down of an equity investment, none of which recurred. On the company's adjusted basis, which strips out items like these, earnings per share rose 7.5% to $0.86. Adjusted EBITDA margin fell 160 basis points (1.6 percentage points) to 25.4%. Put simply, sales grew faster than profit.
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Revenue
$2,048.8M
$1,887.9M
+8.5%
Organic revenue growth
+4.1%
—
—
Gross margin
42.1%
43.7%
-1.6 pts
Operating income
$380.3M
$76.4M
+398%
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Operating margin is operating income as a share of revenue: the profit left after running the business, before interest and tax. Adjusted EBITDA is the company's own profit measure, not a standard accounting (GAAP) one: earnings before interest, tax, depreciation and amortization, also excluding items such as impairments, restructuring and deal costs. "n/m" means not meaningful, because the year-ago figure was a loss.
Why GAAP profit jumped: last year's write-downs and a one-off gain
Operating income rose from $76.4 million to $380.3 million. Most of that gap reflects charges taken in Q2 2025 that did not repeat. That quarter included a $229.7 million goodwill impairment and a $36.1 million trade-name impairment, both tied to businesses bought in the ILC Dover acquisition (the Biopharma and Aerospace & Defense units). Below operating income, the prior year also took a $120.9 million loss on an equity-method investment after its long-term forecast was cut.
This quarter also got help from a one-off gain. "Other operating expense (income), net" swung to $21.1 million of income from $19.9 million of expense a year earlier. The main reason was a $25.0 million recovery under the insurance policy that backed the seller's representations and warranties in the ILC Dover deal. Representations and warranties are the seller's contractual promises about the business being sold, and Ingersoll Rand claimed that some of them had been breached. Without that $25.0 million, operating income would have been $355.3 million, a 17.3% margin. The company excludes the recovery from its adjusted figures.
More of this is coming. The 10-Q says Ingersoll Rand settled for an additional $162.5 million early in the third quarter, to be recorded in Q3. That will inflate Q3 GAAP pre-tax profit by the same amount, and on this quarter's treatment it would again be left out of adjusted EPS.
The effective tax rate fell from 74.7% to 21.1%. The prior-year rate was distorted because the impairments were not tax-deductible.
Margins: gross profit is the soft spot
Gross margin is revenue minus the direct cost of making products, as a share of revenue. It fell from 43.7% to 42.1%, which management attributes "primarily" to "unfavorable product mix, partially offset by cost measures". Aftermarket parts and services, a revenue stream that typically earns higher margins, slipped from 36.6% to 35.9% of total revenue. Selling and administrative expenses rose 8.0% to $400.8 million because of acquisitions and higher incentive pay. That was roughly in line with revenue growth, so these costs held at about 19.6% of sales.
Amortization of intangible assets rose $11.0 million to $102.6 million. Amortization is the gradual write-off of the value of acquired customer relationships, technology and brand names. The increase came from businesses bought in 2025 and from some trade names that were reclassified in Q4 2025 as having finite lives. This is a non-cash cost, and most of it is excluded from adjusted EPS, which is one reason adjusted EPS ($0.86) sits well above GAAP EPS ($0.66).
Segment performance
Segment
Orders
Orders YoY (organic)
Revenue
Revenue YoY (organic)
Adj. EBITDA
Adj. EBITDA margin
Industrial Technologies & Services (IT&S)
$1,620.7M
+3.8% (+0.1%)
$1,622.1M
+8.7% (+4.2%)
$434.5M
26.8% (vs 28.6%)
Precision & Science Technologies (P&ST)
$422.2M
+11.5% (+7.4%)
$426.7M
+7.7% (+3.9%)
$134.5M
31.5% (vs 29.5%)
IT&S (about 79% of revenue: compressors, vacuum pumps, blowers, power tools, lifting equipment). Revenue grew 8.7%, including 4.2% organic growth, and the earnings release says organic revenue grew in every region. Orders, however, were essentially flat organically (+0.1%, or $2.1 million). Per the release, healthy compressor demand, especially in North America, was offset by the timing of long-cycle blower and vacuum project orders in Europe and by the ongoing effect of the Middle East conflict.
Segment adjusted EBITDA rose only 1.7%, and its margin fell 180 basis points to 26.8%. In the 10-Q's breakdown, acquisitions added $9.7 million and currency added $5.8 million. Against that, organic gross profit fell $4.4 million and selling and administrative costs rose $3.0 million. The release attributes the margin decline largely to "challenges in offsetting inflationary impacts with price primarily in China" and to continued commercial investment. Organic revenue grew $62.3 million while organic gross profit fell, so the core business sold more but earned less on it.
P&ST (about 21% of revenue: precision pumps, fluid handling, life sciences, aerospace and defense). This was the stronger segment. Organic orders rose 7.4%. The release describes growth as low double digits in Life Sciences and mid single digits in Precision Technologies. Adjusted EBITDA rose 15.2% to $134.5 million, and the margin rose 200 basis points to 31.5%. The gains came from higher organic gross profit ($7.8 million), lower selling and administrative costs ($4.4 million) and acquisitions ($4.0 million). The ILC Dover units written down a year ago sit in this segment, so its improving margin addresses the weakest part of the recent record.
Orders and acquisitions
Total orders were $2,042.9 million, up 5.3%. Only 1.6 points of that growth was organic; acquisitions added 2.4 points and currency 1.3 points. Book-to-bill is new orders divided by revenue shipped, and a reading above 1.0x means the order book is growing. It was 1.00x, down from about 1.03x a year earlier. For the first half as a whole, IT&S organic orders fell 1.2% and P&ST's rose 3.9%. At quarter-end, the company expected to recognize $812.5 million of revenue over the next twelve months from contracts lasting more than a year.
Acquisitions added $53.4 million of revenue in the quarter ($117.3 million in the first half). They also added $13.7 million of segment adjusted EBITDA: $9.7 million in IT&S and $4.0 million in P&ST. The company spent $110 million on acquisitions in Q2, including Fox s.r.l. It also announced a deal for the filter maker Fai Filtri s.r.l., expected to close in Q4 2026, and said it expected to close its purchase of a U.S. blower manufacturer on July 31, 2026.
Cash and balance sheet
Operating cash flow was $295.9 million. Free cash flow, which is operating cash flow minus capital spending, was $268.9 million, up from $210.4 million. The 10-Q notes that both figures include the $25 million insurance collection. Without it, free cash flow would have been about $244 million, still ahead of the prior year.
The company bought back $240 million of stock and paid $8 million in dividends. Adjusted diluted shares fell to 391.9 million from 403.3 million, which is part of why adjusted EPS grew 7.5% while adjusted EBITDA grew 2.1%. Total debt was $4,768.5 million against $1,173.5 million of cash. Net debt stood at 1.7x trailing adjusted EBITDA, and Moody's upgraded the company to Baa1 in June.
Takeaway: The swing in reported profit is mostly accounting: last year's write-downs did not recur, and a $25 million insurance recovery helped this year. The underlying picture is mixed. Organic revenue grew 4.1%, but adjusted EBITDA grew only 2.1% and its margin fell 1.6 points. The larger IT&S segment could not raise prices enough to cover inflation, especially in China, and its organic orders were flat. The smaller P&ST segment is where orders and margins are both improving.
Outlook
In the July 30 earnings release, management raised full-year 2026 revenue growth guidance to 4.5%–6.5%, from 2.5%–4.5% in April. Organic growth is now expected at +1% to +3% (previously flat to +2%). Acquisitions are expected to add about 2.5% (previously about 2%) and currency about 1% (previously about 0.5%).
Profit guidance did not rise with it. Adjusted EBITDA guidance stayed at $2,130–2,190 million and adjusted EPS guidance at $3.45–3.57. The company now expects adjusted EPS to "finish near the high end of the range". That expectation leans partly on a lower assumed tax rate (about 22%, previously about 23%) and fewer shares (about 391.5 million, previously about 394 million). Management expects 54% of full-year adjusted EBITDA and adjusted EPS to come in the second half, and free cash flow of about 95% of adjusted net income.
Our read: raising revenue guidance while leaving EBITDA guidance unchanged implies the extra sales will come at lower margins, which is consistent with what IT&S showed this quarter. The things to watch in Q3 are whether IT&S pricing catches up with inflation, whether the European blower and vacuum project orders turn out to be delayed rather than lost, and how far the $162.5 million ILC Dover settlement lifts GAAP earnings above the adjusted figures.