Ingersoll Rand Reaccelerates Growth as Margins Keep Slipping
Ingersoll Rand posted 9% revenue growth in the second quarter even as adjusted EBITDA margin held at 25.4%, down roughly 250 basis points from a year of steady compression.
Ingersoll Rand (IR) reported second-quarter revenue of $2,049 million, up 9% year over year, with organic growth of 4.1% accelerating from the roughly flat organic pace implied by segment detail in the first quarter. The industrial-equipment maker's orders told a different story: total orders of $2,043 million rose 5% on a reported basis but just 1.6% organically, a deceleration from the first quarter's order growth.
The quarter's central tension was margin. Adjusted EBITDA margin came in at 25.4%, flat sequentially with the first quarter but down from 27.7% in the fourth quarter of 2024 and 27.9% in the third quarter, a roughly 250-basis-point slide over four quarters. Corporate expenses not allocated to segments rose to $49.1 million from $34.6 million a year earlier, a 42% increase not addressed in the release narrative but visible in the segment reconciliation table.
The two reporting segments moved in opposite directions. Industrial Technologies & Services posted its fourth straight quarter of year-over-year margin compression, with Adjusted EBITDA margin falling 180 basis points to 26.8%, following declines of 170, 140 and 210 basis points in the three prior quarters. Yet the same segment's organic revenue growth turned positive for the first time in the comparison window, rising 4% after contractions of 2% in both the first quarter of 2025 and the third quarter of 2024, while organic orders improved to roughly flat from a 3% decline in the first quarter.
Precision & Science Technologies moved the other way. The segment's Adjusted EBITDA margin expanded 200 basis points year over year to 31.5%, extending gains of 280 basis points in the fourth quarter of 2024 and 120 basis points in the first quarter of 2025. Organic orders accelerated to 7% growth from 1% in the prior quarter, driven by low-double-digit growth in Life Sciences and mid-single-digit growth in Precision Technologies.
Net income attributable to Ingersoll Rand swung to $257 million, or $0.66 a share, from a GAAP net loss of $115.3 million a year earlier, a comparison shaped by the absence of a $265.8 million goodwill and intangible impairment and a $120.9 million equity-method investment loss that had depressed the year-ago period. Adjusted net income rose 7% to $339 million, or $0.86 a share, matching the same 7% adjusted EPS growth rate reported in the first quarter.
Free cash flow rose to $269 million, a 13.1% margin, from $210 million a year earlier and jumped sequentially from $163 million in the first quarter. Net debt to Adjusted EBITDA leverage held at 1.7x, unchanged from the prior quarter. Moody's upgraded Ingersoll Rand one notch to Baa1 in June, a rating action not disclosed in prior quarters.
Ingersoll Rand raised its full-year 2025 revenue growth guidance to a range of 4.5% to 6.5%, up from the 2.5% to 4.5% range given alongside fourth-quarter results. Adjusted EBITDA guidance of $2,130 million to $2,190 million and Adjusted EPS guidance of $3.45 to $3.57 were reiterated at the same absolute levels, with the company now expecting to finish near the high end of the EPS range.
Capital deployment picked up alongside the stronger orders picture. M&A spending more than doubled sequentially to $110 million from $52 million in the first quarter, alongside two new acquisition announcements, Fai Filtri and a U.S.-based blower manufacturer, not disclosed in prior releases. Share repurchases and dividends combined rose to $248 million from $97 million in the first quarter, a more than 2.5-times sequential increase.