Ingersoll Rand (IR) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 performance with revenue of $1,805 million, up 7% year-over-year, and record Adjusted EBITDA and EPS, driven by strong execution and the IRX engine despite macroeconomic challenges.

• Raised full-year 2024 guidance for revenue, Adjusted EBITDA, and Adjusted EPS based on solid first-half results and ongoing momentum.

• Focused on both organic and inorganic growth, with recent acquisitions, especially ILC Dover, expanding presence in life sciences and industrial markets and exceeding annualized inorganic revenue targets.

• Continued execution in high-growth, sustainable end markets, leveraging proprietary technologies and innovation.

• Orders grew 4% to $1,799 million; backlog remains near historic highs with a book-to-bill of 1.0x.

Financial highlights

• Q2 2024 revenue rose 7% year-over-year to $1.81B; organic revenue up 1% year-over-year; Adjusted EBITDA increased 16% to $495M with margin expanding 220 bps to 27.4%.

• Adjusted EPS grew 22% year-over-year to $0.83; net income attributable to IR was $185M; free cash flow for Q2 was $283M.

• Gross margin for Q2 2024 was 43.9%, up from 41.4% a year ago.

• Book-to-bill ratio at 1.0x for Q2 and 1H 2024; backlog remains strong.

• Total liquidity at $3.7B, with $1.1B cash on hand as of June 30, 2024.

Outlook and guidance

• Full-year 2024 revenue guidance raised to $7.26B–$7.40B, up 6–8% year-over-year; organic growth guidance revised to 0–2% due to China headwinds.

• Adjusted EBITDA guidance increased to $2.01B–$2.06B (up 12–15% YoY); Adjusted EPS guidance raised to $3.27–$3.37 (up 10–14% YoY).

• M&A expected to contribute up to $440M in revenue for 2024.

• Gross interest expense outlook for 2024 is $215M; capex at ~2% of revenue.

• Free cash flow to adjusted net income conversion expected at ~100%.