01—Abstract
Summary
Summary of the 10-Q filed May 2, 2025. Cited figures are marked; the original filing is the authoritative source.
Ingersoll Rand Inc. reported first-quarter 2025 revenues of $1,716.8 milliona, up from $1,670.1 million in the prior-year quarter, with the filing attributing the increase primarily to acquisitions of $139.5 million and higher pricing of $23.8 million, partially offset by lower organic volumes of $88.9 million and unfavorable foreign currency impact of $27.7 million.
Operating income rose to $302.5 millionb from $293.2 million, but net income attributable to Ingersoll Rand Inc. declined to $186.5 million from $202.2 million, mainly due to higher interest expense of $61.2 million versus $36.8 million, which the filing ties to debt issued to fund the ILC Dover acquisition. Diluted EPS was $0.46 versus $0.50. Cash generation improved meaningfully.
Net cash provided by operating activities was $256.4 millionc compared with $161.6 million, and free cash flow, a non-GAAP measure defined by the company as operating cash flow less capital expenditures, was $222.7 million versus $99.3 million. Adjusted EBITDA was essentially flat at $459.7 million, and the company's Segment Adjusted EBITDA margin declined in both segments. Cash and cash equivalents were $1,612.8 million at March 31, 2025, and the company reported $2,600.0 million of unused availability under its Revolving Credit Facility and Commercial Paper Program.
Management noted that U.S. tariff policy and reciprocal trade measures have not had a material impact to date but could be material in the future. The filing also discloses a subsequent event: on May 1, 2025, the Board authorized a $1.0 billiond increase to the share repurchase program, incremental to the $993.0 million remaining under the existing authorization.
02—Key points
Key Highlights
- Revenues of $1,716.8 million, up from $1,670.1 million, driven by acquisitions ($139.5 million) and higher pricing ($23.8 million), offset by lower organic volumes ($88.9 million) and currency ($27.7 million).
- Net income attributable to Ingersoll Rand Inc. fell to $186.5 million from $202.2 million; diluted EPS was $0.46 versus $0.50.
- Interest expense rose to $61.2 million from $36.8 million, mainly from debt used to fund the ILC Dover acquisition.
- Operating cash flow was $256.4 million (vs. $161.6 million) and free cash flow was $222.7 million (vs. $99.3 million).
- Segment Adjusted EBITDA: Industrial Technologies and Services declined to $389.1 million from $411.1 million; Precision and Science Technologies rose to $106.2 million from $91.4 million.
- Cash of $1,612.8 million at March 31, 2025, with $2,600.0 million of unused revolver and commercial paper capacity; company was in compliance with all debt covenants.
- On May 1, 2025, the Board authorized a $1.0 billion increase to the share repurchase program, in addition to $993.0 million remaining.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, Ingersoll Rand kept $0.11.
- Revenue$1.72B100.0%
- Cost of revenue−$951.3M55.4%
- Gross profit$765.5M44.6%
- Operating costs−$463.0M27.0%
- Operating income$302.5M17.6%
- Interest, other & tax−$116.0M6.8%
- Net income$186.5M10.9%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed May 2, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $1.72B$1.67B | +2.8% |
| Cost of Revenue | $951.30M$923.80M | +3.0% |
| Gross Profit | $765.50M$746.30M | +2.6% |
| SG&A Expenses | $350.00M$336.30M | +4.1% |
| Operating Income | $302.50M$293.20M | +3.2% |
| Net Income | $186.50M$202.20M | −7.8% |
| EPS (Basic) | $0.46$0.50 | −8.0% |
| EPS (Diluted) | $0.46$0.50 | −8.0% |
| Shares Outstanding (Basic) | 403.10M403.50M | −0.1% |
| Shares Outstanding (Diluted) | 406.40M407.90M | −0.4% |
05—Questions
Frequently Asked Questions
Why did net income decline even though revenue and operating income grew?
The filing attributes the decline in net income primarily to higher interest expense ($61.2 million vs. $36.8 million), higher selling and administrative expenses ($350.0 million vs. $336.3 million), and a higher provision for income taxes ($58.5 million vs. $54.4 million), partially offset by higher gross profit on increased revenues. The effective tax rate rose to 23.1% from 20.2%, mainly due to a smaller windfall tax deduction benefit.
How did the ILC Dover acquisition affect the company's debt and interest costs?
The company issued $3,300.0 million of senior unsecured notes in May 2024, using proceeds of the 2027, 2029 and 2031 notes to partially fund ILC Dover's initial cash consideration of $2,349.7 million. Management attributes the rise in interest expense to the increase in long-term debt used to fund that acquisition, partially offset by interest rate derivative contracts. The weighted average interest rate, including derivatives, was approximately 5.0% versus 5.3% a year earlier.
What drove the improvement in free cash flow?
Free cash flow increased $123.4 million to $222.7 million, due to higher cash from operations ($256.4 million vs. $161.6 million) and lower capital expenditures ($33.7 million vs. $62.3 million). Operating cash flow improved mainly from lower cash used in operating working capital, the timing of incentive compensation and Senior Note interest payments, and lower tax payments, partly offset by higher cash used for other working capital items and lower net income.
What is the company's liquidity position and how much capacity remains for future borrowing or repurchases?
As of March 31, 2025, the company had cash and cash equivalents of $1,612.8 million and total debt of $4,772.1 million. It had $2,600.0 million of unused availability under both the Revolving Credit Facility and Commercial Paper Program, and the Revolving Credit Facility can be increased by up to $1,000.0 million, subject to a leverage ratio. Subsequent to quarter-end, the Board authorized a $1.0 billion increase to the share repurchase program.
What risks did management identify regarding trade policy and tariffs?
Management stated that U.S. government tariffs on imports and reciprocal or retaliatory tariffs by other countries have not had a material impact on financial condition or results to date. However, given their evolving nature and expected persistence of macroeconomic volatility, management said it cannot predict their ultimate impact and that those impacts could be material. The company is monitoring developments and analyzing effects on its cost structure, supply chain and business.
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