Snapshot
Idex Corp /De/ reported $899M of revenue in Q4 2025, up 4.2% year over year, with diluted EPS of $1.71 and an operating margin of 20.4%.
- Revenue
- $899M
- YoY growth
- +4.2%
- Diluted EPS
- $1.71
- Operating margin
- 20.4%
What management said
- •We released our Q4 financial results earlier this morning, and you can find both our press release and earnings call slide presentation in the Investors section of our website, IDEXCorp.com.
- •Today's call will begin with Eric providing highlights of our Q4 fiscal year results and a discussion of our current business outlook and strategies.
- •Then Sean will discuss additional financial details and our outlook for 2026.
- •Prior to joining IDEX, Sean served as CFO at AAR Corp for over seven years, and he brings extensive experience driving profitable growth, operational execution, and disciplined capital allocation.
- •His expertise and track record of successfully implementing operational efficiencies, optimizing portfolios, and executing on strategic M&A fully complement IDEX's strategy.
- •We'll go into each of these in more detail, but we delivered organic sales growth and margin expansion for IDEX while also significantly expanding the order book within HST as we closed out 2025.
- •As a key element of this strategy, we built new scalable growth platforms that allow us to compound our efforts through cross-business unit collaboration.
- •Please turn to slide four, where I'd like to illustrate how this work is paying off within our HST segment.
- •We've seen acceleration in order rates over the last year and a half, with our strongest mark coming in Q4 of 2025 with organic orders growth of 34%.
- •This has driven organic sales growth towards a mid-single-digit level as we move into 2026.
- •In our Performance Pneumatics group, we are helping customers support data center construction driven by demand from artificial intelligence.
- •We first talked about this emerging growth potential about a year ago.
What went well
- •IDEX delivered better-than-expected Q4 2025 results, with organic revenue growth of 1% and adjusted EPS coming in above the guided range.
- •The HST segment was the standout, growing organic orders 34% and organic sales 5%, reaching a record order book of $493 million driven by data-center-related demand in power, semiconductor, and optical switching, plus strength in municipal water, food and pharma, and space and defense.
- •Adjusted EBITDA margin expanded 40 basis points year-over-year on positive price cost, productivity, and cost discipline, and HST margin expanded 60 basis points.
- •Overall orders grew 16% organically, and the company generated $617 million of full-year free cash flow at 103% conversion while reducing gross leverage from 2.2 to 2.0 times.
- •IDEX also realized roughly $60 million of cost savings in 2025 and returned capital via $213 million in dividends and nearly $250 million in share repurchases.
What went wrong
- •Industrial and auto exposures within HST (about 20% of segment revenue) remained flattish with no meaningful signs of demand improvement.
- •FMT saw noticeable softness in chemical, energy, and agriculture markets, and FMT adjusted EBITDA margin declined 20 basis points year-over-year on volume deleverage, higher employee costs, and unfavorable mix.
- •FSDP organic sales declined 5% for the second consecutive quarter on continued weakness in fire and safety outside the US and subdued capital spending in dispensing.
- •The prolonged government shutdown added pressure to the Life Sciences business late in the year, and overall IDEX gross margin was flat as price cost and productivity were offset by volume deleverage and mix.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Organic revenue growth | FY2026 | — | 1%-2% | new |
| Price contribution | FY2026 | ~3% (FY2025) | 1%-2% | down |
| Share repurchase pace | FY2026 quarterly | ~$75M/quarter (H2 2025) | ~$75M/quarter | flat |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Organic revenue | +1% | Positive price more than offset volume declines; HST strength offset FSDP weakness |
| Organic orders | +16% | Record HST order activity, particularly data-center-related demand |
| HST organic orders | +34% | Data center, semiconductor consumables, space and defense demand |
| HST organic sales | +5% | Volume gains in data center, semiconductor consumables, and space and defense |
| FMT organic sales | +1% | Municipal water and mining strength offset by chemical, energy, and ag softness |
| FSDP organic sales | -5% | Weakness in fire and safety outside the US and subdued dispensing capital spend |
| Adjusted EBITDA margin | +40 bps | Positive price cost, productivity, and cost discipline over volume deleverage |
| Free cash flow (FY) | +2% | $617M at 103% conversion of adjusted net income |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Data center / AI demand | Emerging potential flagged ~a year ago | Strongest order driver in HST; ~half of $100M+ backlog build | accelerating |
| 80/20 growth platform strategy | Phase three of evolution underway | Growth disproportionately coming from cross-business platforms | improving |
| Industrial / PMI inflection | Three years of PMI contraction | PMI above 50 but no inflection yet in short-cycle businesses | watching / stable |
| M&A posture | Aggressive capital deployment over recent years | Near-term focus on integration; new deals likely bolt-on | more conservative |
| Municipal water | Steady contributor | Double-digit Q4 growth; mid-single-digit-plus outlook | improving |
Q&A summary
Given the PMI finally moved above 50, what is the demand outlook based on your short-cycle bellwether businesses?
The 6-7 rapid-replenishment businesses stayed steady through January but have not inflected up yet; management is pleased with the headline but has not seen the actual inflection, and can chase upside without adding resources or capital when it comes.
How much did price contribute in 2025 and what is assumed in the 2026 organic growth outlook?
Price was around 3% in FY2025 (about 3.5% in Q4), and 2026 guidance assumes roughly 1%-2% price contribution — lower than last year but still additive, with roughly flat volumes overall.
What explains the disconnect between strong HST orders and revenue conversion, and when does it normalize?
FMT has a typical weather-driven Q1 dip that recovers in Q2; HST now adds some larger orders (e.g., Material Processing Technologies CapEx) captured late in Q4 with long lead times that ship into Q2, producing a V-shaped profile.
How much of the 34% HST order growth was AI/data-center related versus year-end budget activity?
Just under half of the year-over-year backlog build is in direct data center applications, with much of the rest one or two steps over (e.g., semiconductor memory); January was also strong, so year-end budget effects were not the majority of the growth.
Are there incremental cost-takeout actions planned for 2026?
No round-two cost takeout is in the guide beyond normal-course productivity; of the ~$60M of 2025 savings, ~$40M is structural and ~$20M was temporary, some of which will be allowed back as the company invests in growth areas.
Should investors expect continued quarterly share repurchases in 2026?
Yes — expect a base of roughly $75 million per quarter, consistent with the second half of 2025, which could flex based on M&A activity and leverage.