Financial Health Snapshot
What does Ingersoll Rand financial health look like at a glance?
Strong. The biggest strength is liquidity and free cash flow, while the main concern is weaker organic orders.
For Q1 2026, this snapshot weighs growth, profitability, cash generation, balance-sheet capacity, and capital efficiency together. That mix matters because Ingersoll Rand can still fund operations and investment, even as demand trends deserve closer watch.
For deeper research, Exploring Ingersoll Rand Inc. (IR) Investor Profile: Who's Buying and Why? can help connect the company’s balance-sheet strength with investor interest. The first metric to analyze more deeply is free cash flow.
Revenue and Earnings Quality
Are Ingersoll Rand revenue and earnings high quality?
Mixed. Ingersoll Rand’s reported growth looks solid, but Q1 2026 organic order growth was down 19%, which weakens the underlying demand picture. The clearest confirmation is recurring aftermarket revenue; the clearest divergence is that reported growth is running ahead of organic demand.
Investors separate growth quantity from quality by comparing revenue durability with operating income, net income, and diluted EPS across the same annual or quarterly periods. That shows whether Ingersoll Rand is turning sales into real profit, or whether acquisitions, mix, or one-time items are doing more of the work. For a broader ownership lens, see Exploring Ingersoll Rand Inc. (IR) Investor Profile: Who's Buying and Why?
| Measure | Latest Period | Previous Period | Quality Test | Investor Meaning |
|---|---|---|---|---|
| Revenue | $185B, up 8% year-over-year, Q1 2026 | $765B, FY2025 | Unclear; reported growth is stronger than underlying organic demand | Growth is positive, but repeatability looks less certain because organic order growth was down 19% |
| Operating Income | $28970M, Q1 2026 | Not provided | Unsupported for a year-over-year leverage comparison | Profitability may be improving, but the missing prior-period figure limits a clean quality check |
| Net Income | $192M, Q1 2026 | $581M, FY2025 | Differently influenced by period mix; the periods are not directly comparable | Net income is positive, but the annual-to-quarter comparison is not enough to prove earnings quality |
| Diluted EPS | $049, Q1 2026 | $334, FY2025 | Not directly comparable across annual and quarterly periods | Per-share earnings remain positive, but shareholders need compatible periods to judge true momentum |
How durable is Ingersoll Rand revenue?
Durability is fairly strong because recurring aftermarket revenue from services and parts is projected to exceed 40% of total revenue by end-2025. The biggest limitation is visibility into new-order demand, since Q1 2026 organic order growth fell 19%.
- Demand Quality: Recurring aftermarket sales improve visibility, but new equipment demand still looks cyclical and less predictable.
- Pricing and Volume: The price-volume split was not provided, so the growth source cannot be cleanly separated.
- Diversification: The installed base and aftermarket mix help diversify revenue, while acquisition-driven expansion can add breadth but also complicate comparability.
That mix matters because stronger cash conversion usually comes from repeat service work and a large installed base.
Cash Quality
Does Ingersoll Rand turn profit into cash reliably?
Yes, Ingersoll Rand appears to convert profit into cash well. FY2025 free cash flow was $122B with 105% conversion of net income, and Q1 2026 free cash flow stayed positive at $163M, though it was softer than $223M in Q1 2025.
Profitability and cash flow are not the same thing. Gross, operating, and net margins show how much of sales become profit, while net income, operating cash flow, capital expenditure, and free cash flow show whether that profit is turning into cash after spending on the business. For background on the company, see Ingersoll Rand Inc. (IR): History, Ownership, Mission, How It Works & Makes Money.
| Measure | Latest Period | Previous Period | Verified Driver | Investor Meaning |
|---|---|---|---|---|
| Gross Margin | Unavailable in supplied data; Q1 2026 gross profit was $79240M. | Unavailable in supplied data. | Gross margin was not separately provided, so pricing, mix, and input-cost effects cannot be verified here. | The supplied data does not let investors judge product economics from gross margin alone. |
| Operating Margin | Unavailable in supplied data; Q1 2026 operating income was $28970M. | Unavailable in supplied data. | Q1 2026 adjusted EBITDA was $469M, with IT&S adjusted EBITDA margin at 26.7% and PST adjusted EBITDA margin at 30.3%. | Segment profitability looks healthy, but company-level operating efficiency cannot be fully measured from the supplied data. |
| Net Margin | Unavailable in supplied data. | Unavailable in supplied data. | Interest expense was $6380M; no tax or unusual-item detail was supplied. | Final profitability cannot be fully assessed, but interest burden is one factor to watch. |
| Operating Cash Flow | Unavailable in supplied data. | Unavailable in supplied data. | FY2025 free cash flow conversion of net income was 105%, which supports strong cash generation. | Cash generation appears to track earnings well, but operating cash flow itself was not provided. |
| Free Cash Flow | $163M in Q1 2026 | $223M in Q1 2025 | Quarterly free cash flow stayed positive, but it was lower year over year. | There is still cash for dividends, repurchases, and bolt-on M&A, but the softer quarter should be monitored. |
What most affects Ingersoll Rand's cash conversion?
The strongest verified driver is free cash flow conversion, which reached 105% of net income in FY2025. That points to solid earnings-to-cash conversion, although Q1 2026 free cash flow was lower year over year.
- Main Driver: Strong net income conversion into free cash flow looks structural so far, but the softer Q1 2026 result suggests quarterly volatility.
- Evidence Gap: The supplied data does not break out working-capital changes or capital expenditure.
- Metric to Monitor: Watch free cash flow and conversion of net income in the next quarter.
Liquidity Cushion
How strong is Ingersoll Rand Inc. debt and liquidity?
Strong. Ingersoll Rand Inc. has a large liquidity buffer and very low total debt, with the main protection coming from $39B of total liquidity and $127B of cash. The main financing concern is keeping that cushion aligned with investment needs and operating cash flow.
Cash alone does not tell the full story. Investors should weigh working capital, asset quality, debt service, solvency, liquidity, and refinancing together, because a strong cash balance can still sit beside short-term obligations, heavy intangibles, or leverage that limits flexibility. The link between balance-sheet strength and investor sentiment is also why deeper research like an Exploring Ingersoll Rand Inc. (IR) Investor Profile: Who's Buying and Why? review can be useful.
| Area | Latest Evidence | Assessment | Investor Meaning |
|---|---|---|---|
| Cash and Working Capital | Cash And Cash Equivalents $127B, Total Current Assets $429B, Total Current Liabilities $193B, total liquidity $39B at Q1 2026. | Strong | Near-term obligations look covered without obvious pressure on investment. |
| Total and Net Debt | Total Debt $140M and Net Debt -$127B at 2026-03-31. | Strong | Leverage is extremely light and gives Ingersoll Rand Inc. flexibility. |
| Debt Service and Refinancing | Company-reported net debt to adjusted EBITDA leverage was 1.7x; total liquidity was $39B. | Strong | Refinancing pressure appears manageable if operating results stay stable. |
| Asset Quality | Total Assets $1822B, goodwill and intangible assets of $1261B, and Total Stockholders Equity $1018B. | Mixed | Asset-heavy accounts matter for valuation and for how much book value can absorb shocks. |
| Liabilities and Equity | Total Liabilities $798B against Total Stockholders Equity $1018B at 2026-03-31. | Strong | The capital base is larger than liabilities, which supports obligation coverage. |
What balance-sheet risk matters most for Ingersoll Rand Inc.?
Asset quality is the main watch item, because goodwill and intangible assets of $1261B are large relative to the balance sheet and deserve monitoring alongside leverage and liquidity.
- Current Exposure: Cash And Cash Equivalents $127B and Total Current Liabilities $193B at 2026-03-31.
- Protection: Total liquidity of $39B plus a company-reported net debt to adjusted EBITDA leverage of 1.7x.
- Warning Signal: Watch for liquidity falling faster than investment needs or leverage moving higher from current levels.
Capital Efficiency
Is Ingersoll Rand allocating capital in a disciplined way?
Ingersoll Rand looks Mixed. Shareholder returns and bolt-on acquisitions show active capital use, but internal cash alone is not clearly enough to judge all reinvestment needs from the supplied data, so discipline looks present but not fully provable here.
Return analysis should be read alongside leverage, asset intensity, capital expenditure, working capital, and any external funding needs. Ingersoll Rand’s recent capital choices suggest a balance between payouts, buybacks, and acquisitions. For mission context, see Mission Statement, Vision, & Core Values (2026) of Ingersoll Rand Inc. (IR).
| Capital Measure | Latest Evidence | Quality Test | Investor Meaning |
|---|---|---|---|
| ROIC | Unavailable in the supplied data. | Cannot confirm from the provided figures whether operating margins and capital efficiency support ROIC. | Investors cannot verify from this block alone whether invested capital is consistently creating operating value. |
| ROE and ROA | Unavailable in the supplied data. | Leverage and asset-intensity effects cannot be tested without reported ROE or ROA. | Shareholder return quality and asset efficiency remain unproven from the supplied numbers alone. |
| Maintenance and Growth Investment | FY2025 value returned to shareholders was $105B through share repurchases and dividends. Q1 2026 share repurchases were $89M and the quarterly dividend payment was $8M. Management reported 16 transactions in 2025, deploying $525M for approximately $275M in annualized inorganic revenue. In January 2026, Scinomix Inc. was acquired for $467M; Fox srl also expanded PST metering and dosing pump capabilities. | Buybacks and dividends support direct returns, while acquisitions and capability expansion point to growth spending. The mix favors higher-value markets such as Life Sciences, Pharma, and Water. | Capital appears directed toward sustaining returns and expanding into more resilient, higher-margin areas, which fits a disciplined BCG-style capital shift. |
| Internal Funding Capacity | Supplied data show ongoing buybacks, dividends, and acquisitions, but do not provide operating cash flow, free cash flow, cash balances, or debt. | Investment appears partly internally funded, but outside capital reliance cannot be ruled out from the provided information. | Shareholder returns look active, but flexibility and dilution risk depend on the cash flow and balance sheet details not given here. |
Are Ingersoll Rand's returns on capital sustainable?
Probably yes, if margin improvement and acquisition discipline hold. The strongest durability source is the move into Life Sciences, Pharma, and Water, while heavier deal spending or weaker cash generation would pressure returns.
- Operating Source: Higher-margin mix from Life Sciences, Pharma, and Water supports resilience.
- Funding Requirement: The largest verified capital need is acquisition spending, including $467M for Scinomix Inc. and $525M across 2025 transactions.
- Durability Test: Returns weaken if deal spending outpaces cash generation or if buybacks and dividends crowd out growth capital.
Balance Sheet Resilience
How resilient is Ingersoll Rand, and which warning signs matter most?
Resilience is Mixed. The main buffer is $3.9B total liquidity plus growing recurring revenue. The most important verified warning sign is 19% organic order decline in Q1 2026, which shows demand and project timing pressure.
Ingersoll Rand still has room to fund operations and essential investment, but resilience is being tested by slower organic order growth, delayed long-cycle project orders, and execution risk from tariffs and supply chain disruption. The company can absorb some pressure, yet weaker orders would quickly reduce operating leverage, cash generation, and debt flexibility. For a broader investor angle, see Exploring Ingersoll Rand Inc. (IR) Investor Profile: Who's Buying and Why?
| Pressure | Financial Effect | Existing Protection | Warning Signal |
|---|---|---|---|
| Revenue or Margin Pressure | Organic order growth down 19% in Q1 2026 can weaken operating leverage, earnings, cash flow, and debt capacity if it persists. | Recurring revenue is projected to exceed 40% of total revenue by end-2025, which helps stabilize demand. | Watch for continued organic order declines, weaker margins, or lower cash flow. |
| Working-Capital or Investment Pressure | About $40M of delayed long-cycle project orders from Middle East geopolitical tensions can defer revenue and cash conversion. | $3.9B total liquidity and $1.3B cash on hand support working capital and investment needs. | Watch for slower operating cash flow, rising inventory or receivables, or more project delays. |
| Interest or Refinancing Pressure | Higher rates or weaker earnings would tighten interest coverage, free cash flow, and financing flexibility, especially with 1.7x net debt to adjusted EBITDA leverage. | Liquidity is strong, which helps offset near-term funding pressure and reduces refinancing strain. | Watch for rising leverage, weaker coverage, or any sign of liquidity drawdown. |
Which financial warning signs should investors monitor at Ingersoll Rand?
The top signals are organic order trends, project delay recovery, and margin execution. The 19% organic order decline and the $40M delayed orders are confirmed deterioration risks; tariff and synergy slippage are more forward-looking pressures.
Organic orders slipping further
The 19% Q1 2026 organic order decline is the clearest demand warning. It matters because weaker orders usually hit revenue, margins, and cash flow later. Monitor organic order growth and backlog conversion next.
Project delays from geopolitics
About $40M of delayed long-cycle project orders from Middle East tensions can push revenue out. The company has liquidity to wait, but prolonged delays would hurt cash timing. Watch project bookings and backlog.
Margin execution under external pressure
Dynamic global tariffs, supply chain disruption, and acquisition synergies create execution risk. This is not yet a confirmed financial hit, but it could squeeze margins. Monitor gross margin and integration progress.
Financial Health Scorecard
What does Ingersoll Rand financial health mean for investors?
Ingersoll Rand looks strong overall, with liquidity and cash generation as the best support and organic order quality as the main weakness. The key investment condition is whether recurring demand and free cash flow stay solid enough to offset slower long-cycle order visibility. For background, see Ingersoll Rand Inc. (IR): History, Ownership, Mission, How It Works & Makes Money.
| Financial Factor | Rating | Evidence and Investor Meaning |
|---|---|---|
| Revenue and Earnings Quality | Strong | FY2025 revenue was $765B, up 6%, and Q1 2026 revenue was $185B, up 8%. The top line is growing, but order quality still matters. |
| Profitability and Cash | Strong | FY2025 free cash flow was $122B with 105% conversion of net income, and Q1 2026 adjusted EBITDA was $469M. That supports earnings quality and cash flexibility. |
| Balance Sheet and Liquidity | Strong | Total liquidity was $39B, including $13B cash on hand, with 1.7x net debt to adjusted EBITDA leverage. That gives Ingersoll Rand room to absorb shocks. |
| Capital Efficiency | Mixed | Capital is split across $105B FY2025 shareholder returns, $89M Q1 2026 repurchases, dividends, and bolt-on M&A, but acquisition execution still has to prove itself. |
| Financial Resilience | Mixed | Recurring revenue and liquidity help, but organic order growth down 19% and delayed long-cycle orders pressure visibility and make near-term demand harder to read. |
- What Supports the Thesis: Strong cash generation, high liquidity, and manageable leverage give Ingersoll Rand a durable financial buffer.
- What Challenges the Thesis: Organic order softness and delayed long-cycle demand create uncertainty around future revenue quality.
- What to Monitor: organic order growth, free cash flow, net debt to adjusted EBITDA
That mix makes forecasts and scenarios especially important, because valuation will depend on how quickly order quality and cash conversion hold up under different demand paths.
FAQ
What Do Investors Ask About 's Financial Health?
Investors most often ask about the company's revenue quality, profitability, cash generation, debt, liquidity, capital efficiency, and ability to withstand financial pressure.
What does 17x net debt to EBITDA mean?
It means company-reported net debt equals 17x adjusted EBITDA For Ingersoll Rand, that points to moderate leverage when viewed with Q1 2026 total liquidity of $39B, including $13B cash on hand
How does aftermarket revenue support cash flow?
Aftermarket services and parts are recurring because they come from the installed equipment base Ingersoll Rand projects this recurring revenue to exceed 40% of total revenue by end-2025, which can improve visibility and resilience versus one-time equipment orders
Why do acquisitions matter for funding capacity?
Acquisitions use capital that could otherwise fund debt reduction, repurchases, dividends, or internal investment Ingersoll Rand completed 16 transactions in 2025 and deployed $525M, so investors should track integration, synergy delivery, and free cash flow after deals
What signals weaker Ingersoll Rand order quality?
The clearest signal is organic orders lagging reported orders In Q1 2026, organic order growth was down 19%, while reported growth remained positive, showing acquisitions or other reported factors were stronger than underlying organic demand
Are dividends and buybacks internally supported?
Current evidence suggests support from cash generation, but monitoring is still needed In FY2025, Ingersoll Rand generated $122B of free cash flow and returned $105B to shareholders through repurchases and dividends