# Ingersoll Rand Inc. (IR) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/IR/thesis · /stocks/IR/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: IR
step: "04"
title: Financial Snapshot — 3-Year P&L Summary
created: 2026-05-29
---

### Step 04 — Financial Snapshot

#### 3-Year Income Statement Summary

| Metric | FY2022 | FY2023 | FY2024E |
|--------|--------|--------|---------|
| **Revenue** | $5,931M | $6,562M | $7,170M |
| **Gross Profit** | $2,423M | $2,757M | $3,080M |
| **Gross Margin** | 40.8% | 42.0% | 43.0% |
| **Adj. EBITDA** | $1,319M | $1,548M | $1,760M |
| **Adj. EBITDA Margin** | 22.2% | 23.6% | 24.6% |
| **EBIT (Reported)** | $617M | $813M | $950M |
| **EBIT Margin** | 10.4% | 12.4% | 13.2% |
| **Net Income (Reported)** | $375M | $589M | $680M |
| **Diluted EPS (Reported)** | $0.93 | $1.46 | $1.68 |
| **Adj. EPS** | $2.23 | $2.72 | $3.09 |
| **D&A** | ~$570M | ~$560M | ~$550M |
| **Interest Expense** | ~$255M | ~$240M | ~$225M |

Note: "Adjusted" figures exclude purchase accounting amortization (~$250-280M/year), restructuring charges, M&A transaction costs, and other non-recurring items. The large D&A relative to EBIT reflects substantial intangible amortization from the Gardner Denver + Ingersoll-Rand Industrial merger and subsequent acquisitions.

#### Margin Bridge Analysis

**Gross Margin Expansion** (40.8% → 43.0%): Driven by:
1. Pricing actions (3-5% annually) outpacing material cost inflation
2. Mix shift toward aftermarket/service (higher margin) and PST specialty products
3. IRX lean manufacturing driving COGS reduction
4. Supply chain normalization post-COVID (freight, semiconductors, steel)

**EBITDA Margin Expansion** (22.2% → 24.6%): Driven by:
1. Gross margin flow-through
2. SG&A leverage on higher revenue base
3. IRX-driven operating efficiency in acquired businesses
4. Partially offset by continued integration investments

**Target EBITDA Margin**: Management has guided to ~28-30% Adj. EBITDA margin by FY2027, implying continued 150-200 bps of annual margin expansion — ambitious but supported by ITS operational leverage and PST margin normalization post-ILC Dover integration.

#### Key Profitability Metrics

| Metric | FY2022 | FY2023 | FY2024E |
|--------|--------|--------|---------|
| Gross Margin | 40.8% | 42.0% | 43.0% |
| Adj. EBITDA Margin | 22.2% | 23.6% | 24.6% |
| Adjusted Operating Margin | ~17.5% | ~19.2% | ~20.5% |
| Net Income Margin (Reported) | 6.3% | 9.0% | 9.5% |
| Net Income Margin (Adjusted) | ~13% | ~14% | ~15% |
| FCF Conversion (FCF/Adj. Net Income) | ~85-90% | ~90-95% | ~90-95% |

#### GAAP vs. Adjusted Reconciliation Notes

The large gap between GAAP EPS (~$1.68) and Adjusted EPS (~$3.09) in FY2024 primarily reflects:
1. **Purchase Accounting Amortization**: ~$260M annually from intangible assets created by the 2020 merger and subsequent acquisitions. This is non-cash and will decline over time as intangibles are fully amortized.
2. **Restructuring**: ~$40-60M annually as IR integrates acquisitions and optimizes its manufacturing footprint.
3. **M&A Transaction Costs**: Episodic deal costs (~$20-40M annually).

Investors should watch amortization carefully — it is projected to decline ~$20-30M annually through 2028, providing an EPS tailwind even at constant operating performance.

#### Free Cash Flow

| Metric | FY2022 | FY2023 | FY2024E |
|--------|--------|--------|---------|
| Operating Cash Flow | $780M | $1,090M | $1,200M |
| CapEx | ($200M) | ($200M) | ($210M) |
| **Free Cash Flow** | **$580M** | **$890M** | **$990M** |
| FCF Yield (on market cap ~$28B) | 2.1% | 3.2% | 3.5% |

The step-up in FCF from FY2022 to FY2023 partly reflects normalization of working capital after the 2021-2022 supply chain disruption (IR built inventory buffers that were subsequently released). Ongoing FCF generation is expected to be ~$1B+ annually, providing significant capital allocation optionality.

#### Balance Sheet Summary

| Item | FY2022 | FY2023 | FY2024E |
|------|--------|--------|---------|
| Cash & Equivalents | $1,100M | $1,250M | $1,350M |
| Total Debt | $5,500M | $5,100M | $4,800M |
| Net Debt | $4,400M | $3,850M | $3,450M |
| Net Debt / Adj. EBITDA | 3.3x | 2.5x | 2.0x |
| Total Assets | ~$16B | ~$16.5B | ~$17B |

The leverage profile has been declining steadily from the peak post-ILC Dover acquisition (~3.5x in 2021). Management targets ~2.0x net leverage as the steady-state level, which permits continued bolt-on M&A while maintaining investment-grade credit.

#### Valuation Context

At a share price of approximately $70-75 (mid-2025 estimate), IR trades at:
- ~16-18x NTM Adjusted EPS
- ~13-15x NTM Adjusted EBITDA
- ~16-18x NTM FCF

These multiples represent a discount to Atlas Copco (20-25x EV/EBITDA) but a premium to broader U.S. industrials (12-14x EV/EBITDA), reflecting IR's premium-quality business model, compounding M&A strategy, and margin expansion runway.

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/IR/fundamental

## Navigation

- Overview: /stocks/IR
- Financials (this page): /stocks/IR/financials
- Thesis: /stocks/IR/thesis
- Investment Memo: /stocks/IR/memo
- Coverage universe: /stocks