Ingersoll Rand (IR) Q4 2025 Earnings Transcript

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DATE

Friday, February 13, 2026 at 8 a.m. ET

CALL PARTICIPANTS

• Chairman and Chief Executive Officer — Vicente Reynal
• Chief Financial Officer — Vikram U. Kini
• Vice President, Investor Relations — Matthew Fort

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TAKEAWAYS

• Orders -- Total orders increased 8% year over year in the fourth quarter, with 1% organic growth, and both Industrial Technologies and Services (ITS) and Precision and Science Technologies (PST) segments delivered low single-digit organic order growth.
• Revenue -- Fourth quarter total revenue rose 10% year over year, with 3% organic revenue growth reflecting positive price and volume contributions.
• Adjusted EBITDA -- Fourth quarter adjusted EBITDA was $580 million, with adjusted EBITDA margin at 27.7%, primarily pressured by tariffs and intentional commercial growth investments.
• Adjusted EPS -- Fourth quarter adjusted earnings per share was $0.96, representing 14% growth year over year; full-year adjusted EPS reached $3.34, up 2% with a tax rate of 22.8%.
• Full-Year Orders and Revenue -- For the year, orders increased 9% (1% organically), revenue grew 6%, and organic revenue was down 1% due to first-half comparables and improvement in trajectory as the year progressed.
• Recurring Revenue -- Recurring revenue surpassed $450 million for 2025, with a backlog of $1.1 billion in contracted future revenue, demonstrating rapid expansion from approximately $200 million two years prior.
• M&A Activity -- $525 million was invested across 16 deals in 2025, generating approximately $275 million in annualized inorganic revenue, with a 9 times presynergy multiple average; nine additional transactions under LOI entering 2026, and Synomics acquired in January.
• Segment Performance – ITS -- ITS orders increased 9% in the quarter; full-year book-to-bill above one; revenue up 11% with 3% organic growth; adjusted EBITDA margin 28.9%, impacted by tariffs and commercial investments.
• Segment Performance – PST -- PST fourth quarter orders rose 6%, including mid-teens organic growth in life sciences; full-year organic orders up 2%; revenue increased 8% in the quarter with 4% organic growth; adjusted EBITDA margin improved 280 bps to 30.4%.
• Cash Flow and Balance Sheet -- Fourth quarter cash flow was $462 million; $3.8 billion in liquidity reported; leverage remained below 2 times despite heavy capital deployment.
• 2026 Guidance -- Projected 2026 revenue growth of 2.5%-4.5%, with 1% organic order growth at the midpoint, 1.5% M&A impact, and 1% FX tailwind; adjusted EBITDA expected between $2.13 billion and $2.19 billion; adjusted EPS range of $3.45 to $3.57, or approximately 5% growth at midpoint.
• Margin Guidance and Phasing -- Guidance embeds flat full-year adjusted EBITDA and ITS margins, with margin pressure in the first half due to tariffs but expected improvement in the back half from pricing actions and productivity gains.
• Capital Deployment -- $1 billion in share repurchases and $32 million in dividends executed during 2025; M&A contribution to 2026 guidance reflects only closed or announced deals including Synomics.
• Innovation Highlights -- Introduction of aeration technology enabling up to 34% energy savings in wastewater applications and launch of the EasyJetFlow single-use mixer for biopharma production.

SUMMARY

Management signaled durable order momentum and recurring revenue expansion, using a robust M&A pipeline and technology integration to drive future growth. The company maintained a disciplined capital allocation strategy, executing a blend of transformatively scaled bolt-ons and reinvestment in higher-margin recurring business, while confirming its ability to deliver and support innovative offerings in end markets such as life sciences and energy efficiency. Executives communicated that volume improvement could emerge in the second half. Embedded guidance assumes market trends continue without any inflection, and management consistently stressed prudent planning regarding end-market uncertainty and the timing of tariff impacts.

• Reynal cited, "our team in China now three quarters of delivering positive organic order growth," underlining the success of localized innovation rather than broad market recovery.
• Kini highlighted, "price/cost expect to be a bit more constrained in the first half of the year given the timing of the tariff impact. However, we do expect to be price/cost neutral in the first half."
• PST's life science portfolio was emphasized as benefiting from sequential momentum and accretive bolt-on M&A.
• Management stated, "projects are not getting canceled," regarding long-cycle business, though customer decision timelines remain extended.
• Executives explained, "Free cash flow to adjusted net income conversion will be around 95%," viewing inventory management as an area for potential future improvement.
• Capital deployment guidance reflects only completed or announced acquisitions; potential larger deals in the pipeline were discussed as future optionality but excluded from 2026 estimates.

INDUSTRY GLOSSARY

• IRX: Ingersoll Rand's proprietary continuous improvement and growth operating system focused on process optimization and commercial excellence.
• LOI: Letter of Intent; a non-binding document outlining the intention to pursue a potential acquisition or other transaction.
• Book-to-bill: Ratio of orders received to revenue billed over a defined period, indicating order backlog trends and demand levels.
• Presynergy multiple: Purchase price for an acquisition divided by the target's EBITDA before accounting for expected synergies from integration.
• Aftermarket: Revenue derived from parts, consumables, service, and maintenance contracts following the initial sale of original equipment.
• Recurring revenue: Contracted, often subscription-based, revenue that is generated repeatedly from the same customers over time.
• Marketing qualified lead (MQL): A sales lead expressing interest and deemed likely to convert based on defined criteria, tracked as a forward-looking commercial activity indicator.

Full Conference Call Transcript

Operator: Hello, and welcome to the Ingersoll Rand Inc. Fourth Quarter 2025 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. I would now like to turn the conference over to Matthew Fort, Vice President, Investor Relations. You may begin.

Matthew Fort: Thank you, and welcome to the Ingersoll Rand Inc. 2025 Fourth Quarter Earnings Call. I'm Matthew Fort, Vice President of Investor Relations. And joining me this morning are Vicente Reynal, Chairman and CEO, and Vikram U. Kini, Chief Financial Officer. We issued our earnings release and presentation yesterday afternoon, and we will reference these during the call. Both are available on the Investor Relations section of our website. In addition, a replay of this conference call will be available later today.

Before we start, I want to remind everyone that certain statements on this call are forward-looking in nature and are subject to the risks and uncertainties discussed in our previous SEC filings, which you should read in conjunction with the information provided on this call. Please review the forward-looking statements on slide two for more details. In addition, in today's remarks, we will refer to certain non-GAAP financial measures. You can find a reconciliation of these measures to the most comparable measure calculated and presented in accordance with GAAP in our slide presentation and in our earnings release, both of which are available on the Investor Relations section of our website.

On today's call, we will review our company and segment financial highlights and provide our full-year 2026 guidance. For today's Q&A session, we ask that each caller keep to one question and one follow-up to allow time for other participants. At this time, I will turn the call over to Vicente. Thanks, Matthew, and good morning to all. Beginning on slide three, we ended the year on a strong note, delivering low single-digit organic order growth for both the fourth quarter and the full year. Additionally, our return to organic revenue growth reflects positive momentum heading into 2026. We're also very pleased with the momentum we continue to see on our recurring revenue initiative.

Vicente Reynal: Which exceeded $450 million in 2025, with a backlog of recurring revenue of approximately $1.1 billion in future revenue from existing contracts. This is a clear demonstration of how we continue to make great progress towards achieving our recurring revenue target. Turning to inorganic growth, our disciplined approach to M&A continues to be a key driver of our success. Our acquisition pipeline remains robust, with a strategic focus on enhancing our existing portfolio. Finally, our teams remain nimble through the use of IRX and continue to leverage our economic growth engine to outperform in the markets in which we serve. On slide four, our inorganic growth flywheel remains robust, underpinned by strong pipeline and disciplined deal execution.

The value creation flywheel remains the core engine of performance, delivering durable free cash flow and enabling consistent high-return capital deployment. In 2025, we demonstrated both efficiency and precision in our execution, investing $525 million across 16 transactions, which collectively generated approximately $275 million in annualized inorganic revenue. These high-return acquisitions average a 9 times presynergy multiple and expanded our technological capabilities, demonstrating that our M&A engine continues to help us drive above-market growth. And we're off to a great start heading into 2026, with nine additional transactions currently under LOI.

In January, we completed our first acquisition of 2026 with Synomics, a leading manufacturer specializing in technologies that optimize workflow solutions to improve throughput, accuracy, and suitability across multiple life science and markets. The dynamic acquisition advances our life science strategy by combining complementary technologies to deliver high-value end-to-end laboratory solutions. Now I will hand it over to Vikram U. Kini who will share an update on our financial performance for Q4 and the full year.

Vikram U. Kini: Thanks, Vicente. Starting on slide five, orders showed continued strength in the fourth quarter, up 8% year over year, or up 1% organically, with both our ITS and PST segments delivering low single-digit organic order growth. Consistent with normal seasonality, fourth quarter book-to-bill finished at 0.93 turns. As Vicente mentioned earlier on the call, we finished the year strong with revenue up 10%. Organic revenue grew 3% year over year, which included both positive price and volume. We delivered fourth quarter adjusted EBITDA of $580 million and adjusted EBITDA margins remained strong at 27.7%, reflecting the durability of our operating model with year-over-year margin pressure primarily driven by tariff impacts and intentional commercial investments for growth.

Corporate costs were $31 million, our Q4 adjusted tax rate was 21.2%, and adjusted earnings per share was $0.96 for the quarter, up 14% year over year. Moving to the full year results on slide six. Orders were up 9% year over year, or up 1% organically. Heading to 2026, we are well positioned, finishing 2025 with a book-to-bill above one and both the ITS and PSC segments delivering low single-digit organic order growth for the full year. Total revenue was up 6% year over year, while organic revenue finished the year down 1% due in large part to tough first-half comps, with a clear improvement in trajectory as the year progressed and positive momentum exiting 2025.

For the full year, our results exceeded the upper end of our prior guidance range for both adjusted EBITDA and adjusted earnings per share. The company delivered adjusted EBITDA of approximately $2.1 billion, an adjusted EBITDA margin of 27.4%. And adjusted earnings per share for the year was $3.34, up 2% year over year, including a full-year adjusted tax rate of 22.8%. On the next slide, cash flow for the fourth quarter was $462 million. With $3.8 billion in total liquidity, our balance sheet remains a strategic asset, enabling continued investment in high-return opportunities.

Leverage continues to be well under two times even as we continue to strongly deploy capital in 2025, including $525 million in M&A, $1 billion in share repurchases, and $32 million in dividends. This performance reinforces our ability to effectively deploy capital while maintaining top-tier balance sheet flexibility. Now I'll hand the call over to Vicente, who will go over our segment results.

Vicente Reynal: Thanks, Vikram. On slide eight, ITS orders finished up 9% in the fourth quarter. Book-to-bill for the quarter was 0.93 and finished above one for the full year. The segment delivered organic orders growth in the low single digits, making all four quarters of positive organic order growth in 2025. All three regions, Americas, EMEA, and Asia Pacific, saw positive organic order growth for the full year. Revenue grew 11% year over year, including organic revenue growth of 3%. Adjusted EBITDA margins finished at 28.9%, which was down year over year, largely driven by the dilutive impact of tariffs and continued commercial investments for growth.

For more detailed breakdown, organic orders at a regional level for Q4, Americas was up low single digits, EMEA was down mid single digits, and Asia Pacific was up low double digits, driven by China up low single digits and the rest of Asia up mid twenties. Compressor organic order trends were in line with the regional trends just mentioned for Americas, EMEA, and China. This marks the third quarter in a row where we saw organic quarter growth in China, underscoring our agility through the effective use of IRX and the success of our demand generation activities delivering consistent growth in what remains a very challenging market.

In our innovation in action section, we're pleased to introduce the latest aeration technology for wastewater applications developed by one of our recent acquisitions. This advanced technology has been integrated with one of our high-efficiency blowers, allowing us to deliver increased oxygen while reducing power consumption. This combination allows us to achieve up to 34% energy savings, creating a strong return on investment for the customer. This initiative demonstrates our commitment to leveraging both established and new acquired technologies to offer greater energy efficiency to our customers and expand our aftermarket revenue opportunities. Turning to slide nine. Q4 orders in PST were up 6% year over year with a book-to-bill of 0.96.

Organic orders were up 1%, including our life science businesses, which delivered mid-teens organic order growth. For the full year, PST delivered organic order growth of 2%, with a book-to-bill of one time. We're also pleased to highlight that both our technologies and life science technologies businesses saw positive organic order growth for the full year. Additionally, we are encouraged by the acceleration in the organic order momentum as the second half of the year finished up mid single digit. Fourth quarter revenue finished up at 8% year over year, with organic revenue growth of 4%. PST delivered adjusted EBITDA of $127 million, which was up 19% year over year with a margin of 30.4%.

Adjusted EBITDA margin improved 280 basis points year over year, demonstrating continued strong execution against the relatively easy comp from 2024, which is up 40 basis points year over year. For our PST innovation in action, we're showcasing our award-winning EasyJetFlow product from our life science business. EasyJetFlow is a disposable, single-use mixer designed for biopharma production, featuring a sealed transfer system that improves safety by reducing cross-contamination risks and shielding operator from airborne powders. When paired with Easy Biopipe bags, it allows for fast turnaround without the need for cleaning or validation while delivering straightforward operation for quicker powder dissolution compared to competitive alternatives. As we move to slide 10, we're issuing our full-year guidance for 2026.

Total company revenue is expected to grow between 2.5%-4.5%, driven by organic order growth of 1% at the midpoint, 1.5% growth from M&A, which includes a carryover from all transactions completed in 2025, as well as the previously announced Synomics acquisition, and 1% FX tailwind. Total adjusted EBITDA for the company is expected to be in the range of $2,130,000,000 and $2,190,000,000. Corporate costs are planned at $170,000,000 and are expected to be incurred evenly per quarter throughout the year. Adjusted EPS is projected to fall within the range of $3.45 and $3.57, which is approximately 5% growth at the midpoint.

We anticipate our adjusted tax rate to be approximately 23%, net interest expense to be about $230,000,000, and share count to be approximately 394,000,000. Free cash flow to adjusted net income conversion will be around 95%. The phasing of revenue, adjusted EBITDA, and adjusted EPS is expected to be consistent with what we have seen in prior years as outlined in the table. In addition, based on our guidance at the midpoint, we expect EPS to grow at a similar mid single-digit growth rate in both the first and second half of the year.

Finally, on slide 11, as we wrap up this part of the call, I'm confident that our strong finish in 2025 puts us in an excellent position for success in 2026. We maintain agility and readiness to adapt to the ongoing changes in the global market landscape. Our teams have consistently demonstrated resilience and high level of execution, achieving strong results in these very complex environments. We remain disciplined with our approach of capital allocation, leveraging our robust balance sheet to generate durable earnings growth and long-term shareholder value. Finally, I would like to thank our employees for your ongoing dedication and commitment to embracing an ownership mindset.

Thank you for your help in delivering another robust quarter and full year. Now I will hand the call back to the operator and open it for Q&A.

Operator: Thank you. If you would like to withdraw your question, simply press 1 again. As a reminder, we ask that you please limit yourself to one question and one follow-up. Thank you. Your first question comes from Michael Patrick Halloran with Baird. Your line is open.

Vikram U. Kini: Morning.

Vicente Reynal: Start of the and then the guidance

Vikram U. Kini: What sort of end market trajectory is embedded in the guidance? And then the shorter cycle side of your businesses, are you seeing any signs of change? And what would this businesses that you would look at to internally for leading indicators on your side?

Vicente Reynal: Sure, Michael Patrick Halloran. Let me start with the end market commentary first. As it relates to what we are currently seeing in the market, which is the basis of our initial guide here. You know, portfolio continues to demonstrate resiliency as you have seen. I mean, as a reminder, 40% of our revenue is aftermarket, which tends to be very stable. And from a high level, some end market commentary, life sciences is progressing and improving sequentially. As a reminder, we demonstrated order growth with orders in the mid teens during the Q4 performance and kind of to kind of double click on the life sciences more, you know, pharma and biopharma production.

We continue to see very good funnel and booking activity both in the U.S. and outside the U.S. Our medical device business, which is there in region for region, is driving some very good funnel activity. I was actually with the team in China last week, and there is just a lot of good potential to serve our customers in China, for example, on the medical device side. In the lab, analytical diagnostic equipment market, very good pipeline activity, given some of the U.S. reshoring of drug discovery and development and the need for automation to mitigate reshoring cost. Therefore, the acquisition that we made with Synomics, which plays very well in that end market.

On the general industrial side, we have seen more stability, especially in 2025, as we have passed the peak of uncertainty related to tariffs. And that being said, we are cautiously optimistic about the improving trends moving into 2026. You know, a long cycle project perspective, we have not seen any kind of dramatic changes as the funnel remains very healthy. And I think the other important point of note is we are continuing to remain very encouraged about the recurring revenue.

You know, in terms of some of the indicators that you were asking, Michael Patrick Halloran, I mean, PMI for us continues to serve as a good overall gauge for short cycle businesses, and we are optimistic about the uptick we recently saw in the U.S. PMI here in January. However, we think it is too early to call a meaningful inflection as a result of just one data point, which has been down for such a long period of time, and therefore the reason why we took a prudent approach here as we started year 2026.

Vikram U. Kini: Thanks for that. So it sounds like the guidance itself assumes just the current trajectory continues as opposed to some sort of inflection up in any of the pieces? And then related to that, are there any end markets that you are specifically worried about this year? Maybe better put, if you look at the last couple of years where there have been headwinds, do you think those persist into 2026, or are we at the point where we have at least flushed out a lot of the headwinds? I know the China piece has been a headwind from a market perspective, but you have turned to growth.

Any other things there you would point to or areas you would point to?

Vicente Reynal: Yeah. So related to the guidance, exactly as you said, Michael Patrick Halloran. We are not embedding any market recovery here, and very stable sequentially here from what we are seeing today. So that is what we are embedding in the guidance. In terms of the end some of the headwinds, as you very well as we can articulate it, you know, whether, you know, RNG, electric vehicle, photovoltaic, a lot of that is behind us. And I think also the good news here too as well as I mentioned on the early remarks, our team in China now three quarters of delivering positive organic order growth the past three quarters in a row.

Not what the market is doing, but also speaks loudly as what the team is doing. I was with the team in China last week, and it is very impressive, the amount of innovation and technology and new end markets and new solutions that they are launching in order to penetrate the market and see that organic growth. Thanks, Vicente. I appreciate it. Thank you. The next question comes from Julian C.H. Mitchell with Barclays.

Operator: Barclays. Your line is open.

Julian C.H. Mitchell: Hi. Good morning. Just trying to understand the seasonality through the year a little bit better. So is it fair to assume the guidance is based on roughly that one point of organic revenue growth year on year fairly evenly through the year? And then on EPS growth, I think you mentioned mid single digits year on year in both halves. Are you starting out first quarter around that mid single-digit EPS growth as well? Thank you.

Vikram U. Kini: Yeah. Julian C.H. Mitchell, I'll take that one here. So as far as the organic growth comment, first and foremost, starting with Q1, we expect Q1 organic to be, I would say, flat to maybe very slightly down. But then as we move through the balance of the year, we expect I would call it comparable low single-digit organic growth for Q2, Q3, and Q4. So, you know, as Vicente said here, a bit of normalization perhaps as we get from Q2 to Q4, but no meaningful market recovery, anything like that necessarily baked into the guide. As far as the EPS question, generally, the way you are characterizing it is a fair way to think about it here.

And as we indicated, we expect to see a relatively even earnings growth on a quarterly basis and particularly on the first half versus second half as well.

Julian C.H. Mitchell: That is helpful. Thank you, Vikram U. Kini. And then maybe my follow-up would be on the EBITDA margins. So I think the guidance embeds full-year EBITDA margins are flattish and is the way to think about that maybe a small decline year on year in the first half because of price/cost and then that flips around. And in light of some of the commentary in the last sort of eight hours or so, maybe help us understand kind of the scale of the price/cost headwinds that you have been seeing, whether dollars or margin percent?

Vikram U. Kini: Yeah. Sure. Julian C.H. Mitchell, I'll start. You know, as far as the margin profile and kind of the way you have talked about it, you are completely correct. I think even as we talked about on our last earnings call, we did expect some headwinds on the margin front, particularly in the first half of the year, particularly as we lap kind of some of the annualizing of the tariffs. So that is largely impacting 2026.

And then, clearly, as we move to the second half of the year, we would expect some of the results of what I will call in-year pricing actions, some of the productivity measures as well as some of the controllable, I would say, actions that we have taken internally to drive a better margin profile into the back half of the year. You know, as far as the price/cost piece of the equation, let me just start by saying, one, I think the fourth quarter largely played itself out as expected. Worth noting, though, that I think the team's executed really well, which you saw specifically in that Q4 performance.

And as far as the price/cost equation and things of that nature, kind of going back to my earlier comments. One, we do expect price/cost to be positive for the full year. Now if we take that in terms of the two components, first half and second half, like I said, price/cost expect to be a bit more constrained in the first half of the year given the timing of the tariff impact. However, we do expect to be price/cost neutral in the first half. And then we expect to see that margin expansion take hold in the second half for the factors I kind of earlier described.

Julian C.H. Mitchell: That is great. Thank you.

Operator: Thank you. The next question comes from Jeffrey Todd Sprague with Vertical Research. Your line is open.

Vikram U. Kini: Hey. Thank you. Good morning, everyone. Hey. Just a couple of things. First, just back on the short cycle. We have all seen the PMI. Vicente, I just want to kind of clarify a little bit, though. Are you not seeing any actual pickup in short-cycle pockets, whether it is tools or small compressors or the like, sort of question number one. And then does the guide actually anticipate volumes turning positive by the time we get to the back half of the year? Obviously, you have been running on negative volumes, positive price for what the better part of eight quarters here, I guess.

Vicente Reynal: Yeah. No, Jeffrey Todd Sprague. We are seeing some pickup in the short cycle clearly. I mean, as you saw from the order rates as we delivered here in the fourth quarter, and we see somewhat of the momentum continuing here as we enter 2026 and into January. So the order momentum, I will say, continues. I think what the remark that I made is that PMI just turned above 50 in the U.S. for the first time in 38 months or so in January. And we are just saying, hey. That is only one data point. But we are seeing definitely that better momentum and kind of inflecting point.

We just want to see more data points of kind of continued better market performance.

Vikram U. Kini: Yeah. And, Jeffrey Todd Sprague, in terms of your Oh, go ahead. Yeah. Yeah. Go ahead. Sorry. I was just question on the volume side of the equation. You know, again, the best way I would probably describe this is we do expect volume performance to improve as we think about the second half versus the first half. You know, I think it is probably closer to probably somewhere in the flattish realm if you kind of think about it as we get to the back half of the year and as we exit the year. But, you know, as Vicente said here, we have not baked any, what I will call, meaningful recovery per se in.

And, obviously, as markets continue to hopefully improve, we would expect that to be an area for potential outperformance in the future. We just obviously want to see it materialize first. And just a follow-up on capital deployment, if I could. It is not clear to me you have capital deployment in the guide. The share count number maybe we can get close to that just on the annualization of what you did on the repo. I do see interest expense coming down a little bit, though. I do not know if that is rates or cash generation and debt reduction. Can you just clarify what, if anything, is in the guide from a capital deployment standpoint? Yeah.

Sure, Jeffrey Todd Sprague. I would say the approach is very consistent with what we have historically. So, essentially, I will take the pieces here. One, from the share count perspective, you are just seeing the annualization of the actions already taken in 2025 where we did approximately $1 billion of share repurchase. So you are just seeing that now materialize into the share count piece of the equation. From an M&A perspective, consistent with how we have historically kind of guided, you are seeing the M&A impact is just the carryover of acquisitions completed in 2025 as well as the one deal that we have completed here thus far in 2026, which is the Synomics acquisition that Vicente indicated.

As far as the balance of the equation, whether it be in interest expense or things of that nature, I would say it is fairly consistent with 2025 levels. So everything there is generally as we have historically indicated and guided.

Jeffrey Todd Sprague: Great. Thanks.

Operator: The next comes from Joseph John O'Dea with Wells Fargo. Your line is open.

Vicente Reynal: Hi. Good morning.

Joseph John O'Dea: Can you dig in a little bit on the acquisition opportunity set when you talk about 400, 500 bps of annualized revenue expected to be acquired in 2026. Just in terms of the composition of the pipeline right now. Sounds like primarily in the bolt-on side of things. But anything that could be in the larger side as well. You know, what that would mean, what your appetite is for anything in that kind of larger category.

Vicente Reynal: Sure. So the opportunity in the funnel remains really strong. You know, already executed one acquisition with Synomics. And currently have nine companies under LOI. I will characterize the pipeline still as being bolt-on in nature. But there is definitely a couple that we have been cultivating for quite some time that could be on the larger purchase price or maybe a $1,000,000,000 or so. But again, the current pipeline is bolt-on in nature today. But we are definitely seeing a lot of good activity and particularly on what I just referred to. I mean, the cultivation process continues to remain very strong, and we are seeing better movement here too as well.

Joseph John O'Dea: And then on the recurring revenue side, I think this has gone from $200,000,000 a couple years ago to $300,000,000. It is now over $450,000,000. Just a little bit of color around what is kind of driving some of the traction there, where you are most pleased, and then how you think about the opportunity in 2026? And sort of where that could get to?

Vicente Reynal: Yes. Absolutely. I mean, we are very excited about some of milestones that we achieved here in 2025. Not only the $450,000,000 of revenue, which as you very well said, a couple years ago was approximately $200,000,000, but the fact that we now have approximately $1.1 billion in future revenue from existing contracts in what we call in the backlog or in the bank. So that gives us good confidence here as we can continue the ramp. We always said that will not be linear and will require continued ramp to achieve our long-term investor day target. And we will provide update to that on our next investor day.

But I think we are seeing the good resiliency from the team, not only as we expand into some of the regions, but as we expand the recurring revenue into many other technologies. But we are pleased with the performance so far, and the teams are working very hard to continue to accelerate.

Joseph John O'Dea: Thank you.

Operator: The next question comes from Nigel Edward Coe with Wolfe Research. Your line is open. Thanks. Good morning, everyone.

Julian C.H. Mitchell: I hope it was well. Lots of details so far.

Vikram U. Kini: Nigel Edward Coe, I just wanted to go back to your comments on 1Q being flat to maybe slightly down relative to the, call it, 3% organic posted in 4Q. So that would imply a pretty significant kind of Q over Q deceleration. So just wondering, are there any timing of shipments that benefited 4Q that informs that view? And then just maybe if we could just dimensionalize the price and investment spending that you are highlighting and any sense on how we should think about ITS margins again, the first half versus the second half?

Vikram U. Kini: Yeah. Sure, Nigel Edward Coe. Let me take the first one. So as far as I would say the revenue from Q4 to Q1, remember, I would characterize what you are seeing really as normal seasonality. You know, if you look at typically speaking in any cadence of the year, you typically have Q4 as typically our strongest quarter of the year, typically characterized by a lot of the shipments in some of our longer cycle project businesses. You know, that business typically has a little bit more of a stronger orders profile in the first half of the year, a little stronger shipment profile in the back half of the year. 2025 was very much in line with that.

So I think what you are referring to here as far as kind of the sequential move between Q4 and Q1, very standard. And in fact, I would say the revenue and earnings seasonality that is baked into our 2026 guide is almost, you know, it is actually exactly what you saw in prior years. So, again, I would characterize that as standard and nothing atypical compared to what you have seen in prior years. You know, as far as the price/cost and really more so the investments, you know, obviously, we have not necessarily quantified the exact number here for you.

But what I would characterize it as is a couple of kind of moving factors, and we can also talk about kind of the ITS margin profile as well. You know, I think in terms of the investments, it is the same continued, I would say, commercial investments that you have seen us talk about historically. So whether that be at the corporate level, things around centralized demand generation, things of that nature, some of the kind of normal course investments for growth, as well as within the actual business, really much more front-end commercial, engineering and NPD-related innovation, if I will say, commercial-related investment. So again, I would say that is a continued trend and theme.

You have seen us be very consistent with that in 2025 as well. I think 2026 is much more of a, I will call it, continuation in that respect. As far as the margin question, I think you asked about ITS. Yeah. I think the best way to kind of describe it here is our expectation for ITS margins is that on a total-year basis, we do expect to be relatively flattish year over year on a full-year basis. That is largely driven, I would say, by the two factors that we have mentioned here. The tariff-related expenses, really the carryover there.

We are offsetting with price, but, obviously, that is still kind of dilutive from a margin perspective, as well as the, I would say, continued targeted commercial investment for growth.

Vicente Reynal: PST,

Vikram U. Kini: we do expect to be up, you know, triple-digit margin expansion, in the sense, really, frankly, strong operational execution. I would say the continued integration and execution on some of the acquired assets and then what I would say is probably slightly easier comps, particularly in the first half of the year, comparatively to the rest of the business. And then we obviously highlighted kind of corporate costs at a total company level, which we expect to be roughly even per quarter through the course of 2026.

Nigel Edward Coe: Vikram U. Kini, that was great color. And just a quick one on the PST orders. Obviously, momentum in life sciences. I think you said up mid teens. But that implies there was a significant decline in other business units. Wondering if you could just touch on that quickly.

Vicente Reynal: Yeah. Sure. So, I mean, basically, very happy and excited with what we are seeing on the life sciences side. You know, the precision technology also delivered fairly nice, which is about 60% of the total segment. And that business is performing in line with what you have seen in the ITS. So the last piece is basically the aerospace and defense business, which is down due to order timing. Nothing unexpected as the business is generally moving sideways from 2025 to 2026. But that was basically kind of the offset in the segment.

Nigel Edward Coe: Oh, got it. Okay. Thanks, Vicente.

Vicente Reynal: Yeah. Thank you.

Operator: The next question comes from Nicole Sheree DeBlase with Deutsche Bank. Your line is open. Yeah. Thanks. Good morning, guys.

Vicente Reynal: Good morning.

Operator: Can we just start with when you look at the full-year guidance for organic flat to up 2%, are you looking for something similar magnitude in both PST and ITS?

Vikram U. Kini: Sure, Nicole Sheree DeBlase. I'll take that one. Yeah. I think the simple answer is it is comparable. Right? I think in terms of the overall, I would say we expect a slightly healthier overall full year from PST as compared to ITS. Obviously, that kind of blends to the midpoint, if you will, of what you see as far as the overall guide. But yes, I think relatively comparable trajectory. I think about the sequential movement from Q1 into the back half of the year.

Operator: Okay. Understood. Thanks, Vikram U. Kini. And then can we just dig a little bit more into what you are seeing from a longer cycle project perspective? Vicente, you had talked about for several quarters in 2025, like delays in decision-making activity or decision-making process from your customers. How did that kind of go in the fourth quarter and into the early part of 2026? Thank you.

Vicente Reynal: Yeah. I mean, I will say that the positive side is that the long cycle project funnel continues to be very, very active. We saw even some resurgence of adding more into the funnel as we were kind of gravitating here at the end of the year and a very good start here into the beginning of 2026. In terms of the delays in decision-making and kind of what we call about the elongation, that kind of continues to still be there. But the good news is that projects are not getting canceled. And we continue to see some good momentum.

So, again, it continues to build upon basically seeing that the funnel continues to grow, which bodes well for us as we come here into 2026 from an order perspective.

Operator: Thanks, Vicente. I'll pass it on. The next question comes from Nathan Hardie Jones with Stifel. Your line is open.

Vicente Reynal: Good morning, everyone. Good morning, Nathan Hardie Jones.

Vikram U. Kini: Guess I will just start off with question on the EBITDA guidance. I mean, it is pretty clear you are not planning on much in the way of volume growth. You get a little bit of addition to EBITDA from M&A. It does not seem to really embed any cost actions or any product in the guide, can you talk about any you have there for cost out or for productivity gains during 2026?

Vicente Reynal: Yeah. Sure. That is an

Vikram U. Kini: start with that one here. So, you know, I think the guide does include some requisite, I would say, productivity or cost actions. Let me kind of take those in pieces here. So clearly, I would say the headwind from a margin perspective, kind of earlier stated, is really the kind of the carryover of the tariffs. Right? So even though there are pricing actions that are offsetting on a full-year basis, that still is a little bit of a headwind from a margin perspective. Despite that, you are still seeing that we are growing earnings per share in a requisite comparable manner, quarterly or first half, second half.

You know, the driver of that or the kind of the offset tends to come from some of those cost actions. So, first and foremost, you have seen in our financials here that we have taken some proactive restructuring actions in 2025. Those will continue to materialize into savings into 2026. I would say payback periods on those actions are very much in line with what you have seen us do historically. So that clearly is, I would say, kind of the first item. The second one is what I would call the kind of normal course productivity. So that would be, you know, direct material as well as kind of I2V.

Remember, those tend to follow, I would say, the phasing of revenue very similarly to what you have seen in prior years. So those do tend to have a little bit more of a second-half weighting, but that is just because they follow kind of the shipments. And then the other piece, you know, Nathan Hardie Jones, would be that we are, you know, obviously taking, I would say, some targeted pricing actions in the course of the year like we typically do.

Those will obviously be taken, you know, business by business, region by region through the course of year, and you will start to see some of that materialize in the revenue base, particularly as moving to the second half of the year. So I would say those are kind of the moving factors here that are, I would say, offsetting both some of the tariff-related headwinds, some of the, I would say, reinvestments that you are seeing from a commercial growth perspective, as well as some of the increased corporate costs on a year-over-year basis. For that.

And then I guess in terms of forward-looking indicators, you talked about PMI marketing, you know, good reading in January in the U.S., obviously. You guys just have over the last few years talked about marketing qualified leads as an indicator for your own business. Can you talk about what that is telling you in various regions and whether that is giving you any more confidence in the order rates in the short term here. Thanks for taking the questions.

Vicente Reynal: Yeah. Sure, Nathan Hardie Jones. So absolutely. I mean, I think our marketing qualified leads is part of core of what we track ourselves internally by region, by product line, even by end market. Continue to see some fairly good momentum on how the marketing qualified leads continue to grow. Now a lot of that is because of, obviously, our kind of self-help engine on how we reach new customer accounts, so roughly half of those marketing qualified leads are coming in from new customer accounts as we try to obviously continue to take share. So that is why we are seeing some good acceleration in terms of MQL continue to be strong.

But as I said before, decision-making is kind of this elongation. But, again, all indicators, PMIs, and MQLs, looking to be on the proper trend as we see. Sit here.

Jeffrey Todd Sprague: The next question

Operator: comes from Christopher M. Snyder with Morgan Stanley. Your line is open.

Joseph John O'Dea: Thank you. When we look at the pickup in

Christopher M. Snyder: Q4 organic growth, was this more so driven by momentum in the short-cycle businesses? Or did some of the longer cycle orders in the backlog begin to convert? And I ask because I noticed that this was the first quarter since 2024 where organic sales outpaced orders. So maybe it is signaling some level of backlog release. And I am just wondering if could that remain a tailwind for the business into 2026? Thank you.

Vikram U. Kini: Yeah. Christopher M. Snyder, great question. So, you know, I would start with, first and foremost, the Q4 performance we saw, I would say, had a requisite component of both what I would say the base business or short cycle inclusive of aftermarket and recurring revenue as well as the long cycle. I go back to my earlier comment that the second half of the year, particularly Q4, tends to be a heavier shipment quarter, particularly on the long-cycle project side of the equation. Q4 2025 was no exception to that. So I think that probably speaks to the drivers of that 3% organic kind of pickup that you saw.

And then as far as the organic orders versus organic sales, probably the simplest way I would probably describe that is the book-to-bill, first of all from a full-year perspective, slightly over one. So one, we are encouraged by the fact that you have seen some backlog build, which I think also provides some of that increased visibility, but also just some of that backlog that we can execute as we move into 2026. I think as far as the absolute book-to-bill in Q4, slightly below one, again I will call it very standard, just again because of the long-cycle nature and dynamics of the shipments we see.

So again, I think to your point, encouraged by what we saw in Q4. And, you know, clearly, we continue to kind of watch leading indicators and see that hopefully continue here as we move into 2026. But encouraged by the contribution of both

Christopher M. Snyder: Thank you. I appreciate that. And then maybe just to follow-up.

Vikram U. Kini: short cycle and the project side in Q4.

Christopher M. Snyder: Could you provide some color on what is expected for the life science organic growth in 2026 within the guide. And it seems like obviously still really good momentum there with the Q4 order rates up mid teens. But anything to call out on the slope of organic growth. Because I do imagine that the comps into 2026 are getting a good deal more difficult than they were in 2025 on the organic growth side. Thank you.

Vikram U. Kini: Yeah. Sure, Christopher M. Snyder. As far as the guide, we are not going to kind of break the PST component into the different components. But what we can say here is I think the way you have described it is exactly the way we are thinking about it. One, definitely encouraged and Vicente kind of provided a little bit of color on kind of the drivers we are seeing at the kind of differing components of the life sciences business.

So I think we are incredibly encouraged by what we are seeing, whether it be on really in the biopharma side or even kind of the legacy kind of Ingersoll Rand Inc. medical business we have had in terms of some of the improving trends. You know, clearly, you know, we talked about the aerospace piece, which is really kind of moving sideways from 2025 to 2026, which is kind of a little bit of that, I would call, more of the offset comparatively speaking as it is kind of just part of that overall umbrella of businesses. So I think the simple answer here is I think we continue to be really encouraged.

The other piece I would mention here is the fact that the bolt-on M&A kind of playbook is really taking root as well in our life sciences portfolio. You see a number of bolt-ons in 2025 that will obviously become organic here at parts during the course of 2026, which we think will continue to contribute. And then the Synomics acquisition that we just did here in January, which we think is a very attractive kind of nice additive complementary bolt-on to our existing kind of life science portfolio. So, again, I think your point is very valid.

I think the comps clearly are there, but I think we are still encouraged by the momentum we are seeing, which you saw in the Q4 order rate.

Jeffrey Todd Sprague: The next question comes from

Operator: Stephen Volkmann with Jefferies. Your line is open.

Christopher M. Snyder: Hi. Good morning, guys. Happy Friday. Just a couple very quick ones for me. I am curious. It seems like valuations are kind of going up across the board, not just yours, but I am presuming in the M&A funnel as well. Just does that change anything in terms of how you manage your capital deployment?

Jeffrey Todd Sprague: No.

Vicente Reynal: No, Stephen Volkmann. I mean, we continue to actually, as you have seen, do really well with the presynergy multiple. In 2025, we average roughly 9.2 times, to be exact, the presynergy multiple. Even the one that we acquired here in January continues to be in that kind of range. So I think we are continuing to be very encouraged with what we are seeing now. But in our case, as you know, our M&A flywheel is differentiated in the sense that a lot of these transactions are sole source. Cultivation happens. Family-owned companies.

So I think we have a bit of an advantage here for us to be able to continue with that and be able to have a very good price multiple.

Stephen Volkmann: Got it. Thank you. And then just with respect to kind of the order cadence, is there anything that you can see now that would make that different in 2026 relative to kind of the last couple of years?

Vikram U. Kini: Yeah. Sure, Stephen Volkmann. So we obviously do not guide on orders, but I think the simple way to think about it here is we do not expect anything here to be dramatically different in terms of, I will just say, the book-to-bill being one on a full-year basis and typically a little bit healthier than that in the first half and a little below on the second half just given normal seasonality and some of the dynamics I mentioned on our long cycle. So nothing at this point we would point to that we expect to be dramatically different.

Stephen Volkmann: Super. Thank you, guys.

Jeffrey Todd Sprague: Thank you.

Operator: The next question comes from Joseph Alfred Ritchie with Goldman Sachs.

Vikram U. Kini: Thanks. Good morning, guys.

Vicente Reynal: Good morning, Joseph Alfred Ritchie.

Vikram U. Kini: Can you just touch on the margin profile of the recurring revenue business, the $450,000,000 that you referenced, Vicente. I recall you guys talking about a gross margin profile that was north of 60%. I am just wondering if that is actually coming through as expected and maybe that will be question number one. So, yeah, I think in general,

Christopher M. Snyder: Sure, Joseph Alfred Ritchie. Let me start with that.

Vikram U. Kini: the recurring revenue business, whether it be what we call package care or all these other components, yes, it is, across the entire enterprise, typically a higher margin profile comparatively speaking to, I would say, the balance of our kind of normal course business. Now that being said, yes, margins can play in that range that you are speaking to. You know, what I would probably tell you here, though, is we are also making sure that we are taking that opportunity to reinvest appropriately in the business. I have mentioned a few times some of those commercial reinvestments, even on the recurring revenue side.

You know, a lot of our commercial reinvestments are in areas like service technicians and things of that nature to make sure that we can continue to grow our recurring revenue base on a go-forward basis. So, you know, again, I think generally yes, margin profiles that play in and around areas that you have mentioned. But also certainly reinvest to make sure we can drive future growth.

Jeffrey Todd Sprague: Got it.

Vikram U. Kini: Got it. So the way to think about it is that, like, when you get the full run rate, you will see probably a more accretive margin profile than what you are seeing today coming out of the business because of some of the reinvestment that you are doing. Is that a fair way to characterize it?

Jeffrey Todd Sprague: Yeah. Yeah. No. That is what I heard.

Vikram U. Kini: Yeah. And then I guess the following question is I look. I know that the M&A that is not completed is not part of the guide. But given your expectation that you will do about, you know, potentially four to five points revenue contribution this year.

Jeffrey Todd Sprague: What is the

Vikram U. Kini: like, first-year margin profile look like for the things that you are looking at that you are hoping to complete in your pipeline today? Yeah, Joseph Alfred Ritchie. I will start here. So obviously, a bit speculative because, quite frankly, year to year and deal to deal, the margin profiles can clearly be a little bit different. You know, probably the best way I would describe it is that, as Vicente said here, one, purchase multiples are quite prudent. The ability to derive double-digit returns, if not mid-teens returns by year three, and as such, take multiple turns out from controllable cost action synergies, things of that nature, clearly is still the playbook.

You know, if I had to put, you know, a broad kind of sweeping statement around it, you know, the acquisitions that are maybe upon acquisition maybe in the lower twenties margin profile, but ones that we see pretty direct path to being in line with, if not better than, segment average margin profile is probably a best way to maybe explain it. But, clearly, each acquisition is a little bit different. And, frankly, you have seen acquisitions that are immediately accretive upon acquisition in certain cases. So, again, not all made equal. But that is probably the best way I would describe it. Helpful. Thank you, guys.

Operator: The next question comes from David Raso with Evercore ISI. Your line is open.

Vikram U. Kini: Thank you. I was

Stephen Volkmann: interested to see the ITS organic orders in the quarter that EMEA was down mid single digit. Just we have heard generally more constructive things out of Europe, and I am just curious if you are seeing was that sort of a comp? Sort of temporary? I am just trying to see where those areas that, you know, things that were down maybe, you know, are inflecting a little bit or just a unique dynamic. Can you explain the Europe? And I have a quick follow-up.

Vicente Reynal: Yeah. No. It was just, I mean, nothing to read into it. I mean, just project timing, basically. And that was basically, I mean, but, again, we continue to be really encouraged. I mean, you saw our EMEA business was basically driving very nice positive order growth for the full year. So even in ITS, with that Q4 commentary being negative, still for the full year was up orders, kind of, positive, low single-digit organic.

Vikram U. Kini: From a full-year perspective.

David Raso: So that is what I was curious. I mean, do you see that business as up? Do the order rates back up in Europe, or are they truly running at negative level? Because, I mean, year to date, we do not have the K yet, but year to date, the revenue have been up in EMEA within ITS. I am just curious if there is

Jeffrey Todd Sprague: Sure. Sure. Yeah. But mhmm.

Vicente Reynal: No. Not an issue in the fourth quarter. No. I mean, again, some countries are doing better than others. I mean, Mediterranean countries like Spain, Italy, France seem to be actually growing faster than the Central European, like Germany at this point in time. But, obviously, a lot of good activity that we see moving through for the Central European countries as we move forward. But yeah.

David Raso: And then for a follow-up, maybe I missed it, but we are now essentially almost halfway through the quarter. Organic sales currently running to your flat to down a little bit?

Jeffrey Todd Sprague: Or

David Raso: you are just kind of giving that guide and see how the rest of the quarter plays out? You just sound a little more positive in the start of the year than the down

Joseph John O'Dea: you know, flat to down first quarter organically.

Christopher M. Snyder: Yeah. David Raso, I will take that one. So, yeah, I think the best way to say it here is that I think as we have moved through January, and I will probably reflect a little bit more on the orders

Vikram U. Kini: side of the equation. Generally playing itself out as expected, nothing that we would consider to be atypical, whether it be from seasonality perspective or even moving into 2026. So, you know, again, nothing that has happened thus far that would say anything different from either the guidance or kind of even the commentary that Vicente provided earlier.

David Raso: Alright. Thank you very much.

Jeffrey Todd Sprague: Thank you.

Operator: The next question comes from Andrew Edouard Buscaglia with BNP Paribas. Your line is open.

Vikram U. Kini: Good morning, everyone. Good morning, Andrew Edouard Buscaglia. You made a comment earlier on China, just that it is improving and that has been a little bit of a change, let us say, in the last quarter or two.

Christopher M. Snyder: And other companies are kind of talking about that a little bit more. Where can you get more specific about where you are seeing this

Vikram U. Kini: improvement and yeah, how you see that playing out in 2026?

Vicente Reynal: Mhmm. Yeah. I mean, I think the improvement is really coming from a lot of the launch of new products and technologies that our team is doing into the market. So taking also acquisitions that we have done in the U.S. and also Europe and taking that technology, localizing it, and then selling in China for China. So a good combination of really what I would call a lot of that self-help initiatives that our team is driving more so than there is an overall market improvement in China.

So I think the encouragement, you know, I spent the last week with the team in China, is just seeing that, is that the level of innovation and the level of speed on understanding how we can combine technologies to create differentiated solutions for our customers is pretty unique. You know, we gave one example about the blower combined with aeration. That is actually something new that now the team in China is launching. Gives them a competitive advantage against other companies and, again, taking technologies that we acquired in the U.S. and localizing and driving that in China, for example.

Jeffrey Todd Sprague: Yeah.

Nigel Edward Coe: More company-specific stuff.

Jeffrey Todd Sprague: Yes.

Vikram U. Kini: Yeah. And I know you sound encouraging on life sciences. And, again, that is kind of something

Christopher M. Snyder: other companies are getting a little more constructive on for 2026.

Vicente Reynal: You know, I want to

Christopher M. Snyder: touch on ILC Dover only because with these acquisitions, sometimes they go quiet and the growth

Andrew Edouard Buscaglia: sort of moderated or I do not even if I want to say slowed, but for that business specifically, I just want to check. Are we is this could this be a source of sneaky upside if this acquisition kind of comes back and are there things you have done to it where we could potentially see it contributing to both overall growth and margins this year?

Vicente Reynal: Yeah. I mean, we definitely have done a lot and encourage, you know, whether it is the setup with putting new leaders, the creation or kind of creating the P&L that were needed to really drive execution, the investments that were needed to really penetrate in some of the better end markets and things of that nature. We have done a lot of work. And what we have done here is then created a platform for the acquisition. And now so far, we have done four into that kind of platform that we have. So it is just a lot of work that we have done and that we continue to push hard to do better.

Jeffrey Todd Sprague: Yeah. Okay. Thank you.

Operator: The next question comes from Andrew Alec Kaplowitz with Citi. Your line is open.

Jeffrey Todd Sprague: Hi. Good morning. This is Natalia on behalf of Andy Kaplowitz. Morning.

Operator: It was the first question that I will ask. Trying to be nitpicky here, but historically, you got to 100% FCF conversion. This year, your guidance is under 100%. Is there anything holding you back in terms of free cash flow guidance? Any color you can provide there?

Vikram U. Kini: Sure, Natalia. I will start with that one. So, I think first from us, I think if you kind of look over the course of the last few years, we have been in that kind of low to mid-90s realm. So I think 95% free cash flow conversion is, I would say, not just even consistent, but even, frankly, a touch better than what you have seen in the last few years. Now that being said, clearly, closer to 100%, I think, is clearly the, I would say, the goal, if you will. You know, I think there is not necessarily anything holding us back.

I do think that, you know, clearly, not just earnings growth, but I would call it working capital efficiency probably continues to be one of our kind of major areas for opportunity as we move forward. Not surprisingly, areas around inventory and things like that, particularly coming out of 2025 where some of the tariff dynamics created some inventory build and things like that, is really probably our biggest source of opportunity as we move through 2026. But, no. I would say, generally, otherwise, we expect very consistent cash flow conversion, if not even slightly better than what you have seen in the last couple of years?

Operator: Got it. That is helpful. And then, just curious about just industrial energy efficiency in the sense that when I think about compressors consuming energy in a factory, can you maybe talk about the customer payback that you are seeing right now? Has that improved over the past year? Where do you see it going? Color on there would be helpful.

Vicente Reynal: Yeah. Sure, Natalia. I will say that as price of electricity continues to rise, then that, for sure, will drive better performance in terms of that return on investment for the customer. So we continue to see these paybacks clearly under two years. You know, I mentioned me being in China. I was actually visiting a very large customer in China where compressors were consuming roughly 50% of the total energy at that facility. Now this is a very, very, very large customer. Shows you the conversation was all about that. It was all about how can we help them connect that compressor and fine tune it to reduce that energy and therefore drive more efficiency for that customer.

So I think it is encouraging to see that, obviously, we have the right solutions here.

Jeffrey Todd Sprague: Alright. That is helpful. Thank you.

Operator: That is all the time we have for questions. I will turn the call to Vicente Reynal for closing remarks.

Jeffrey Todd Sprague: Thank you, Sarah.

Vicente Reynal: So as we wrap, I just want to say thank you for the continued interest in Ingersoll Rand Inc. and, more important, thanks again to all of our employees. Our ownership mindset and the culture of ownership is what creates a differentiation of us. Our team thinks and acts like owners every day because they are. And so we remain focused on disciplined execution, very thoughtful capital allocation, and building a company designed to perform across the cycle. So thanks again, and we will talk soon.

Operator: This concludes today's conference call. Thank you for joining. You may now disconnect.

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