What Management Said
Read the full Q1 2026 transcript ↗We released our first quarter financial results earlier this morning, and you can find both our press release and earnings call slide presentation in the Investor Section of our website, idexcorp.com. Today's call will begin with Eric providing highlights of our first quarter results and an update on our business outlook and strategies. Sean will discuss additional financial details and our updated outlook for 2026. IDEX delivered a strong first quarter and continue to see our growth strategies gain traction as we expand and integrate capabilities in targeted advantage markets powered by 80/20.
In the first quarter, IDEX delivered organic sales growth of 5% and adjusted EBITDA margin of 26%, which reflects a margin expansion of 50 basis points year-over-year. Strength was most pronounced in our Health & Science Technologies or HST segment, where secular drivers continue to fuel growth across high-value applications in data center, semiconductor, and space and defense markets. The strong backlog build in HST improves our visibility to deliver continued solid growth for the balance of the year and into 2027. Finally, orders in our Fluid & Metering Technologies or FMT segment grew 9% organic year-over-year.
Taking our Q1 performance and backlog build into account, we are raising our full year 2026 financial outlook. Before turning it over to Sean, I'd like to walk through a live example of IDEX's capabilities to drive long-term value as 80/20 drives growth, margins, and earnings. Space and defense is a prime example of faster-growing, durable end markets where we are increasingly deploying resources in the HST segment to expand our opportunity set. These markets benefit from growing demand for space-based connectivity and breakthrough defense technologies with long program lives and rising system complexity creating a multiyear growth runway.
What went well
- IDEX delivered a strong first quarter with 5% organic sales growth and adjusted EBITDA margin of 26%, reflecting 50 basis points of year-over-year margin expansion, both above management's expectations.
- Orders grew approximately 10% organically year-over-year, with the strongest momentum in the Health & Science Technologies (HST) segment, where organic orders rose 17% and revenue grew 11%, driven by secular demand in data center, semiconductor, and space and defense markets.
- The strong HST backlog build improved visibility for continued solid growth through the balance of the year and into 2027.
- Fluid & Metering Technologies (FMT) orders grew 9% organically, led by the intelligent water platform, mining, and pumps businesses, with the water platform performing well on both municipal storm water and high-purity semiconductor applications.
- Taking Q1 performance and backlog into account, management raised the full-year 2026 outlook, increasing organic growth, adjusted EPS, and showing confidence in the portfolio's pivot toward durable advantage markets.
- The company repurchased $76 million of shares in the quarter, paid $53 million in dividends, ended with roughly $1.1 billion in liquidity, and maintained gross leverage at about two times.
What went wrong
- Adjusted gross margin declined 40 basis points year-over-year to 44.9% as productivity gains and volume leverage were more than offset by unfavorable mix.
- FSDP organic orders declined 4% and organic sales decreased 1%, with a decline in dispensing due to tough comps on project volumes in North America and Asia.
- Life sciences within HST was flattish to slightly down, pressured by the China market for end customers and NIH/academic funding constraints, with core Fluidics and Optical Filters growing only low single digits.
- Free cash flow of $86 million declined $5 million versus last year, driven by higher working capital investment tied to higher growth.
- FMT and FSDP demand was uneven, with general industrial and chemical end markets soft early in the quarter and recovery not uniform across the diagnostic businesses, kept guarded by geopolitical uncertainty.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Organic growth | FY2026 | 3%-4% (Raised) |
| Adjusted EBITDA margin | FY2026 | 26.5%-27% (Unchanged) |
| Adjusted EPS | FY2026 | $8.35-$8.55 (Raised by $0.20) |
| Free cash flow conversion | FY2026 | At least 100% annually (Reaffirmed) |
| Organic growth | Q2 2026 | 3%-4% (New) |
| Adjusted EBITDA margin | Q2 2026 | 26.5%-27% (New) |
| Adjusted EPS | Q2 2026 | $2.07-$2.12 (New) |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Consolidated organic sales | +5% | Balanced between volume and price contribution, with notable strength in HST |
| HST organic revenue | +11% | Higher volumes in advantage markets including semiconductor OE and consumables, data center applications, space and defense, and pharma |
| HST organic orders | +17% | Secular demand and backlog build in data center, semiconductor, and space and defense |
| FMT organic sales | +2% | Supported by intelligent water platform; partially offset by global softness in chemical end markets |
| FMT organic orders | +9% | Strength in water platform and mining, with some demand pulled forward from Q2 |
| FSDP organic sales | -1% | Fire & Safety grew high single digit but was offset by an expected decline in dispensing on tough project comps |
| FSDP organic orders | -4% | Decline in dispensing project volumes in North America and Asia |
| Adjusted gross margin | -40 bps to 44.9% | Productivity gains and volume leverage more than offset by unfavorable mix |
| Adjusted EBITDA margin | +50 bps to 26% | Productivity gains, volume leverage, and positive price cost more than offset negative mix |
| Free cash flow | -$5M to $86M | Higher working capital investment due to higher growth; seasonally lowest cash period |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| 80/20 as a growth tool | Used for focus, margins, and execution for over a decade | Increasingly applied to segment markets, reallocate capital and talent to highest-value opportunities, and codified across integrated growth platforms (two-axis to three-axis) | Expanding |
| Space and defense | Early incumbency position established over the prior decade | Highlighted as a prime advantage market with multiyear growth runway across optics, Mott filtration, and engineered components | Accelerating |
| AI-driven demand | — | Strongest in power generation for data centers, semiconductor manufacturing, and optical switching | Strengthening |
| Life sciences in HST | Pressure from China and NIH/academic funding noted in prior quarters | Flattish to slightly down, low single-digit core growth, expected to improve through the fiscal year | Stable/pressured |
| Short-cycle industrial recovery | Soft general industrial markets | Cadence improved through the quarter (weak January, better February, strong March, held in April) but not uniform across diagnostic businesses | Improving but guarded |
| Capital deployment | Balanced approach across organic investment, bolt-on M&A, and shareholder returns | $76M buyback per quarter committed for 2026, active bolt-on M&A pipeline, dividends maintained | Consistent |
| Tariffs and price cost | Tariff-related pricing actions in prior quarters drove larger positive price cost | Net positive but smaller magnitude; no second-round price actions contemplated in current guide | Moderating |
Q&A Summary
Why should second-half organic growth decelerate from Q1's 5% pace given strong orders (Joe Giordano, TD Cowen)?
HST should continue at a high single-digit to double-digit clip on its order backlog. FMT improved through the quarter with sequential strength but is forecast roughly flat for the year due to one-quarter visibility and macro uncertainty, reflecting some conservatism.
What needs to happen for HST margins to return to the ~30% range and incrementals to the 40s%? (Joe Giordano / Nathan Jones)
Two drivers: recently acquired businesses (Muon, Micro-LAM, Mott) are growing fast but below the 26%-27% segment EBITDA margin, so 80/20 actions to prune low-value pieces will lift their margins; and a recovery in profitable life sciences would add mix benefit. Flow-through was about 33% and is guided to mid-30s% this year, with progress toward 40% expected next year.
How did order cadence trend through the quarter and into April, and what about general industrial book-to-bill? (Matt Summerville, D.A. Davidson)
HST has been consistently strong with less non-linearity. FMT and FSDP were soft in January, recovered in February, were much stronger in March, and held that level in April; the recovery was mixed across diagnostic businesses, with successful project wins traceable to data center and energy grid megatrends, kept guarded by the geopolitical overhang.
Can you provide color on HST backlog visibility and demand support into the back half and 2027? (Bryan Blair, Oppenheimer)
HST drove another backlog increase, with more visibility than classic IDEX because fast-ramping customers in novel applications provide forward demand signals and discuss out-year technology and volume requirements, supporting confidence in growth beyond a 12-month horizon.
What was price cost in the quarter and will incremental pricing be needed for tariffs? (Vlad Bystricky, Citigroup)
Price cost was a net positive to the EBITDA line, though smaller than the larger tariff-driven actions of last year, and is expected to remain roughly net even to slightly positive. No second-round price actions are contemplated in the current guide, but pricing would be revisited if sustained cost pressures emerge.
Why the disconnect between high single-digit FMT order rates and ~1% average sales, and how much conservatism is in the flat guide? (Bryan Blair, Oppenheimer)
FMT orders are largely consumed within the quarter, so a four-quarter view normalizes the movement; water led the strong 9% order growth, with some mining and pumps demand pulled forward from Q2. There is a touch of conservatism in the flattish FMT guide given only one quarter of visibility and macro uncertainty.
More on Idex Corp /De/
Reported 2026-04-29 · figures from the Idex Corp /De/ Q1 2026 earnings call.
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