IDEX Corporation

Q2 reported organic sales growth was 5%, adjusted EBITDA margin was 28.1% (+70 bps YoY), adjusted gross margin was 46.4% (+110 bps YoY), and adjusted EPS was $2.32 (+12% YoY). Orders grew 28% organically overall, including 47% in HST, 11% in FMT, and 19% in FSDP. The quarter included a $0.08 EPS benefit from IEEPA tariff refunds; excluding that, results still beat the prior guidance range of $2.07 to $2.12. For 2026, IDEX raised organic growth guidance to 5% to 6%, adjusted EBITDA margin to 27% to 27.3%, adjusted EPS to $8.70 to $8.85, and Q3 adjusted EPS guidance to $2.20 to $2.25. Capex guidance increased from $90 million to approximately $110 million.

Eric Ashleman’s tone was upbeat and confident, emphasizing that the quarter showed continued momentum from the first quarter and that the company is seeing the benefits of its growth-platform strategy. He highlighted strong demand in data center, semiconductor, space and defense, as well as signs of improvement in more traditional industrial demand. He also said IDEX is still early in its growth transformation, with 8020, portfolio focus, and selective capital deployment expected to create more value over time.

Sean Gillen focused on the beat versus guidance, the tariff refund mechanics, and the margin flow-through. He said the tariff refunds and related customer rebates created a net $0.08 EPS benefit in Q2, that adjusted EBITDA margin excluding IEEPA was toward the high end of the Q2 range, and that free cash flow was $177 million with liquidity above $1.1 billion. He also noted gross leverage improved to 1.9x from 2.1x a year ago, repurchases were $77 million in the quarter, dividends were $54 million, and the company plans to keep buybacks around $75 million per quarter through the rest of 2026 while flexing for M&A and leverage.

Analysts pressed management on whether the strength in HST and FMT reflects a durable demand inflection or mostly exposure to hot end markets like AI, data center, and space. Management said the strength is real and increasingly supported by backlog, longer lead times, and customer commitments, while also noting that much of IDEX still runs on rapid-replenishment dynamics. Questions also focused on capital allocation and CapEx; management said most of the higher CapEx is in HST for 2027-2028 capacity, and that future buybacks and any larger acquisitions will depend on the M&A pipeline and leverage.