IDEX (NYSE:IEX) executives said the company closed fiscal 2025 with “better-than-expected” fourth-quarter results, led by accelerating demand in its Health & Science Technologies (HST) segment and continued progress on its “purposeful evolution” strategy anchored by 80/20 practices and platform-based growth initiatives.
On the call, President and CEO Eric Ashleman highlighted organic sales growth and margin expansion for IDEX in the quarter, alongside a “significantly expanding” HST order book. Chief Financial Officer Sean Gillen—who joined the company in January—said order strength, particularly in HST, is improving visibility into 2026 even as parts of the broader industrial environment remain “range-bound” with no clear inflection in demand.
Fourth-quarter performance: HST orders hit record, margins expanded
Gillen said adjusted EBITDA margin for IDEX expanded 40 basis points year-over-year in Q4, driven by productivity gains, favorable price-cost dynamics and cost discipline, which more than offset volume deleverage and unfavorable mix. Adjusted gross margin was flat year-over-year, as price-cost and productivity benefits were offset by volume deleverage and mix. He also noted adjusted EPS came in above the company’s guided range for the quarter.
For the full year, Gillen said IDEX generated free cash flow of $617 million, up 2% versus the prior year, with free cash flow conversion of 103% of adjusted net income. He added the company’s free cash flow conversion target remains at least 100%.
What drove demand: data center ecosystem, municipal water, and select end markets
Ashleman said HST momentum has been building over the last year and a half, culminating in the Q4 surge in orders. He pointed to demand tied to the “AI-related ecosystem within and near data centers,” including collaboration between the Airtech and Gast businesses on thermal management applications supporting data center liquid cooling and behind-the-meter power generation. IDEX supplies components such as blowers, vacuum pumps and valves into those applications, he said.
Beyond data centers, executives cited growth in semiconductor-related filtration and sealing consumables, space and defense applications, and wins in food and pharma markets. Ashleman said industrial and auto exposures within HST—about 20% of segment revenue—remain “flattish,” with no meaningful signs of improvement.
In Q&A, Ashleman said just under half of the year-over-year backlog build in HST was in “direct data center applications,” while other areas such as semiconductor (including consumables supporting memory production) are “one or two steps over” but still part of the same ecosystem. He added January order trends in HST were strong as well, and that year-end budget dynamics did not account for the majority of Q4 strength.
In Fluid & Metering Technologies (FMT), organic orders grew 4% and organic sales grew 1% in Q4. Ashleman said municipal water-facing businesses grew mid-single digits, and he cited mining strength through the Abel franchise as demand for precious metals increased. During Q&A, he said the municipal-facing water business delivered double-digit growth in Q4 and the company is planning for “mid-single-digit plus” growth going forward, emphasizing the critical nature of IDEX’s inspection and analytics offerings that help municipalities prioritize underground infrastructure work.
However, management said FMT is seeing softness in chemical, energy and agriculture markets. Gillen noted oil and gas, chemical and agricultural exposures make up over a third of FMT. Industrial order rates, he said, appear “range-bound” without a sustainable demand inflection.
In Fire & Safety / Diversified Products (FSDP), organic orders were flat and organic sales declined 5% for the second consecutive quarter. Gillen said continued growth in North American fire OEM and stability at BAND-IT were offset by weakness outside the U.S. in fire and safety and subdued capital spending in dispensing.
Pricing, cost actions, and capital allocation
Asked about pricing, management said fiscal 2025 price contribution was about 3%, with Q4 around 3.5%. For 2026, the company’s guidance assumes a much smaller price contribution—about 0% to 0.2% within the 1% to 2% organic growth outlook—with overall volumes roughly flat, supported by positive volumes in HST and negative volumes in FMT and FSDP.
Gillen said platform optimization and cost containment generated approximately $60 million of full-year savings in 2025, comprised of about $40 million structural savings and roughly $20 million temporary actions. He said most benefits were realized in 2025 and that a portion of the temporary savings may be allowed to return in 2026 as the company invests to support growth areas. He added there are no incremental “round two” cost takeout actions planned for 2026 outside of normal-course productivity.
On capital deployment, Gillen said IDEX ended 2025 with approximately $1.1 billion of liquidity and reduced gross leverage from 2.2x to 2.0x during the year while paying $213 million in dividends. IDEX also repurchased $73 million of shares in Q4, bringing total 2025 repurchases to nearly $250 million (about 1.4 million shares). Looking ahead, he described a framework spanning balance sheet strength, organic investment, M&A, and shareholder returns, noting near-term M&A is likely to be bolt-on in nature as the company focuses on integrating recent acquisitions.
2026 outlook: modest organic growth with HST strength offset by industrial softness
For fiscal 2026, management guided to organic growth of 1% to 2%, with “approximate mid-single digit growth” in HST and flat to slightly down expectations for FMT and FSDP. Adjusted EBITDA margin is expected to be 26.5% to 27% in 2026. Gillen said the company expects margin expansion of “perhaps 50 basis points” in HST, while FMT and FSDP assumptions include volume decrementals offsetting price-cost and productivity. The effective tax rate is expected to be about 24%.
IDEX guided adjusted EPS of $8.15 to $8.35 for 2026, representing low- to mid-single-digit year-over-year growth. For Q1 2026, the company expects organic growth of about 1%, adjusted EBITDA margin of about 24.5%, and adjusted EPS of $1.73 to $1.78, which Gillen said is relatively flat year-over-year. He noted Q1 is typically seasonally soft due to winter impacts on certain FMT businesses and budget-cycle resets that can affect larger volume orders in FSDP and HST.
In closing remarks, Ashleman reiterated three takeaways: the company’s growth platform strategy is working, HST is performing strongly with expectations for continued margin expansion, and IDEX’s industrial businesses are positioned to respond quickly if demand inflects upward—though, as of January, management said it has not yet seen that inflection in its most consumption-linked, rapid-replenishment businesses.
About IDEX (NYSE:IEX)
IDEX Corporation is a diversified industrial manufacturer specializing in the design, production and distribution of highly engineered fluidics systems, measurement technologies and safety solutions. The company’s core offerings include positive-displacement pumps, flow meters, valves, sampling systems and analytical instruments that serve a wide range of end markets such as water treatment, chemical processing, energy, food and beverage, and life sciences. Through its focus on precision engineering and proprietary material science, IDEX delivers products designed for reliability in demanding applications.
Operations at IDEX are organized into three principal segments.
