Ingersoll Rand's Net Income Halves Amidst Impairments

TL;DR

**Sell IR; massive impairments signal deeper issues than just a bad quarter, and the stock will suffer.**

AI Summary

Ingersoll Rand Inc. reported mixed financial results for the nine months ended September 30, 2025. Revenues increased to $5,559.7 million, up from $5,336.4 million in the prior year, representing a 4.2% growth. However, net income attributable to Ingersoll Rand Inc. significantly decreased to $315.3 million, a substantial drop from $608.8 million in the same period of 2024, primarily due to a $229.7 million goodwill impairment and a $36.1 million impairment of other intangible assets. Operating income also declined to $754.4 million from $921.3 million. Interest expense rose to $189.0 million from $151.4 million. The company also recorded a significant loss on equity method investments of $127.1 million, compared to a $19.0 million loss in the prior year. Despite these challenges, the company's cash and cash equivalents stood at $1,176.6 million as of September 30, 2025, down from $1,541.2 million at December 31, 2024, and it continued share repurchases, with treasury stock increasing to $2,201.5 million from $1,493.9 million.

Why It Matters

Ingersoll Rand's significant goodwill and intangible asset impairments, totaling $265.8 million, signal potential overvaluations in past acquisitions or deteriorating market conditions for certain business units, directly impacting investor confidence and future earnings potential. The substantial decline in net income, despite revenue growth, suggests profitability pressures that could affect dividend sustainability and share price performance. For employees, these impairments might indicate strategic shifts or potential restructuring in affected segments. In a competitive landscape, these write-downs could weaken Ingersoll Rand's ability to invest in new technologies or expand market share, potentially benefiting rivals. Customers might see impacts on product development or service offerings if the underlying assets were critical.

Risk Assessment

Risk Level: high — The risk level is high due to the significant impairment of goodwill ($229.7 million) and other intangible assets ($36.1 million) for the nine months ended September 30, 2025, which directly led to a substantial decrease in net income from $608.8 million to $315.3 million. This indicates potential overvaluation of assets or deteriorating business conditions in certain segments, posing a material risk to future profitability and asset values.

Analyst Insight

Investors should consider reducing their exposure to Ingersoll Rand Inc. given the significant goodwill and intangible asset impairments, which suggest underlying business challenges. Monitor future filings closely for any further impairments or strategic changes, as these write-downs could signal a prolonged period of underperformance.

Financial Highlights

revenue

$5,559.7M

operating Margin

13.6%

net Income

$315.3M

eps

$0.78

gross Margin

43.9%

cash Position

$1,176.6M

revenue Growth

+4.2%

Revenue Breakdown

Key Numbers

• $5,559.7M — Revenues (Increased from $5,336.4M in 2024 for the nine-month period)
• $315.3M — Net Income Attributable to Ingersoll Rand Inc. (Decreased significantly from $608.8M in 2024 for the nine-month period)
• $229.7M — Goodwill Impairment (Recorded for the nine-month period ended September 30, 2025)
• $36.1M — Other Intangible Assets Impairment (Recorded for the nine-month period ended September 30, 2025)
• $127.1M — Loss on Equity Method Investments (Increased from $19.0M in 2024 for the nine-month period)
• $0.78 — Diluted Earnings Per Share (Decreased from $1.49 in 2024 for the nine-month period)
• $1,176.6M — Cash and Cash Equivalents (As of September 30, 2025, down from $1,541.2M at December 31, 2024)
• $2,201.5M — Treasury Stock (Increased from $1,493.9M at December 31, 2024, indicating share repurchases)

Key Players & Entities

• Ingersoll Rand Inc. (company) — Registrant in 10-Q filing
• $5,559.7 million (dollar_amount) — Total revenues for nine months ended September 30, 2025
• $315.3 million (dollar_amount) — Net Income Attributable to Ingersoll Rand Inc. for nine months ended September 30, 2025
• $229.7 million (dollar_amount) — Impairment of goodwill for nine months ended September 30, 2025
• $36.1 million (dollar_amount) — Impairment of other intangible assets for nine months ended September 30, 2025
• $127.1 million (dollar_amount) — Loss on equity method investments for nine months ended September 30, 2025
• $2,201.5 million (dollar_amount) — Treasury stock at cost as of September 30, 2025
• New York Stock Exchange (regulator) — Exchange where Common Stock is registered

FAQ

Risk Factors

• Goodwill and Intangible Asset Impairment [high — financial]: The company recorded a significant $229.7 million goodwill impairment and a $36.1 million impairment of other intangible assets for the nine months ended September 30, 2025. These impairments indicate a potential overvaluation of acquired assets or a decline in their expected future economic benefits.
• Deterioration in Equity Method Investments [high — financial]: A substantial loss of $127.1 million on equity method investments was recorded for the nine months ended September 30, 2025, a significant increase from the $19.0 million loss in the prior year. This suggests underperformance or financial distress in associated companies.
• Increased Interest Expense [medium — financial]: Interest expense rose to $189.0 million for the nine months ended September 30, 2025, from $151.4 million in the prior year. This increase, coupled with lower operating income, puts pressure on profitability.
• Supply Chain Disruptions [medium — operational]: While not explicitly quantified in the summary, the company's operations are subject to supply chain risks, which can impact production, costs, and delivery times. Note 7 mentions a Supply Chain Finance Program.
• Compliance with Accounting Standards [low — regulatory]: The company must adhere to complex accounting pronouncements, including those related to acquisitions (Note 2), revenue recognition (Note 15), and fair value measurements (Note 14). Non-compliance can lead to financial restatements and regulatory scrutiny.

Industry Context

Ingersoll Rand operates in the industrial sector, providing essential equipment and services for various end markets. The industry is characterized by cyclical demand tied to global economic activity, infrastructure spending, and manufacturing output. Competitors include companies like Xylem, Dover Corporation, and Emerson Electric, all vying for market share through innovation, efficiency, and service offerings.

Regulatory Implications

The company faces ongoing regulatory scrutiny related to financial reporting accuracy, environmental standards, and trade practices. The significant impairments highlight the importance of robust internal controls and accurate asset valuation to comply with accounting standards and maintain investor confidence.

What Investors Should Do

1. Monitor impairment drivers
2. Analyze margin pressure
3. Evaluate cash flow and capital allocation

Glossary

Goodwill Impairment

A reduction in the carrying value of goodwill on the balance sheet when its fair value is determined to be less than its carrying amount. This often occurs when the acquired business underperforms expectations. (A significant $229.7 million goodwill impairment was recorded, negatively impacting net income.)

Other Intangible Assets Impairment

A reduction in the carrying value of intangible assets (like patents, trademarks, customer lists) when their fair value falls below their book value. (The company recorded a $36.1 million impairment for these assets, contributing to the net income decline.)

Equity Method Investments

Investments in other companies where the investor has significant influence but not control. The investment's value is adjusted for the investor's share of the investee's net income or loss. (A substantial loss of $127.1 million on these investments significantly reduced the company's net income.)

Treasury Stock

Stock that a company has repurchased from the open market. It is recorded as a contra-equity account and reduces total stockholders' equity. (An increase in treasury stock to $2,201.5 million indicates the company actively repurchased its own shares.)

Operating Income

A measure of a company's profit after deducting operating expenses from revenues. It excludes interest and taxes. (Operating income decreased to $754.4 million from $921.3 million, reflecting higher costs and impairments.)

Diluted Earnings Per Share (EPS)

A calculation of a company's profit divided by the number of its outstanding common shares, including the potential dilution from stock options and convertible securities. (Diluted EPS fell to $0.78 from $1.49, reflecting the lower net income.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Ingersoll Rand Inc. saw a modest revenue increase of 4.2% to $5,559.7 million. However, profitability was severely impacted, with net income attributable to Ingersoll Rand Inc. plummeting from $608.8 million to $315.3 million. This decline was primarily driven by significant goodwill ($229.7M) and other intangible asset ($36.1M) impairments, alongside a substantial increase in losses from equity method investments ($127.1M vs $19.0M). Operating income also fell, and interest expense rose, further pressuring earnings.

Key Financial Figures

• $0.01 — ange on Which Registered Common Stock, $0.01 Par Value per share IR New York Stock E

Filing Documents

• iri-20250930.htm (10-Q) — 2306KB
• ir2025q310-qex311.htm (EX-31.1) — 10KB
• ir2025q310-qex312.htm (EX-31.2) — 10KB
• ir2025q310-qex321.htm (EX-32.1) — 5KB
• ir2025q310-qex322.htm (EX-32.2) — 5KB
• 0001628280-25-047838.txt ( ) — 13000KB
• iri-20250930.xsd (EX-101.SCH) — 70KB
• iri-20250930_cal.xml (EX-101.CAL) — 116KB
• iri-20250930_def.xml (EX-101.DEF) — 395KB
• iri-20250930_lab.xml (EX-101.LAB) — 915KB
• iri-20250930_pre.xml (EX-101.PRE) — 671KB
• iri-20250930_htm.xml (XML) — 2594KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements 5 Condensed Consolidated Statements of Operations (Unaudited) 5 Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) 6 Condensed Consolidated Balance Sheets (Unaudited) 7 Condensed Consolidated Statements of Stockholders' Equity (Unaudited) 8 Condensed Consolidated Statements of Cash Flows (Unaudited) 10 Notes to Condensed Consolidated Financial Statements 11 Note 1. Basis of Presentation and Recent Accounting Pronouncements 11 Note 2. Acquisitions 12 Note 3. Restructuring 15 Note 4. Allowance for Credit Losses 16 Note 5. Inventories 16 Note 6. Goodwill and Other Intangible Assets 17 Note 7. Supply Chain Finance Program 18 Note 8. Accrued Liabilities 18 Note 9. Benefit Plans 19 Note 10. Debt 20 Note 11. Stock-Based Compensation Plans 22 Note 12. Accumulated Other Comprehensive Loss 24 Note 13. Hedging Activities and Derivative Instruments 26 Note 14. Fair Value Measurements 29 Note 15. Revenue from Contracts with Customers 31 Note 16. Income Taxes 34 Note 17. Other Operating Expense, Net 34 Note 18. Contingencies 34 Note 19. Segment Reporting 35 Note 20. Earnings Per Share 37 Note 21. Equity Method Investments 38

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 39

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 52

Controls and Procedures

Item 4. Controls and Procedures 52

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 53

Risk Factors

Item 1A. Risk Factors 53

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 53

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 53

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 53

Other Information

Item 5. Other Information 53

Exhibits

Item 6. Exhibits 54

SIGNATURES

SIGNATURES 55 2 Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS In addition to historical information, this Form 10-Q may contain "forward-looking statements" within the meaning of the "safe harbor provisions" of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts included in this Form 10-Q, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, results of operations, financial position, business outlook, business trends and other information, may be forward-looking statements. Words such as "estimates," "expects," "contemplates," "will," "anticipates," "projects," "plans," "intends," "believes," "forecasts," "may," "should" and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs, estimates and projections will result or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements. There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Form 10-Q. Such risks, uncertainties and other important factors that could cause actual results to differ include, among others, the risks, uncertainties and factors set forth under "Part I, Item 1A. Risk Factors" and "Part II, Item 7. Management's Discussio

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS INGERSOLL RAND INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited; in millions, except per share amounts) For the Three Month Period Ended September 30, For the Nine Month Period Ended September 30, 2025 2024 2025 2024 Revenues $ 1,955.0 $ 1,861.0 $ 5,559.7 $ 5,336.4 Cost of sales 1,099.8 1,046.0 3,114.1 2,981.8 Gross Profit 855.2 815.0 2,445.6 2,354.6 Selling and administrative expenses 361.0 334.3 1,082.2 1,012.7 Amortization of intangible assets 94.9 95.0 277.8 277.8 Impairment of goodwill — — 229.7 — Impairment of other intangible assets — — 36.1 — Other operating expense, net 23.8 29.4 65.4 142.8 Operating Income 375.5 356.3 754.4 921.3 Interest expense 65.1 63.8 189.0 151.4 Loss on extinguishment of debt — — — 3.0 Other income, net ( 9.0 ) ( 9.5 ) ( 35.2 ) ( 40.8 ) Income Before Income Taxes 319.4 302.0 600.6 807.7 Provision for income taxes 73.6 73.8 153.1 174.3 Loss on equity method investments — ( 4.8 ) ( 127.1 ) ( 19.0 ) Net Income 245.8 223.4 320.4 614.4 Less: Net income attributable to noncontrolling interests 1.7 1.8 5.1 5.6 Net Income Attributable to Ingersoll Rand Inc. $ 244.1 $ 221.6 $ 315.3 $ 608.8 Basic earnings per share 0.62 0.55 0.79 1.51 Diluted earnings per share 0.61 0.54 0.78 1.49 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Table of Contents INGERSOLL RAND INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited; in millions) For the Three Month Period Ended September 30, For the Nine Month Period Ended September 30, 2025 2024 2025 2024 Comprehensive Income Attributable to Ingersoll Rand Inc. Net income attributable to Ingersoll Rand Inc. $ 244.1 $ 221.6 $ 315.3 $ 608.8 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments, net ( 22.7 ) 142.4 316.7 34.9 Unrecognized gain (loss) on cash flow hedges 0.1 ( 3.6 )

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