Ingersoll Rand Q4 2025 Earnings Call - Recurring revenue and M&A engine to offset tariff headwinds while guidance assumes modest organic growth

Conference Call Operator: Hello, and welcome to the Ingersoll Rand fourth quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. I would now like to turn the conference over to Matthew Fort, Vice President, Investor Relations. You may begin.

Matthew Fort, Vice President, Investor Relations, Ingersoll Rand: Thank you, and welcome to the Ingersoll Rand 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 Vik 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 2 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.

Vicente Reynal, Chairman and CEO, Ingersoll Rand: Thanks, Matthew, and good morning to all. Beginning on slide 3, 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, 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 targets. 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 a strong pipeline and disciplined deal execution. The value creation flywheel remains a 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 averaged a 9x pre-synergy multiple and expanded our technological capabilities, demonstrating that our M&A engine continues to help us drive above-market growth. We’re off to a great start heading into 2026, with 9 additional transactions currently under LOI.

In January, we completed our first acquisition of 2026 with Scinomix, a leading manufacturer specializing in technologies that optimize workflow solutions to improve throughput, accuracy, and traceability across multiple life sciences markets. The Scinomix 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 Vic, who will share an update on our financial performance for Q4 and the full year.

Matthew Fort, Vice President, Investor Relations, Ingersoll Rand: Thanks, Vicente. Starting on slide 5, 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 6, orders were up 9% year-over-year or up 1% organically. Heading into 2026, we are well positioned, finishing 2025 with a book-to-bill above 1 and both the ITS and PST 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 top 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, with an adjusted EBITDA margin of 27.4%. 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, free 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 2x, 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, Chairman and CEO, Ingersoll Rand: Thanks, Rick. On slide eight, ITS orders finished up 9% in the fourth quarter. Book-to-bill for the quarter was 0.93 and finished above 1 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 a more detailed breakdown on 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 order 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 9, 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 1.0.

We’re also pleased to highlight that both our precision 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 digits. 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 a relatively easy comp from Q4 of prior year. For the full year, Adjusted EBITDA margin finished at 30%, which is up 40 basis points year-over-year.

For our PST Innovation in Action, we’re showcasing our award-winning EasyJet Flow product from our life science business. EasyJet Flow 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 BioPak 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% and 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 iNomics acquisition, and 1% FX tailwind.

Total adjusted EBITDA for the company is expected to be in the range of $2.13 billion-$2.19 billion. Corporate costs are planned at $170 million, and they’re expected to be incurred evenly per quarter throughout the year. Adjusted EPS is projected to fall within the range of $3.45-$3.57, which is approximately 5% growth at the midpoint.

Vik Kini, Chief Financial Officer, Ingersoll Rand: ... We anticipate our adjusted tax rate to be approximately 23%, net interest expense to be about $230 million, and share count to be approximately 394 million. 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 this very complex environment. 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.

Conference Call Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one 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 Mike Halloran with Baird. Your line is open.

Mike Halloran, Analyst, Baird: Thank you. Morning, everyone.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Morning.

Mike Halloran, Analyst, Baird: Starting on the guidance, what sort of end market trajectory is embedded in the guidance? And on the shorter cycle side of your businesses, are you seeing any signs of change, and what would the businesses that you would look at internally for leading indicators on your side?

Vik Kini, Chief Financial Officer, Ingersoll Rand: Sure, Mike. So let me start with the end market commentary first, as it relates to what we’re 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 all growth with orders in the mid-teens during the Q4 performance. And to 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 very in region for region, is driving some very good funnel activity. I was actually with a team in China last week, and there’s 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 costs. Therefore, the acquisition that we made with Scinomix, which plays very well in that kind of end market. On the general industrial side, we have seen more stability, especially in the back half of 2025, as we kind of have passed the peak of uncertainty related to tariffs.

And that being said, you know, we’re cautiously optimistic about the improving trends moving into 2026. You know, long-cycle project perspective, we haven’t seen any kind of dramatic changes as the funnel remains very healthy. And I think it’s, you know, the other important point of note is we continue to remain very encouraged about the recurring revenue. You know, in terms of some of the indicators that you were asking, Mike, I mean, PMI for us continues to serve as a good overall gauge for our short-cycle businesses, and we’re optimistic about the uptick we recently saw in the U.S. PMI here in January.

However, we think it’s too early to call a meaningful inflection, and 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 of 2026.

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

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah. So, so related to the guidance, you’re exactly as you said, Mike, we’re, we’re not embedding any market recovery here, and, I’m very stable sequentially here from, from what we are seeing today. So, that, that’s what we’re embedding in the guidance. In terms of the end market, some of the headwinds, as we kind of articulated, you know, whether, you know, RNG, electric vehicle, photovoltaic, a lot of that is behind us. And, and I think also the good news here, too, as well, as I-...

mentioned in the, you know, early remarks, our team in China, now three quarters of delivering positive organic order growth, the past three quarters in a row, you know what the market is doing, but also speaks loudly as to what the team is doing. I was with the team in China last week, and it’s very impressive, the amount of innovation and technology and new end markets and new solutions that they’re launching in order to penetrate the market and see that organic growth.

Thanks, Vicente. I appreciate it.

Thank you.

Conference Call Operator: The next question comes from Julian Mitchell with Barclays. Your line is open.

Julian Mitchell, Analyst, Barclays: 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, you know, that 1 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.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, Julian, I’ll take that one here. So as far as the, the organic growth, comment, first and foremost, you know, starting with Q1, we expect Q1 organic to be, you know, I’d say rough- you know, roughly flat, 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 growth, 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, you know, no meaningful market recovery or anything like that necessarily baked in, to the guide. As far as, the EPS, question, generally, the way you’re characterizing it is a fair way to think about it here.

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

Julian Mitchell, Analyst, Barclays: That’s helpful. Thank you, Vic. And then maybe my follow-up would be on the, EBITDA margins. So I think the guidance embeds fully 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, that flips around? And, you know, in light of some of the commentary in the last sort of 8 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.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, sure, Julian, I’ll start. You know, as far as the margin profiling, kind of the way you’ve talked about it, you’re completely correct. I think even as we talked about, you know, on our last earnings call, we did expect, you know, 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, you know, that’s largely impacting the first half of 2026.

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

You know, and as far as the price cost equation and things of that nature, kind of going back to my earlier comments, 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 costs 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 Mitchell, Analyst, Barclays: That’s great. Thank you.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Thank you.

Conference Call Operator: The next question comes from Jeff Sprague with Vertical Research. Your line is open.

Jeff Sprague, Analyst, Vertical Research: Hey, thank you. Good morning, everyone. Hey, just a couple of things. First, just back on the short cycle. Yeah, we’ve all seen the PMI. Vicente, I just wanna kind of clarify a little bit, though: Are you not seeing any actual pickup in short cycle pockets, whether it’s, I don’t know, tools or small compressors or the like? Is 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’ve been running on negative volumes, positive price for what? The better part of eight quarters here, I guess.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, no, Jeff, we’re seeing some pickup in the short cycle, clearly. I mean, as you saw from the order rates, as we kind of deliver here in the fourth quarter, and we see somewhat of a momentum continuing here as we enter 2026 and into January. So the order momentum, I’ll say, continues. I think what with the remark that I made is that, you know, PMI just turned above 50 in the U.S. for the first time in 38 months or so in January. And we’re just saying, "Hey, that’s only one data point." But we’re seeing definitely that better momentum and kind of inflection points. We just want to see more data points of kind of continual better market performance.

... Yeah, Jeff, in terms of one question-

Nigel Coe, Analyst, Wolfe Research: Oh, go ahead. Yeah. Yeah, go ahead. Sorry.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Just question on the volume side of the equation. You know, again, the best way I would probably describe this as we do expect volume performance to improve as we think about the second half versus the first half. You know, I think it’s, you know, probably closer to, you know, probably somewhere in the flattish realm, if you 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 haven’t baked any what I’ll call a meaningful recovery per se in. And obviously, you know, as markets continue to hopefully, you know, improve, we would expect that to be an area for, you know, potential outperformance in the future. We just obviously want to see it materialize first.

Nigel Coe, Analyst, Wolfe Research: And just a follow-up on capital deployment, if I could. It’s 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 don’t know if that’s rates or cash generation and debt reduction. Can you just clarify what, if anything, is in the guide from a capital deployment standpoint?

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, sure, Jeff. I would say the approach is very consistent with how we’ve historically. So essentially, I’ll take the pieces here. One, from the share count perspective, you’re just seeing the annualization of the actions already taken in 2025, where we did approximately $1 billion of share repurchases. So you’re just seeing that now materialize into the share count piece of the equation. From an M&A perspective, consistent with how we’ve historically kind of guided, you’re 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 Scinomix acquisition that Vicente indicated.

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

Nigel Coe, Analyst, Wolfe Research: Great. Thanks.

Conference Call Operator: The next question comes from Joe O’Day with Wells Fargo. Your line is open.

Joe O’Day, Analyst, Wells Fargo: Hi, good morning. Can you dig in a little bit on the acquisition opportunity set when you talk about the 400-500 basis points 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?

Vik Kini, Chief Financial Officer, Ingersoll Rand: Sure. Joe, so the opportunity in the funnel remains really strong. You know, already executed one acquisition with Scinomix and currently have nine companies under LOI. I’ll characterize the pipeline still as being bolt-on in nature, but there’s definitely a couple that we have been cultivating for quite some time that could be on the larger, you know, purchase price of maybe $1 billion or so. But again, it’s the current pipeline is bolt-on in nature today. But we’re definitely seeing a lot of good activity, and particularly on what I just referred to. I mean, our cultivation process continues to remain very strong, and we’re seeing better movement here too as well.

Joe O’Day, Analyst, Wells Fargo: And then on the recurring revenue side, I, I think this has gone from $200 million a couple of years ago to $300 million to now over $450 million. Just, you know, a little bit of color around, you know, what’s, you know, what’s kind of driving some of the traction there, you know, where you’re most pleased, and then, you know, how, how you think about the opportunity in 2026 and, and sort of where, where that could get to?

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yes, absolutely. I mean, we’re very excited about some of the milestones that we achieved here in 2025. You know, not only the $450 million of revenue, which, as you very well said, a couple of years ago, was approximately $200 million, 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 kind of 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 an update to that on our next Investor Day.

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

Joe O’Day, Analyst, Wells Fargo: Thank you.

Conference Call Operator: The next question comes from Nigel Coe with Wolfe Research. Your line is open.

Nigel Coe, Analyst, Wolfe Research: Thanks. Good morning, everyone. I hope all’s well. Lots of details so far. Vic, I just wanted to go back to your comments on 1Q being flat to maybe slightly down, you know, relative to the call it 3% organic you posted in 4Q. So, you know, that would imply, you know, pretty significant kind of quarter-over-quarter deceleration. So just wondering, was there any timing of shipments that benefited 4Q that informs that view? And then just maybe if we could just dimensionalize the price, cost, and investment spending that you are highlighting and, you know, any sense on how we should think about ITS margins again in the first half as the second half?

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, sure, Nigel. Let me take the first one. So, you know, as far as I’d say, the revenue, you know, from Q4 to Q1, remember, I would characterize what you’re seeing really as normal seasonality. You know, if you look at, typically speaking, you know, in any cadence of the year, you know, you typically have Q4 is 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’re referring to here, as far as kind of the sequential movement between Q4 and Q1, very standard. And in fact, I would say the revenue and earnings seasonality, that’s baked into our 2026 guide is almost, you know, it’s actually exactly what you saw in prior years. So again, I would characterize that as standard and nothing atypical compared to kind of what you’ve seen in prior years.

You know, as far as the price cost and really, really more so the investments, you know, obviously, we haven’t 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’s the same continued, I would say, commercial investments that you’ve 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, in commercial-related investments.

So, again, I would say that’s a continued trend and theme. You’ve seen us been very consistent with that in 2025 as well. So I think 2026 is much more of a, I’ll call it, continuation in that respect. As far as the margin question, I think you asked about, you know, ITS. You know, 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, you know, relatively flattish year-over-year, on a full year basis. That’s largely driven, I would say, by the two factors that we’ve mentioned here, the tariff-related expenses, really the carryover there.

We are offsetting with price, but obviously that’s still kind of dilutive from a margin perspective, as well as the, I’d say, continued targeted commercial investment for growth. PST, we do expect to be up, you know, triple-digit margin expansion, you know, in the sense, really, you know, frankly, strong operational execution. I would say, the continued integration, and execution on some of the acquired assets. And then, you know, what I would say is probably a slightly easier comps, particularly in, in the first half of the year, comparatively to the rest of the business. And then we obviously highlighted, you know, kind of corporate costs at a total company level, which we expect to be, you know, roughly even per quarter through the course of 2026.

Nigel Coe, Analyst, Wolfe Research: Vic, that was great color. Thanks. Just a quick one on the PST orders. Obviously, great momentum in life sciences. I think you set up mid-teens, but that implies there was a significant decline in other business units. Just wondering if you could just touch on that quickly.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, sure, Daniel. So I mean, basically, you know, very, very happy and excited with what we’re seeing on the, on the life sciences side. You know, the, the precision technology, also delivering fairly, fairly, fairly, 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, 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 Coe, Analyst, Wolfe Research: Oh, got it. Okay, thanks, Vicente.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah. Thank you.

Conference Call Operator: The next question comes from Nicole DeBlase with Deutsche Bank. Your line is open.

Nicole DeBlase, Analyst, Deutsche Bank: Yeah, thanks. Good morning, guys.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Morning.

Nicole DeBlase, Analyst, Deutsche Bank: Can we just start with, when you look at the full year guidance for organic flat to up to, are you looking for something similar, a similar magnitude in both PST and ITS?

Vik Kini, Chief Financial Officer, Ingersoll Rand: Sure, Nicole, I’ll take that one. Yeah, I think the simple answer is: it’s comparable, right? I think, you know, in terms of the overall, I would say we expect, you know, 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, you know, relatively, comparable trajectory as you think about the sequential movement from Q1 into the back half of the year.

Nicole DeBlase, Analyst, Deutsche Bank: Okay, understood. Thanks, Vic. And then, can we just dig a little bit more into what you’re 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.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah. I mean, I’d 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 that we continue to see some good momentum.

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

Nicole DeBlase, Analyst, Deutsche Bank: Thanks, Vicente. I’ll pass it on.

Conference Call Operator: The next question comes from Nathan Jones with Stifel. Your line is open.

Nathan Jones, Analyst, Stifel: Good morning, everyone.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Morning, Nathan.

Nathan Jones, Analyst, Stifel: I guess I’ll just start off with a question on the EBITDA guidance. I mean, it’s pretty clear you’re not planning on much in the way of volume growth. You get a little bit of addition to EBITDA from M&A. It doesn’t seem to really embed any cost actions or any productivity in the guide. Can you talk about any expectations you have there for cost out or for productivity gains during 2026?

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, sure, Nathan. I’ll start with that one here. So, you know, I think the guide does include some requisite, you know, I would say, productivity or cost actions. Let me kind of take those in pieces here. So clearly, I’d say the headwind from a margin perspective, kind of earlier stated, is really 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’re still seeing that we are growing earnings per share, you know, in a requisite comparable manner, quarterly or first half, second half.

You know, the driver of that or the kind of the offset, you know, tends to come from some of those cost actions. So, first and foremost, you know, you have seen in our financials here that we have taken some proactive restructuring actions in the back half of 2025. Those will continue to materialize into savings into 2026. I’d say payback periods on those actions are very much in line with what you’ve seen us do historically. So that clearly is, I’d 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’d say, the phasing of revenue, very similarly to what you’ve seen in prior years. So those do tend to have a little bit more of a second-half weighting, but that’s just because they follow kind of the shipments. And then the other piece, you know, Nathan, would be that we are, you know, obviously taking, I’d 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 the year, and you’ll start to see some of that materialize, you know, in the revenue base, particularly as we move to the second half of the year.

So I’d 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 kind of, I’d say, reinvestments that you’re seeing from a commercial growth perspective, as well as some of the increased corporate cost on a year-over-year basis.

Nathan Jones, Analyst, Stifel: Thanks for that. And then I guess in terms of forward-looking indicators, you talked about PMI getting a you know good reading in January in the U.S., obviously. You guys have, over the last few years, talked about marketing qualified leads.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Mm-hmm.

Nathan Jones, Analyst, Stifel: as an indicator for your own business. Can you talk about, you know, what that’s telling you in various regions and whether that’s giving you any more confidence in the order rates in the short term here? Thanks for taking the questions.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, sure, Nathan. So, absolutely. I mean, I think our marketing qualified leads is part of core of what we track ourselves internally, you know, by region, by product line, by... even by end market. We continue to see some very 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’s why we’re seeing some good, you know, acceleration in terms of MQL continue to be strong.

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

Conference Call Operator: The next question comes from Chris Snyder with Morgan Stanley. Your line is open.

Chris Snyder, Analyst, Morgan Stanley: Thank you. When we look at the pickup in 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 the first half of 2024, where organic sales outpaced orders. So maybe it’s signaling some level of backlog release, and I’m just wondering if, you know, could that remain a tailwind for the business into the first half of 2026? Thank you.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, Chris, great question. So, you know, I’d start with, first and foremost, the Q4 performance I saw, I would say, had a requisite, I’d say, component of both what I 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, you know, 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, you know, probably speaks to, you know, the drivers of that 3% organic kind of pickup that you saw.

And then as far as, you know, the organic order versus organic sales, you know, probably the simplest way I’d probably describe that is, you know, the Book-to-Bill, you know, first of all, from a full year perspective, slightly over one. So one, you know, we’re encouraged by the fact that you have seen, you know, some backlog build, which I think also provides, you know, some of that increased visibility, but also, you know, 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 would call that very standard, you know, 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, you know, we continue to kind of watch the leading indicators and, you know, see that hopefully continue here as we move into 2026, but encouraged by the contribution of both short cycle and the project side in Q4.

Chris Snyder, Analyst, Morgan Stanley: ... Thank you. I appreciate that. And then maybe just to follow up, could you provide some color on what’s, you know, expected for the life science, organic growth in 2026, within the guide? And, you know, 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.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, sure, Chris. I—you know, as far as the guide, we’re not gonna kinda break the PST component, you know, into the different components. But what we can say here is, I think the way you’ve described it is exactly the way we’re thinking about it. One, definitely encouraged, and Vicente kind of provided a little bit of color on kind of the drivers we’re seeing at the kind of differing components of the life sciences business. So I think we’re incredibly encouraged by what we’re seeing, whether it be on, you know, really in the biopharma side or even kind of the you know, the legacy kind of Ingersoll Rand medical business that we’ve 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 it more of the offset, comparatively speaking, as it’s 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, you know, the bolt-on M&A, you know, 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 Scinomix acquisition that we just did here in January, which we think is a, you know, very attractive, kind of nice, additive, complementary bolt-on to our existing kind of life sciences portfolio. So again, you know, I think your point is very valid. I think the comps, you know, clearly are, you know, they’re there, but I think we’re still encouraged by the momentum we’re seeing, which you saw in the Q4 order rate.

Chris Snyder, Analyst, Morgan Stanley: Thank you, Vic. Appreciate all the color.

Conference Call Operator: The next question comes from Steven Volkmann with Jefferies. Your line is open.

Chris Snyder, Analyst, Morgan Stanley4: Hi. Good morning, guys. Happy Friday. Just a couple very quick ones for me. I’m curious, it seems like valuations are kind of going up across the board, not, not just yours, but I’m presuming in the M&A funnel as well. Just does that change anything in terms of how you manage your capital deployment?

Vik Kini, Chief Financial Officer, Ingersoll Rand: No. No, Steve, I mean, we continue to actually, as you have seen, do really well with the pre-synergy multiple. You know, in 2025, we averaged roughly 9.2x, to be exact, the pre-synergy multiple, and even the one that we acquired here in January continues to be in that kind of range. So I think we continue to be very encouraged with what we’re seeing now. 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.

Chris Snyder, Analyst, Morgan Stanley4: Got it. Thank you. 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?

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, sure, Steve. So we obviously don’t guide on orders, but, you know, I think the simple way to think about it here is we don’t expect anything here to be dramatically different in terms of, I’ll just say, you know, the Book-to-Bill, you know, being 1 on a full year basis and, you know, 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 business. So nothing at this point we would point to that we expect to be dramatically different.

Chris Snyder, Analyst, Morgan Stanley4: Superb. Thank you, guys.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Thank you.

Conference Call Operator: The next question comes from Joe Ritchie with Goldman Sachs. Your line is open.

Joe Ritchie, Analyst, Goldman Sachs: Thanks. Good morning, guys.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Good morning, Joe.

Joe Ritchie, Analyst, Goldman Sachs: Hey, can you, can you just touch on the margin profile of the recurring revenue business, the $450 million plus that you referenced, Vicente? I recall you guys talking about a gross margin profile that was north of 60%. I’m just wondering if that’s actually coming through as expected, and maybe, maybe that’ll be question number one.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Sure, Joe. Let me start with that. You know, I think in general, the recurring revenue business, you know, whether it be, you know, at its gold standard, what we call packaged care or any of the other components, yes, it is, you know, across the entire enterprise, typically a higher margin profile, comparatively speaking, to, I’d say, you know, the balance of our kind of normal course business. Now, that being said, you know, yes, margins can play in that range that you’re speaking to. You know, what I would probably tell you here, though, is we’re also making sure that we’re taking that opportunity to reinvest appropriately in the business.

I’ve mentioned a few times here some of those commercial reinvestments, even on the recurring revenue side, you know, a lot of our commercial reinvestments are in areas like, you know, 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, you know, I think generally, yes, margin profiles that play in and around the areas that you’ve mentioned, but also certainly reinvesting and making sure we can drive the growth.

Joe Ritchie, Analyst, Goldman Sachs: Got it. Got it. So the way to think about it is that, like, you know, when you get the full run rate, you’ll see probably a more accretive margin profile than what you’re seeing today coming out of the business because of some of the reinvestment that you’re doing. Is that a fair-

Vik Kini, Chief Financial Officer, Ingersoll Rand: Mm-hmm

Joe Ritchie, Analyst, Goldman Sachs: way to characterize it?

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah. Yeah, no, that’s, that’s... I agree.

Joe Ritchie, Analyst, Goldman Sachs: ... Yeah, and then I guess the following question is, and look, I know that the M&A that’s not completed is not part of the guide, but given your expectation that you’ll do about, you know, potentially 4-5 point, you know, revenue contribution this year, what is the, like, first-year margin profile look like for the things that you’re looking at, that you’re hoping to complete in your pipeline today?

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, John, I’ll start here. So yeah, obviously, a bit speculative because quite frankly, you know, year to year and deal to deal, the margin profiles can, you know, clearly, you’ll be a little bit different. You know, probably the best way I would describe it is that, as Vicente said here, one, you know, purchase multiple is quite prudent. The ability to derive, you know, 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, you know, maybe upon acquisition, you know, maybe in the lower twenties margin profile, but ones that we see, you know, pretty direct path to being in line with, if not better than segment average margin profile is, is probably the best way to maybe explain it. But clearly, each acquisition is a little bit different, and frankly, you’ve seen acquisitions that are immediately accretive, upon acquisition in certain cases. So again, not all made equal, but, that’s probably the best way I would describe it.

Joe Ritchie, Analyst, Goldman Sachs: Helpful. Thank you, guys.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Thank you.

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

David Rasso, Analyst, Evercore ISI: Thank you. I was interested to see the ITS organic orders in the quarter, that EMEA was down mid-single digit. Just, we’ve heard generally more constructive things out of Europe. I’m just curious if you’re seeing, is that sort of a comp, sort of temporary? I’m just trying to see where there’s 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.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, no, they... Just, I mean, nothing to read into it. I mean, just project timing, basically. And that was basically it. I mean, but again, we continue to be, you know, really encouraged. I mean, you saw our EMEA business, you know, was basically driving, you know, 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 from a full year perspective.

David Rasso, Analyst, Evercore ISI: So that’s what I was curious. I mean, do you see that business as up, or the order rates backed up in Europe, or are they truly running at a negative level? Because, I mean, year to date, we don’t have the K yet, but year to date, the revenues have been up in EMEA with an ITS. I’m just curious if there’s-

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, no. Sure, sure.

David Rasso, Analyst, Evercore ISI: Okay.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Mm-hmm. No, 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 kind of move forward. But yeah. Mm-hmm.

David Rasso, Analyst, Evercore ISI: And then, for a follow-up, maybe I missed it, but we’re now essentially almost halfway through the quarter. Are organic sales currently running to your flat to down a little bit? Or you’re 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, you know, flat to down first quarter organically.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, David, I’ll take that one. So yeah, I think the best way to say it here is that I think as we’ve moved through January, and I’ll probably reflect a little bit more on the orders side of the equation, generally playing itself out as expected, nothing that we would consider to be, you know, atypical, whether it be from a seasonality perspective or even moving into 2026. So, you know, again, nothing that’s happened thus far that would, you know, say anything different from either the guidance or kind of even the commentary that Vicente’s provided earlier.

David Rasso, Analyst, Evercore ISI: All right. Thank you very much.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Thank you.

Conference Call Operator: The next question comes from Andrew Bostaglia with BNP Paribas. Your line is open.

Joe Ritchie, Analyst, Goldman Sachs: Hi, good morning, everyone.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Hi, Andrew.

Joe Ritchie, Analyst, Goldman Sachs: You made a comment earlier on China, just that it is improving, and that’s been a little bit of a change, I’d say, in the last quarter or two. And other companies are kind of talking about that a little bit more. Where can you get more specific about where you’re seeing this improvement and, yeah, how you see that playing out in 2026?

Vik Kini, Chief Financial Officer, Ingersoll Rand: Mm-hmm. 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 in China, and then selling in China for China. So it’s a good combination of really what I would call a lot of the self-help initiatives that our team is driving, more so than there’s 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’s actually something new that now the team in China is launching. Gives them a competitive advantage against some other companies, and again, taking technologies that we acquired in the U.S. and localizing and driving that in China, for example.

Joe Ritchie, Analyst, Goldman Sachs: Yeah. It’s more company specific. That’s-

Vik Kini, Chief Financial Officer, Ingersoll Rand: ... yes.

Speaker 0: Yeah, and you know, you sound encouraging on life sciences, and again, that’s kind of something else other companies are getting a little more constructive on for 2026. You know, I wanna touch on ILC Dover, only ’cause it, you know, with these acquisitions, sometimes they go quiet and, you know, the growth sort of moderated or I don’t even—I don’t know if I want to say slowed, but for that business specifically, I just wanna check, could this be a source of sneaky upside if this acquisition kind of comes back and are there things you’ve done to it where we could potentially see it contributing to both overall growth and margins this year?

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, I mean, we definitely have done a lot and you know whether it is the setup with putting new leaders, the re-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 better end markets and things of that nature. That we have done a lot of work. And what we have done here is then created a platform for then the acquisitions, and now so far, we have done four into that kind of platform that we have. So that is just a lot of work that we have done and, you know, we that we continue to push hard to do better.

Speaker 0: Yeah. Okay. Thank you.

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

Natalia, Analyst Representative, Citi: Hi, good morning. This is Natalia on behalf of Andy Kaplowitz.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Morning.

Natalia, Analyst Representative, Citi: Maybe the first question that I’ll ask, not 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?

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

I do think that, you know, clearly not just earnings growth, but, you know, 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, not surprisingly, you know, 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 probably, probably our, our biggest source of opportunity as we move through 2026. But, no, I, I would say generally otherwise, we expect very consistent, you know, cash flow conversion, if not even slightly better than what you’ve seen, in the last, couple of years.

Natalia, Analyst Representative, Citi: Got it. That’s helpful. And then, just curious about just industrial energy efficiency in the sense that when I think about compressors, you know, consuming energy in a factory, can we talk about the customer payback that you’re seeing right now? Has that improved over the past year? Where do you see it going? Any color around there would be helpful.

Vik Kini, Chief Financial Officer, Ingersoll Rand: Yeah, sure, Natalia, I’ll say that as price of electricity continues to rise, then that for sure will drive better performance in terms of that return on the 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, very large customer, but 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’s encouraging to see that obviously we have the right solutions here.

Natalia, Analyst Representative, Citi: All right. That’s helpful. Thank you.

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

Vik Kini, Chief Financial Officer, Ingersoll Rand: Thank you, Sarah. Well, so as we wrap, I just want to say thank you for the continued interest in Ingersoll Rand, and, and more important, thank 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 act 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 outperform across the cycle. So thanks again, and we’ll talk soon.

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