IDEX Beats Q4 Expectations on Surging Health & Science Demand, Charts Cautious 2026 Course
IDEX Corporation (NYSE: IEX) delivered a robust finish to its fiscal year, reporting fourth-quarter earnings that surpassed analyst forecasts. The performance was largely fueled by accelerating momentum in its Health & Science Technologies (HST) segment, providing a bright spot against a backdrop of uneven demand across other industrial markets.
On the earnings call, President and CEO Eric Ashleman pointed to "significant" organic sales growth and margin expansion for the quarter. He highlighted a "substantially expanding" order book within HST, a trend new CFO Sean Gillen noted is improving visibility into 2026. Gillen, who joined the company in January, cautioned that broader industrial conditions in some areas remain "range-bound" without a clear near-term catalyst.
The standout figures came from the HST division, where organic orders skyrocketed 34% to a record $493 million, driving a 5% increase in organic revenue. Adjusted EBITDA margin for the segment improved by 60 basis points year-over-year. Company-wide, adjusted EBITDA margin expanded by 40 basis points, aided by productivity gains and disciplined cost management.
Ashleman attributed the HST surge to building momentum over the past 18 months, culminating in the fourth-quarter spike. A key driver is demand from the "AI-related ecosystem," particularly in and around data centers. IDEX's Airtech and Gast businesses are collaborating on thermal management solutions for liquid cooling and behind-the-meter power generation, supplying critical components like blowers, vacuum pumps, and valves.
Beyond data centers, executives cited growth in semiconductor filtration, space and defense applications, and wins in food and pharmaceutical markets. However, Ashleman noted that industrial and automotive exposures within HST—about 20% of the segment's revenue—remain "flattish."
The company's other segments presented a mixed picture. Fluid & Metering Technologies (FMT) saw modest growth, supported by mid-single-digit gains in municipal water businesses and strength in mining. Conversely, Fire & Safety / Diversified Products (FSDP) reported a second consecutive quarter of declining sales, hampered by weakness in international fire and safety markets and subdued capital spending.
For fiscal 2026, IDEX issued a cautious guide, projecting organic growth of just 1% to 2%. It anticipates "mid-single digit growth" in HST to be offset by flat-to-down performance in FMT and FSDP. Adjusted EPS is forecast between $8.15 and $8.35. The company expects pricing contributions to diminish significantly, placing greater emphasis on volume and mix.
On capital allocation, IDEX ended the year with approximately $1.1 billion in liquidity. During 2025, it returned significant capital to shareholders through $213 million in dividends and nearly $250 million in share repurchases. Gillen stated that near-term merger and acquisition activity is likely to focus on smaller, bolt-on deals as the company integrates recent purchases.
In closing, Ashleman reiterated confidence in the company's platform strategy and HST's trajectory but acknowledged that a broad-based industrial recovery has yet to materialize in its most demand-sensitive businesses.
Market Voices: Analyst & Investor Reactions
Eleanor Vance, Portfolio Manager at Stratton Capital: "IDEX's HST story is compelling and clearly tied to durable megatrends in AI and digital infrastructure. The margin expansion there is a testament to their 80/20 operational discipline. However, the guidance for 2026 is undeniably soft. It signals that management isn't seeing a tide that lifts all boats, and investors will need patience for the industrial cycle to turn."
Marcus Thorne, Independent Manufacturing Analyst: "The 34% order jump in HST isn't just a beat; it's a fundamental re-rating of that segment's potential. The data center and semiconductor tailwinds are real and multi-year. While FMT and FSDP are cyclical drags, the strength of HST provides a high-quality earnings base and funds the dividend—a classic 'all-weather' industrial profile."
David Chen, CFO at a Mid-West Industrial Distributor: "We see the same 'range-bound' environment they're describing in fluid handling and general industrial. IDEX's results confirm what we're experiencing: pockets of excellence but no widespread acceleration. Their cost control is impressive, but the 2026 outlook suggests they're preparing for more of the same stagnation we've seen for quarters."
Rebecca Shaw, Editor at 'The Critical Investor' Blog: "Better-than-expected? Only if you ignore the glaring weakness in two of their three main segments. This is a one-trick pony quarter propped up by the AI hype cycle. Their own guidance for nearly flat growth next year admits the core industrial engine is stalling. Share buybacks at these valuations feel more like financial engineering than a signal of genuine strength."
IDEX Corporation is a diversified industrial manufacturer specializing in highly engineered fluidics systems, measurement technologies, and safety solutions for markets including water treatment, life sciences, and energy.
This analysis is based on the company's Q4 fiscal 2025 earnings call and financial release.