We released our third quarter financial results earlier this morning and you can find both our press release and earnings call slide presentation in the Investor Relations section of our website idexcorp.com. Today's call will begin with Eric providing highlights of our third quarter results and a discussion of our current business outlook and strategies. We do this while remaining focused on driving long-term sustainable growth and value for all of our stakeholders. 80/20 not only enhanced the efficiency of our operations but also served as a decision-making framework and growth accelerator, guiding our focus, resource allocation, and portfolio optimization.
These additions helped us establish higher growth platforms leveraged to 21st century secular trends. Today, we are intensively deploying 80/20 in these areas to enhance efficiencies and productivity and unlock integrated growth potential. I'd like to take a moment and shine a light on the three pillars of 80/20-driven higher growth so you can best understand our strategy to unlock sustainable value for shareholders. The first pillar involves targeting high growth advantaged markets as we allocate capital within our portfolio.
Each acquired company links and integrates in some way with other pieces of IDEX, providing scale and efficiency while reducing enterprise complexity. Our collective growth entitlement has moved to the right of traditional industrial indexes. We now have five thematic growth platforms that cover half of our revenue, and we believe they will disproportionately fuel organic growth for IDEX as we move forward. In prior earnings calls, we talked about our build out of the intelligent water platform, expanded in the last few years with the acquisitions of Nexsight and Subterra.
| Metric | Period | Current guidance |
|---|---|---|
| Adjusted EPS (full-year 2025) | FY2025 | $7.86-$7.91 (Narrowed within prior range) |
| Platform optimization and cost containment savings | FY2025 | Over $60 million (about $62 million) (On track; Q4 run rate ~$20 million) |
| Free cash flow conversion | FY2025 | At least 100% of adjusted net income (On pace) |
| Metric | YoY | Note |
|---|---|---|
| HST segment | Organic orders +5%, revenue +10% | Volume strength in life sciences, space and defense, semiconductor, consumables, pharma, and data centers more than offset declines in semiconductor lithography and industrial businesses; EBITDA margin expanded 120 bps on volume leverage, optimization savings, and favorable price-cost. |
| FMT segment | Organic orders +8%, organic sales +4% | Orders supported by the intelligent water platform on project timing and favorable prior-year comps; EBITDA margin improved 90 bps on favorable price-cost and platform optimization and cost containment actions. |
| FSDP segment | Organic orders +7%, organic sales -5% | Order growth was largely timing-driven (dispensing); sales declined on soft volumes in Fire OEM, rescue tools, and dispensing, with the dispensing refresh cycle shifting toward refurbishment; EBITDA margin contracted 200 bps on volume deleverage. |
| Price realization | About 3.5% in Q3 (high point for the year) | Increased through the year largely in response to tariff announcements; roughly 1.5 points traditional price plus about 2% tariff-related pricing to offset incremental cost. |
| Free cash flow | -2% to $189 million | Decline driven by higher working capital. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| 80/20 operating model and Phase Three evolution | — | Framed three pillars of 80/20-driven higher growth: targeting advantaged markets, integrating businesses within growth platforms, and balanced capital allocation; five thematic platforms now cover half of revenue. | Rising |
| Capital allocation shift toward bolt-ons and shareholder returns | Heavy large-M&A investment to build growth platforms | Focus moved to smaller bolt-ons and portfolio optimization, with accelerated share repurchases and dividends; no large acquisitions expected near term. | Rising |
| Macro uncertainty and industrial demand | Tariff/policy swings resolved in July per the last call | Day rates stable but at a slightly lower level than Q1, no clear inflection, with continued large-order hesitation and policy uncertainty. | Steady |
| Data center and water growth applications | Airtech power-gen wins and optical switching win mentioned prior quarter | Airtech a top driver of HST orders and sales; Muon pursuing data-center cooling; intelligent water (Nexsight, Subterra) a strong organic contributor. | Rising |
| Cost reduction and rooftop consolidation | Headcount reductions earlier in the year; delayering referenced | $17 million Q3 savings stepping to ~$20 million Q4; structural delayering (~$42M) plus temporal cost containment (~$20M); rooftop consolidation flagged as a future 2026 opportunity. | Rising |