We released our first quarter financial results earlier this morning, and you can find both our press release and earnings call slide presentation in the Investor Section of our website, idexcorp.com. Today's call will begin with Eric providing highlights of our first quarter results and an update on our business outlook and strategies. Sean will discuss additional financial details and our updated outlook for 2026. IDEX delivered a strong first quarter and continue to see our growth strategies gain traction as we expand and integrate capabilities in targeted advantage markets powered by 80/20.
In the first quarter, IDEX delivered organic sales growth of 5% and adjusted EBITDA margin of 26%, which reflects a margin expansion of 50 basis points year-over-year. Strength was most pronounced in our Health & Science Technologies or HST segment, where secular drivers continue to fuel growth across high-value applications in data center, semiconductor, and space and defense markets. The strong backlog build in HST improves our visibility to deliver continued solid growth for the balance of the year and into 2027. Finally, orders in our Fluid & Metering Technologies or FMT segment grew 9% organic year-over-year.
Taking our Q1 performance and backlog build into account, we are raising our full year 2026 financial outlook. Before turning it over to Sean, I'd like to walk through a live example of IDEX's capabilities to drive long-term value as 80/20 drives growth, margins, and earnings. Space and defense is a prime example of faster-growing, durable end markets where we are increasingly deploying resources in the HST segment to expand our opportunity set. These markets benefit from growing demand for space-based connectivity and breakthrough defense technologies with long program lives and rising system complexity creating a multiyear growth runway.
| Metric | Period | Current guidance |
|---|---|---|
| Organic growth | FY2026 | 3%-4% (Raised) |
| Adjusted EBITDA margin | FY2026 | 26.5%-27% (Unchanged) |
| Adjusted EPS | FY2026 | $8.35-$8.55 (Raised by $0.20) |
| Free cash flow conversion | FY2026 | At least 100% annually (Reaffirmed) |
| Organic growth | Q2 2026 | 3%-4% (New) |
| Adjusted EBITDA margin | Q2 2026 | 26.5%-27% (New) |
| Adjusted EPS | Q2 2026 | $2.07-$2.12 (New) |
| Metric | YoY | Note |
|---|---|---|
| Consolidated organic sales | +5% | Balanced between volume and price contribution, with notable strength in HST |
| HST organic revenue | +11% | Higher volumes in advantage markets including semiconductor OE and consumables, data center applications, space and defense, and pharma |
| HST organic orders | +17% | Secular demand and backlog build in data center, semiconductor, and space and defense |
| FMT organic sales | +2% | Supported by intelligent water platform; partially offset by global softness in chemical end markets |
| FMT organic orders | +9% | Strength in water platform and mining, with some demand pulled forward from Q2 |
| FSDP organic sales | -1% | Fire & Safety grew high single digit but was offset by an expected decline in dispensing on tough project comps |
| FSDP organic orders | -4% | Decline in dispensing project volumes in North America and Asia |
| Adjusted gross margin | -40 bps to 44.9% | Productivity gains and volume leverage more than offset by unfavorable mix |
| Adjusted EBITDA margin | +50 bps to 26% | Productivity gains, volume leverage, and positive price cost more than offset negative mix |
| Free cash flow | -$5M to $86M | Higher working capital investment due to higher growth; seasonally lowest cash period |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| 80/20 as a growth tool | Used for focus, margins, and execution for over a decade | Increasingly applied to segment markets, reallocate capital and talent to highest-value opportunities, and codified across integrated growth platforms (two-axis to three-axis) | Expanding |
| Space and defense | Early incumbency position established over the prior decade | Highlighted as a prime advantage market with multiyear growth runway across optics, Mott filtration, and engineered components | Accelerating |
| AI-driven demand | — | Strongest in power generation for data centers, semiconductor manufacturing, and optical switching | Strengthening |
| Life sciences in HST | Pressure from China and NIH/academic funding noted in prior quarters | Flattish to slightly down, low single-digit core growth, expected to improve through the fiscal year | Stable/pressured |
| Short-cycle industrial recovery | Soft general industrial markets | Cadence improved through the quarter (weak January, better February, strong March, held in April) but not uniform across diagnostic businesses | Improving but guarded |
| Capital deployment | Balanced approach across organic investment, bolt-on M&A, and shareholder returns | $76M buyback per quarter committed for 2026, active bolt-on M&A pipeline, dividends maintained | Consistent |
| Tariffs and price cost | Tariff-related pricing actions in prior quarters drove larger positive price cost | Net positive but smaller magnitude; no second-round price actions contemplated in current guide | Moderating |