IDEX’s second quarter results were marked by better-than-expected revenue and non-GAAP profitability, but the market responded negatively, with shares declining significantly following the report. Management attributed the quarter’s performance to strong execution across its business segments, especially in data center, pharmaceutical, and defense applications. However, CEO Eric Ashleman noted that “unpredictable trade policy changes and tariff announcements” led to dynamic swings in customer order patterns, freezing some large orders and creating volatility in demand. This environment, particularly in recently acquired businesses, slowed growth and contributed to a less favorable outlook for the remainder of the year.
Is now the time to buy IEX? Find out in our full research report (it’s free).
IDEX (IEX) Q2 CY2025 Highlights:
- Revenue: $865.4 million vs analyst estimates of $857.5 million (7.2% year-on-year growth, 0.9% beat)
- Adjusted EPS: $2.07 vs analyst estimates of $1.99 (4% beat)
- Adjusted EBITDA: $237.2 million vs analyst estimates of $229.4 million (27.4% margin, 3.4% beat)
- Revenue Guidance for Q3 CY2025 is $818.2 million at the midpoint, below analyst estimates of $866.8 million
- Management lowered its full-year Adjusted EPS guidance to $7.90 at the midpoint, a 4.5% decrease
- Operating Margin: 21.7%, in line with the same quarter last year
- Organic Revenue rose 1.2% year on year (-4% in the same quarter last year)
- Market Capitalization: $11.86 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From IDEX’s Q2 Earnings Call
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Nathan Hardie Jones (Stifel): Asked about confidence in recovering delayed semiconductor and large orders. CEO Eric Ashleman indicated recent order recovery in July gave “better feel as we enter the back half of the year,” but acknowledged ongoing unpredictability.
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Vladimir Bystricky (Citigroup): Sought clarity on whether guidance assumes stable trends or further volatility. Ashleman replied that assumptions are for steadiness in most segments, but fourth-quarter growth in Mott is now moderated to reflect delayed order flow.
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Deane Dray (RBC Capital Markets): Probed the extent to which guidance cuts are concentrated in Mott. Ashleman said the delta was primarily in Mott’s delayed order conversion and mix issues in the MSS group, with some trailing impact from small order patterns.
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Michael Halloran (Baird): Asked if the shift in guidance reflects deteriorating conditions or just slower acceleration. Ashleman confirmed it was timing-related, not due to a fundamental change in outlook, and recent customer conversations suggest a more predictable pattern ahead.
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Joe Giordano (TD Cowen): Questioned the change in management messaging regarding dependence on large semi orders for margin recovery. Ashleman explained the guidance now reflects “unrealized acceleration” in high-margin Muon business and delayed Mott orders, with strong long-term funnels remaining.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will focus on (1) the pace of order recovery in semiconductor and data center applications, (2) evidence that cost containment and price increases are offsetting tariff and mix pressures on margins, and (3) integration and performance of recent tuck-in acquisitions like Micro-LAM and Mott. Monitoring further trade policy developments and their effects on customer order patterns will also be essential for assessing the company’s progress.
IDEX currently trades at $160.29, down from $185.59 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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