Manufacturing company IDEX (NYSE: IEX) reported revenue ahead of Wall Street’s expectations in Q2 CY2026, with sales up 6.4% year on year to $920.6 million. Guidance for next quarter’s revenue was optimistic at $931.4 million at the midpoint, 2.1% above analysts’ estimates. Its non-GAAP profit of $2.32 per share was 10.1% above analysts’ consensus estimates.
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IDEX (IEX) Q2 CY2026 Highlights:
- Revenue: $920.6 million vs analyst estimates of $905.4 million (6.4% year-on-year growth, 1.7% beat)
- Adjusted EPS: $2.32 vs analyst estimates of $2.11 (10.1% beat)
- Adjusted EBITDA: $258.3 million vs analyst estimates of $242.3 million (28.1% margin, 6.6% beat)
- Revenue Guidance for Q3 CY2026 is $931.4 million at the midpoint, above analyst estimates of $912.2 million
- Management raised its full-year Adjusted EPS guidance to $8.77 at the midpoint, a 3.8% increase
- Operating Margin: 21.7%, in line with the same quarter last year
- Free Cash Flow Margin: 19.2%, up from 17% in the same quarter last year
- Organic Revenue rose 5% year on year
- Market Capitalization: $16.63 billion
Company Overview
Founded in 1988, IDEX (NYSE: IEX) is a global manufacturer specializing in highly engineered products such as pumps, flow meters, and fluidics systems for various industries.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Regrettably, IDEX’s sales grew at a mediocre 7.2% compounded annual growth rate over the last five years. This was below our standard for the industrials sector and is a poor baseline for our analysis.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. IDEX’s recent performance shows its demand has slowed as its annualized revenue growth of 6% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
We can dig further into the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, IDEX’s organic revenue averaged 2.7% year-on-year growth. Because this number is lower than its two-year revenue growth, we can see that some mixture of acquisitions and foreign exchange rates boosted its headline results. 
This quarter, IDEX reported year-on-year revenue growth of 6.4%, and its $920.6 million of revenue exceeded Wall Street’s estimates by 1.7%. Company management is currently guiding for a 6% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 3.5% over the next 12 months, a slight deceleration versus the last two years. This projection is underwhelming and suggests its products and services will see some demand headwinds.
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Operating Margin
IDEX has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 21.7%. This result isn’t surprising as its high gross margin gives it a favorable starting point.
Analyzing the trend in its profitability, IDEX’s operating margin decreased by 2.8 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
This quarter, IDEX generated an operating margin profit margin of 21.7%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.
IDEX’s unimpressive 7.5% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
For IDEX, its two-year annual EPS growth of 3.5% was lower than its five-year trend. We hope its growth can accelerate in the future.
In Q2, IDEX reported adjusted EPS of $2.32, up from $2.07 in the same quarter last year. This print beat analysts’ estimates by 9.9%. Over the next 12 months, Wall Street expects IDEX’s full-year EPS to grow 5.2% from $8.45 to $8.89.
Key Takeaways from IDEX’s Q2 Results
We were impressed by IDEX’s optimistic full-year EPS guidance, which beat analysts’ expectations. We were also glad its EBITDA outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 4.4% to $234.50 immediately after reporting.
Indeed, IDEX had a rock-solid quarterly earnings result, but is this stock a good investment here? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
