Prepared remarks
Hello, and welcome to the Ingersoll Rand Second Quarter 2026 Earnings Call. I would now like to turn the conference over to Max Vorcheimer, Director of Investor Relations. You may begin.
Thank you for joining Ingersoll Rand's Second Quarter 2026 Earnings Call. I'm Max Vorcheimer, Director of Investor Relations. And joining me this morning are Vicente Reynal, our Chairman and CEO; and Vik Kini, our Chief Financial Officer. Our earnings release and presentation were issued yesterday afternoon and are available on the Investor Relations section of our website, where a replay of this call will also be posted. Before we begin, please note that today's discussion will include forward-looking statements subject to the risks and uncertainties described in our SEC filings and on Slide 2 of this presentation, which you should read in conjunction with the information provided on this call. We will also reference certain non-GAAP financial measures. Reconciliations to the most comparable GAAP measures are included in our earnings release and this presentation, both of which are available on the Investor Relations section of our website. Today, we will review our second quarter results, discuss segment performance and provide an update to our full year 2026 guidance. During Q&A, please limit yourself to one question and one follow up to allow time for other participants. With that, I'll turn the call over to Vicente.
Good morning, everyone, and thank you for joining. Before we get started, I wanted to take the opportunity to formally introduce Max Vorcheimer, who has added Investor Relations responsibility to his current role on our M&A team. You will be seeing and hearing from him going forward, and I know he looks forward to engaging with many of you. Beginning on Slide 3, the second quarter and first half overall, reflected continued strong execution and improved demand momentum in our business. In the second quarter, we saw organic order growth of 2%, organic revenue growth of 4% and adjusted EPS growth of 7%, demonstrating the strength and resiliency of our business. Our growth this quarter was broad-based across our diversified end market base. Every main region this quarter delivered positive organic revenue growth, and we continue to focus investments towards durable, structurally growing end markets. Importantly, our first half performance and the healthy demand trends we continue to see across much of the business reinforce our confidence in our outlook for the remainder of the year. As we will walk you through this morning, we are raising our full year revenue guidance and expect adjusted EPS to land towards the higher end of our previously communicated range. We also remain disciplined in our approach to capital allocation. Our acquisition pipeline continues to be robust, including two new announcements today and remains focused on targeted, bolt-on opportunities that strengthen our core technologies, expand our aftermarket presence and enhance our long-term growth profile. Our teams around the world remain focused on controlling what we can control. Through the use of IRX and our economic growth engine, we continue to drive operational execution, support our customers and outperform in the markets we serve. Turning to Slide 4. Before moving to our operational and financial results, I would like to briefly acknowledge the continued recognition we have received for our sustainability leadership and employee ownership culture. During the last year, we were recognized across multiple leading ESG, workplace and corporate citizenship rankings, including joining the 2026 Fortune 500, a milestone that reflects the scale, discipline and momentum we have built as the Ingersoll Rand we are today. These recognitions, reflected in our recently published sustainability report, reflect the strength of our ownership mindset culture and our commitment to making life better for our employees, our customers, our shareholders and our planet. Turning to Slide 5. I am excited today to announce the closing of one acquisition and the signing of another. Just this morning, we closed on the acquisition of Lone Star Blowers, the company referenced as a U.S.-based blower manufacturer in the presentation. Lone Star Blowers expands our expertise in key blower technologies and solutions and expands our aftermarket presence through an established service business and rental fleet. This acquisition will add approximately $50 million in annual revenue. We're also excited to announce the signing of the acquisition of Fai Filtri, a manufacturer of industrial filters based in Italy. This acquisition will expand our filtration capabilities and also strengthen our aftermarket offerings. We expect this acquisition to close in Q4 and add approximately $30 million in annual revenue. Both of these transactions are highly consistent with our strategy of acquiring market-leading technologies that strengthen our core while maintaining disciplined valuation standards. Notably, both acquisitions strengthened our aftermarket capabilities, a key focus area as we continue to increase the resiliency and recurring revenue characteristics of our portfolio. We have 11 additional transactions under LOI and our funnel remains strong, focused on proprietary and internally sourced deals. Our disciplined M&A strategy remains a key differentiator and continues to be an important driver for long-term value creation. Now I'll hand it over to Vik, who will review our financial performance.
Thanks, Vicente. Starting on Slide 6. The second quarter represented another solid quarter of execution. Orders finished just over $2 billion, up 5% year-over-year with organic orders up 2%. Book-to-bill finished at 1.0 turns, slightly lower than we typically see in the second quarter, primarily reflecting the delayed timing of several large project orders. Important to note that we continue to see solid momentum in our short- to medium-cycle business, where orders were up mid-single digits. In addition, we expect these longer cycle projects to recover in the back half of the year, and Vicente will provide some color on what we have seen thus far through July. Revenue grew 9% year-over-year to approximately $2 billion with organic revenue growth of 4%. Aftermarket revenue represented 36% of total revenue during the quarter and continues to be an important contributor to the resiliency of our portfolio. Adjusted EBITDA was $520 million, an increase of 2% year-over-year with an adjusted EBITDA margin of 25.4%. Adjusted EBITDA margin was down 160 basis points year-over-year, with the decline driven primarily by three factors: first, inflationary pressures, particularly in China, where it is more challenging to offset inflation with price; second, continued investment to support growth around new technology and commercial applications; and third, higher corporate costs. The higher corporate costs were largely driven by year-to-date true-up of management incentive costs, reflecting incentive compensation adjustments aligned with performance, which we do not expect to recur at this level in the back half of the year. Unallocated corporate costs were $49 million in the quarter versus $34.6 million a year ago, driven largely by the incentive true-up, and we continue to expect approximately $170 million in corporate costs for the full year. Despite this quarter's year-over-year margin rate pressures, we remain confident in our ability to deliver within our previously communicated adjusted EBITDA range through continued operational execution and productivity actions. In terms of the sequential margin expansion we expect to see in the second half of the year, the margin ramp in the back half of the year is normal course for us as first half pricing actions and benefits from first half productivity projects are realized. We also had the incentive comp true-up here in second quarter that we do not expect to repeat to the same magnitude in the back half of the year. Adjusted EPS was $0.86 for the quarter, up 7% year-over-year. Turning to Slide 7. Free cash flow for the quarter was $269 million, up roughly 28% year-over-year. We ended the quarter with approximately $3.8 billion of total available liquidity, including approximately $1.2 billion of cash and $2.6 billion of available revolving credit facility capacity. Leverage remained at 1.7x, providing significant balance sheet flexibility. During the quarter, we deployed $110 million towards acquisitions and returned approximately $248 million to shareholders through share repurchases and dividends. We were also pleased to receive a one-notch upgrade from Moody's to Baa1 during the quarter, further reinforcing the strength of our balance sheet and capital allocation strategy. Overall, our balance sheet remains a strategic asset and positions us well to continue investing in attractive growth opportunities. One other update I wanted to provide here as you will see disclosed in our 10-Q for the second quarter, we reached an agreement on an initial $187.5 million recovery with certain insurers on the RWI claim that we filed last year related to the ILC Dover transaction. We collected the first $25 million in the second quarter, and this is reflected in free cash flow for the quarter, with the remaining $162.5 million to be received during 2026. This is a significant and favorable initial recovery, and we continue to actively pursue additional meaningful recoveries related to the ILC Dover transaction beyond the $187.5 million. Consistent with our focus on earnings quality, these recoveries are excluded from adjusted earnings and the incremental cash that we expect to collect in the second half of 2026 is not reflected in our free cash flow guidance. We, therefore, view it as pure upside that directly strengthens our capital allocation firepower. I'll now turn the call back to Vicente to discuss our segment performance.
Thanks, Vik. Turning to Slide 8. ITS delivered another solid quarter. Revenue increased nearly 9% year-over-year, including organic revenue growth of 4%. Organic revenue growth was positive across all regions. Orders were approximately flat organically, resulting in a book-to-bill ratio of 1x. Within our compressor business, we continue to see healthy activity particularly in North America, where organic orders were up high single digits. Overall, compressor orders increased by low single digits globally. Organic order growth was impacted by the timing of several long cycle blower and vacuum projects in Europe as well as the continued impact on the Middle East, where specific project activity remains delayed rather than canceled. ITS generated adjusted EBITDA of $435 million with margins of 26.8%. Margin performance was impacted primarily by challenges offsetting inflationary impacts with price, primarily in China, and continued commercial investments to support future growth. For our innovation in action highlight, we're showcasing a plug-and-play on-site nitrogen generation solution that integrates multiple products from our portfolio into a single factory-tested system. The solution enables faster deployment, simplifies commissioning and provides full life-cycle support, demonstrating our ability to leverage the breadth of our technology portfolio to solve critical customer needs. This solution also demonstrates the commercial synergies we continue to realize through M&A. The system combines technologies from our OxyWise, Gardner Denver and York brands into a single integrated solution for customers. Turning to Slide 9. P&ST delivered an excellent quarter and continues to demonstrate the strength of the platform we have built. Orders increased 11% year-over-year, including 7% organic growth. Life Sciences delivered low double-digit organic order growth, while Precision Technologies grew mid-single digits organically. Revenue increased by 8% year-over-year, including 4% organic growth. Importantly, both Life Sciences and Precision Technologies delivered positive organic revenue growth in the quarter. Adjusted EBITDA increased 15% year-over-year to $135 million. Adjusted EBITDA margin expanded 200 basis points year-over-year to 31.5%, reflecting strong execution across the portfolio and the continued benefits of IRX. We're encouraged by the breadth of growth we're seeing across the segment and remain excited about the long-term opportunities within both Life Science and Precision Technologies. For our innovation in action, we're showcasing Dosatron's installation-ready dosing systems. These standardized solutions simplify deployment, improve reliability and reduce installation complexity for customers while supporting strong commercial momentum across the business. I'm also proud to share that following the significant earthquake that recently struck the Philippines, Ingersoll Rand partnered with Planet Water Foundation to deploy safe drinking water stations across the hardest hit areas. Planet Water Foundation is not only a partner but also a valued Dosatron customer as our pumps are a key component of the AquaBlock kiosks that deliver safe drinking water in these situations without the need for electricity. It serves a good reminder of the mission-critical nature of our portfolio and an example of our purpose of making life better in action. Turning to Slide 10. Given our momentum through the first half of the year, today, we are updating our full year guidance. Starting with revenue, we now expect revenue growth of 4.5% to 6.5%, 200 basis points higher at the midpoint, driven primarily by organic volume, reflecting a strong first half and healthy demand, particularly in the short to medium-cycle side of the business. This outlook assumes approximately 1% to 3% organic growth, approximately 2.5% growth from M&A, and approximately 1% growth from FX. We're maintaining our adjusted EBITDA guidance range of $2.13 billion to $2.19 billion. As Vik mentioned, the margin ramp we see in the second half is largely driven by first half pricing actions taking effect, the nonrecurrence of the incentive compensation true-up in Q2 and benefit from stronger productivity in the back half of the year on projects executed in the first half, all of which is normal course and consistent with prior years. Adjusted EPS remains projected at $3.45 to $3.57. And based on our current expectations, we expect results to finish near the high end of the range. Free cash flow conversion is currently expected to remain approximately 95%. The phasing of revenue, adjusted EBITDA and adjusted EPS remains consistent with prior years. One additional clarification on our guidance is that our adjusted EBITDA and adjusted EPS ranges exclude any benefit from IEEPA tariff refunds we expect in the second half of the year, which we will view as upside. We will update guidance once those amounts are materially received. And to give a bit of color on our start to Q3, while we don't guide on orders, I am happy to share that we have had a great start to July, where we have seen double-digit order growth through the first four weeks of the month. We have seen strong realization of several long-cycle orders, which were delayed in the first half across all of our main regions, along with continuation of the short to medium cycle strength that Vik mentioned earlier. We're encouraged in what we're seeing, and we're confident in achieving our updated guidance for the remainder of the year. Finally, on Slide 11. As we conclude this portion of the call, I am encouraged by the momentum we continue to see across the business. Demand remains healthy across the portfolio. Our teams continue to execute at a high level and our M&A pipeline remains robust. We remain well positioned with a strong balance sheet, ample liquidity and significant flexibility to continue investing in growth. IRX remains the backbone of our organization and continues to enable execution and outperformance across the company. As we look ahead in the second half of the year, we believe we're well positioned to continue to deliver durable growth, strong cash flow generation and long-term value creation for our shareholders. Finally, and more important, I want to thank our employees around the world for their continued commitment, dedication and ownership mindset. Your efforts continue to drive our success and help us deliver strong results for all stakeholders. With that, I'll turn the call back to the operator and open the line for questions.
Questions and answers
Your first question comes from Michael Halloran with Baird.
Welcome, Max. So can we talk a little bit about the momentum you're seeing on the short and medium side of things now? Maybe just drill in a little bit more on regional dynamics and then any end markets in particular that you're seeing that momentum. And it seems like you're pretty comfortable that that momentum can sustain as we're exiting the second quarter through July and onward. But any thoughts on how that momentum phases out?
Yes, Mike, let me first give you by region. Americas is roughly 50% of our revenue, and it's been the strongest region so far. ITS orders were up high single digits, healthy compressor activity. And we're seeing the short-cycle indicators that are the best in the portfolio. EMEA is about one-third of the revenue. Orders were down low double digits organically. And I want to be precise about why. It is two things, both timing rather than demand. It is the phasing of some long-cycle project orders in our blower and vacuum side of the business in Europe, and it's also the Middle East. Underneath that, core compressor orders in the region were up low single digits organically, which is a better read on the underlying market. And then Asia Pacific, which is about 15% with China around 10% of total. China organic revenue was up low double digits in the quarter. The volume story there is very good. But as we indicated in the prepared remarks, this continues to be the most challenged market from a pricing perspective, but we're encouraged by how our original equipment is getting into the market, again, in China for China in some very unique applications that we expect will generate some very good aftermarket in future years. From an end market perspective, PST, we mentioned Life Sciences, obviously, up mid-teens, driven mainly in this case by biopharma. Biopharma, we continue to see that low double-digit growth there and are very encouraged about the timing of bringing the full Ingersoll Rand portfolio into biopharma. So not just what we got in PST, but now the team is driving pull-through of other technology into biopharma. And then in ITS, it's broad-based. Americas, we saw momentum in power generation, electricity infrastructure, some air separation for semiconductor. Europe, its resiliency continues in general industrial, food, beverage, the more normal industrial side. We still expect maybe defense picking up here soon. Asia Pacific is growing in electronics, shipbuilding, among others. So you can see a fairly broad-based momentum across many markets.
That makes sense. And then maybe just on the larger projects, I mean you referenced some of it there, the longer cycle projects. Are you at the point where project pushouts are starting to roll through and people are willing to move forward with projects? Are we still seeing delays on a global basis? And how do you think that long-cycle activity plays out as we look forward?
Yes, Mike, that's where we are getting more and more encouraged. For a while, we were talking about this elongation and what we're seeing now is customers becoming more enthusiastic and projects getting moved in a better direction. So we're seeing better momentum on the long-cycle projects.
Your next question comes from Jeff Sprague with Vertical Research.
Just a quick follow-up on the long cycle. First, is there any sort of common thread in what is now being released and previously held up and released perhaps more energy or some other vertical market? Any real common thread you'd point to there?
Yes, Jeff, good point. This is actually one of the more encouraging conversations we're having in terms of energy efficiency. The compressor is typically 30% of the industrial electricity consumption in a manufacturing facility, and it could be higher based on applications. As power prices have moved up, the payback on replacing an older, less-efficient machine is getting shorter. That is one of the key indicators driving better momentum among other factors. Historically, we talked about delays in projects due to engineering capacity or EPC constraints, and a lot of that is now freeing up as well.
Great. And maybe then just a quick one for Vik also. Just on the organic revenue guide, is this primarily a reflection of going after additional price? Or is there actually some improved volume sort of underpinning that bump? And what would the volume improvement be if there is some?
So Jeff, it's more of the latter. It's organic volumes. We were encouraged by what we saw in Q2, with 4% overall organic growth. Volume was relatively healthy, particularly on the short and medium cycle side of the business. So the incremental 1% organic for the full year is really volume driven. We have taken certain pricing actions in the first half of the year consistent with our expectations, and those are starting to materialize into the back half, but the main driver of the upside is volume.
Your next question comes from Nigel Coe with Wolfe Research.
Max, I look forward to meeting you in due course. But just on the orders in July, obviously, really encouraging to see those longer cycle orders starting to kick in. Can I just clarify, when you say double digits, so if we strip out acquisitions, et cetera, we're still seeing double-digit organic orders. Just want to clarify that one, first of all. And then are we seeing the backlog building for '27 given that these are longer cycle projects? Or could these hit in the back half of the year? It doesn't feel like you're baking these orders into the back half of the year.
Yes, Nigel, let me take the first one and let Vik comment about the second one. Organic is low double digit to mid-teens, basically, is what we're seeing here in the month of July.
Nigel, as far as the long-cycle projects, they are definitely building the backlog out for 2027. Most of these long-cycle projects are typically six to 18 months in duration, so they're largely building out the backlog for 2027. That is not to say some won't have revenue recognition in the back half of the year, but we see a solid backlog build more as we move into 2027 with regards to some of those longer cycle projects.
Okay. That's great. And then just maybe a bit more details on the ITS margin momentum through the back half of the year. And can you just maybe clarify, was the margin weakness in the quarter confined to China and the price pressure in China? Or was it a bit more than that?
No, it's really confined to China, basically, in addition to some of the investments that we're making. You saw an announcement earlier in the quarter about a partnership for new technology. We're making investments despite market conditions. On top of that has been the pricing challenge in China.
Your next question comes from Rob Wertheimer with Melius Research.
I wanted to check in on trends in Life Sciences and PST. It seems like you had pretty good orders. The comp was a little bit easy, and there were some cross-currents around the industry that don't seem to have affected you in the quarter. So I wonder if you could just sort of characterize the market. Is it steadily growing? Is it accelerating? How do you see it right now?
Rob, we see good momentum in the Life Science business. It is largely driven by biopharma. Our exposure to GLP-1 is very strong, and as that market continues to grow, we're seeing related investments. We're also investing to play in larger biopharma opportunities and are working on the biopharma expansion that you hear about in the market. Much of that hasn't come to fruition yet, but we're excited about the potential for the second half of this year and into 2027 as new facilities are invested in. Overall, we see continued stability in that market and good growth based on our investments and the focus we're placing on accelerating penetration in biopharma.
Your next question comes from Nathan Jones with Stifel.
I guess I'll ask the same question I asked on most of these calls, Vicente, about quote-to-order times. Obviously, you had a few of these longer cycle projects get delayed in the quarter. But if you exclude those, are you seeing any changes in that quote-to-order time? Maybe in the U.S., you are, maybe in Europe, you're not. But any details you could give us on customers' willingness to accelerate these orders?
I would say, Nathan, nothing dramatically significant. You're seeing the short-cycle business; Vik mentioned mid-single-digit organic order growth on our short-cycle business. We continue to see momentum sequentially and now here in July as well. But in terms of quote-to-order time, I don't think customers are shortening that cycle dramatically for our products or the end markets where we play.
Okay. Fair enough. Maybe just a question on China and pricing power over there. Ingersoll Rand has tended to play in areas and products where it has significant differentiation and can command price. Are there opportunities here for you to consider what you want to sell in China, how you want to sell it and look at the portfolio overall through that lens where maybe some products you're selling in China don't have pricing power and you don't need to be in that business any longer? Anything from that perspective?
We're focused on mission-critical products where total cost of ownership matters. Right now, what you see in China is largely a timing issue. We're spending time localizing newly acquired technologies into China typically under an existing brand we have there. We're not cutting back broadly on the portfolio; rather, we're investing in new technologies where acquired businesses have unique capabilities and success elsewhere. Much of the growth we see in China is related to original equipment, which comes at a lower margin than aftermarket. In some cases, we've entered unique applications with specific customers that we never had before, and we see potential for future aftermarket. We're making commercial investments to penetrate those new China-for-China applications. Overall, we feel good about our product portfolio in China and continue to invest for local opportunities.
Okay. So the pricing issue is more transient than structural?
It is definitely more transient.
Your next question comes from Andy Kaplowitz with Citigroup.
It looks like you've continued to have a nice acceleration in your Precision Technologies business. Could you talk about the durability of that growth? What are the biggest drivers? Precision is mostly comprised of shorter cycle markets. So is it fair to expect continued acceleration from that mid-single-digit growth from here?
Andy, we're very pleased with what's happening in PST. As we indicated at our last Investor Day, this segment should head towards a mid-30s EBITDA profile, and we're making progress on growth and margin expansion. We're encouraged by the trajectory.
Andy, specific to Precision Technologies, you're seeing solid momentum. The business has a comparable look and feel in some respects to ITS: you have shorter-cycle core pump businesses and some longer-cycle project activity as well. Trends there are fairly comparable to what we've seen in ITS, and momentum is solid.
Great. And then on M&A, Vicente, you raised your contribution to 2.5% for '26 from closed deals, which I think puts you right on target for your usual algorithm. There's a couple of nice announcements today. But if I look back at the last few years, you've tended to be a little further along at this point in the year. How would you characterize the M&A environment in general this year versus past years?
The environment is very healthy. Our funnel is strong—over 200 companies in the funnel. Including the transactions announced today, we're about halfway to our annualized acquired revenue commitment. It's difficult to compare cadence year-to-year, but we're making good progress. We have 11 transactions under LOI and healthy activity, all with disciplined pre-synergy multiples.
Your next question comes from Joe Ritchie of Goldman Sachs.
So ITS, I'm curious, would your margins have expanded this quarter absent the China headwind that you described? And as you think about the year, is your expectation that you can hold margins kind of flattish to where ITS margins were a year ago?
Joe, China was without question the biggest negative driver. Absent that, the results would have been much more comparable. On the full year, as we exit the year—particularly in the fourth quarter—we expect to be more in line with prior year or slightly above exit rates from the prior year. On a full-year basis, it's likely a bit below full-year 2025 levels, but we view much of it as timing-oriented. With continued organic volume momentum and transient China items, we expect ITS can approach the earnings power consistent with the 30% EBITDA margin profile discussed at our Investor Day.
Got it. And then Vicente, touching on those longer cycle orders from July, from an end market standpoint, does a particular end market stand out for what's converting into orders? And as you think about your pipeline for the rest of the year, how does that large project pipeline look?
Joe, nothing that stands out as a single end market. The orders are broad-based across food, beverage, pharma, power generation, air separation for semiconductors. We like the blend across multiple end markets. The pipeline for the rest of the year remains consistent with that broad-based mix for long-cycle projects.
Your next question comes from Chris Snyder with Morgan Stanley.
At least on my math, it seems like this back-half margin ramp off of that Q2 base is a bit stronger, at least on the higher end of what you guys typically deliver. It seems a lot of that is driven by price-cost catch-up. Can you talk about the drivers of that sequential margin expansion off Q2? And since it seems mostly driven by price, any color on how much incremental price is coming into the back half following actions you took in Q2?
Chris, we see three main drivers. First is better price realization from actions taken in the first half. Second is normalization of corporate costs; we had an incentive compensation true-up in Q2 that we don't expect to repeat in the back half. Third is productivity and mix benefits: first-half productivity projects and restructuring actions materialize in the back half, with direct material productivity often flowing through more strongly in the fourth quarter. So roughly a third from price realization, a third from corporate normalization, and a third from productivity and mix.
I appreciate that. And tying it to the July order comment, this order inflection came after you put price in, which is constructive. Can you confirm that?
Chris, that's a fair point. Many of the longer cycle projects booked in July have been in the funnel and in active negotiations for some time. It's great to see them finish. Also, July showed continued solid short-cycle momentum. The long cycle likely drove the July inflection, but short-cycle contributed meaningfully as well.
Your next question comes from Amit Mehrotra with UBS.
Following up on the July commentary because I want to make sure the market's expectations are correct. Does the disclosure on long-cycle projects imply a trend you can build on or sustain? Or is it a data point idiosyncratic to a couple of projects that hit in July? I don't want to be here in August or September saying we're back to low single digits because of that dynamic. Can you give a bit of color?
Amit, over several quarters we've spoken about the health of the long-cycle funnel. We've acknowledged elongation, and the July activity shows some of those projects getting to the finish line. I don't think we're implying that the July level is a steady-state expectation, but it demonstrates that the funnel is healthy. Importantly, there were few cancellations; it was mostly timing. That timing is now proving out while the short-cycle side remains constructive. So view July as an inflection that confirms the funnel's health rather than an isolated outlier.
Okay. That's helpful. A lot of our conversation talks about the large compressor, blower and vacuum markets, but you also sell through distribution smaller compressors and power tools. Can you talk about distributor behavior, sell-through, or their willingness to hold more inventory as another leading indicator of trends?
Amit, historically our distributors don't typically hold large inventories because our compressors are often configured for specific applications, even on the smaller side. We tend to configure-to-order or engineer-to-order, so distribution is mostly buy-and-sell fairly quickly, not a heavy inventory channel like some other products.
Your next question comes from Nicole DeBlase with Deutsche Bank.
Maybe digging into the pricing environment a little more. I understand China is challenging, but what are you seeing with respect to pricing in the Americas for compressors? Any shifts in dynamics or market share dynamics as well?
No dramatic changes. Outside of China, pricing dynamics are fairly stable around 1% to 2% price increases that we normally see. We saw order momentum in the Americas with high single-digit growth, which is more volume-driven than pricing-driven. China's situation I would categorize as transitory due to prior years' overcapacity, but we're seeing improving momentum in China as well.
Understood. And then PST margins were definitely a bright spot this quarter. Vik, could you provide your view on how second-half margins look within PST?
We expect continued sequential momentum in PST margins as the year plays out. We were around 31.5% EBITDA margin in Q2 and expect that number to be slightly better in the back half, in the low 32% range if not slightly higher, and moving toward the mid-30s EBITDA margin target we discussed previously.
Your next question comes from Andrew Buscaglia with BNP Paribas.
You indicated you're doing M&A and have LOIs in the background. What is the nature and size of the deals you're looking at? Are valuations attractive for larger-sized deals? Can you give more color?
The 11 LOIs are similar in nature to today's announcements—bolt-on acquisitions with low double-digit pre-synergy multiples. We previously had a couple of approximately $1 billion purchase price opportunities in the funnel but walked away from one due to valuation. We remain disciplined and focused on bolt-ons with attractive economics.
Got it. And my second question is more high level. Given ongoing AI and infrastructure investment, how do you see those trends impacting Ingersoll Rand? Compressors, vacuums, and precision fluid handling are needed in data center-related infrastructure and semiconductor build-out. Where might we see this materialize, in ITS or PST?
Compressors play a role in power generation and electricity infrastructure as those investments pick up. We also have pumps and blowers relevant to water management and closed-loop systems for data centers. Our Precision Technologies segment includes technologies such as natural gas odorization. These broad-based capabilities mean we can play across multiple end markets driven by data center infrastructure investments, though such projects often take time to implement.
This concludes the question-and-answer session. I'll turn the call to Vicente Reynal for closing remarks.
Thank you, Sarah. I just want to say one more time, thank you all for your time and continued interest in Ingersoll Rand. Another special call out and thank you to our employees around the world whose ownership mindset and commitment while executing through IRX helps compound durable long-term value for all of our shareholders, which, by the way, our employees are also share owners of the company. So again, thanks, and we'll talk soon. Appreciate it.
This concludes today's conference call. Thank you for joining. You may now disconnect.