IDEX CORP /DE/ (IEX)

CIK: 0000832101. SIC: 3561 Pumps & Pumping Equipment. Latest 10-K as of: 2026-02-19.

SIC breadcrumb: Manufacturing > Industrial And Commercial Machinery And Computer Equipment > SIC 3561 Pumps & Pumping Equipment

SEC company page: https://www.sec.gov/edgar/browse/?CIK=832101. Latest filing source: 0000832101-26-000003.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-19. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000832101.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

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Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-19. Report date: 2025-12-31.

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the Company’s Consolidated Financial Statements and related notes in this annual report. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. The Company’s actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under Item 1A, “Risk Factors” and under the heading “Cautionary Statement Under the Private Securities Litigation Reform Act” discussed elsewhere in this annual report.

This discussion includes certain non-GAAP financial measures that have been defined and reconciled to the most directly comparable financial measure prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) under the headings “Non-GAAP Disclosures” and “Free Cash Flow.” This discussion also includes Operating working capital which has been defined under the heading “Liquidity and Capital Resources.” The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures prepared in accordance with U.S. GAAP. The financial results prepared in accordance with U.S. GAAP and the reconciliations from these results should be carefully evaluated.

Overview

IDEX is an applied solutions provider specializing in the manufacturing of health and science technologies, fluid and metering technologies, and fire, safety and other diversified products built to customers’ specifications. IDEX’s products are sold in niche markets across a wide range of industries throughout the world. Accordingly, IDEX’s businesses are affected by levels of industrial activity and economic conditions in the U.S. and in other countries where it does business, as well as by the relationship of the U.S. Dollar to other currencies. Levels of capacity utilization and capital spending in certain markets and overall industrial activity are important factors that influence the demand for IDEX’s products.

2025 Highlights

(All comparisons are against 2024 unless otherwise noted)

•Record reported Net sales of $3,457.5 million increased 6% overall and increased 1% organically*

•Reported diluted earnings per common share (“EPS”) attributable to IDEX of $6.41 decreased 3%

•Adjusted diluted EPS attributable to IDEX* of $7.95 increased 1%

•Operating cash flow of $680.4 million increased 2% and was 141% of net income, up from 132%

•Free cash flow* of $616.8 million increased 2% and was 103% of adjusted net income*, up from 101%

•Returned capital to shareholders in the form of $248 million of share repurchases and $213 million of dividends

*These are non-GAAP measures. See the definitions of these non-GAAP measures and reconciliations to their most directly comparable U.S. GAAP financial measures under the headings “Non-GAAP Disclosures” and “Free Cash Flow.”

During 2025, the Company delivered organic sales growth and margin expansion as positive price across all segments more than offset lower volumes in the FMT and FSDP segments. Improved operational results included productivity improvements together with platform optimization savings resulting from restructuring and other cost containment actions taken during 2025. Results were tempered by higher interest expense, the absence of certain tax benefits recognized in 2024 as well as higher amortization on acquisition related intangibles assets. The Company generated strong cash flow and continued to deploy capital, including nearly $250 million of share repurchases during the year.

2026 Outlook

Looking ahead, the Company plans to continue strengthening its position in targeted advantaged markets by further integrating its capabilities and advancing its 8020 operating framework. These initiatives are designed to support sustained organic growth while enabling disciplined bolt‑on acquisitions. At the same time, the Company remains committed to a balanced capital deployment strategy that includes returning capital to shareholders.

Within the HST segment, the Company anticipates continued growth supported by robust demand across data center, semiconductor, space and defense, and food and beverage and pharmaceutical end markets. By contrast, the industrial and automotive businesses have yet to experience a meaningful recovery in demand. In the FMT segment, the Company expects continued momentum in the Water businesses. However, core industrial markets continue to track flat, and the Company is monitoring softer demand trends across chemical, energy and agricultural applications. For the FSDP segment, near‑term headwinds are expected to persist due to ongoing weakness in Fire & Safety markets outside the United States and subdued

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capital spending in Dispensing. BAND‑IT is generally performing in line with the Company’s other industrial businesses, trending flat to start the year.

Results of Operations

The following is a discussion and analysis of the Company’s results of operations for the year ended December 31, 2025 compared with the year ended December 31, 2024. For the discussion related to the consolidated results of operations for the year ended December 31, 2024 compared with the year ended December 31, 2023, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 20, 2025.

Year Ended December 31,

Change

(In millions, except per share amounts)

2025

2024

$

% / bps

Domestic sales

$

1,760.8

$

1,618.1

$

142.7 

9

%

International sales

1,696.7

1,650.7

46.0 

3

%

Net sales

3,457.5

3,268.8

188.7 

6

%

Cost of sales

1,918.7

1,823.6

95.1 

5

%

Gross profit

1,538.8

1,445.2

93.6 

6

%

Gross margin

44.5

%

44.2

%

n/a

30 bps

Selling, general and administrative expenses

818.8

758.7

60.1 

8

%

Restructuring expenses and asset impairments

20.7

9.3

11.4 

123

%

Operating income

699.3

677.2

22.1 

3

%

Gain on sale of businesses - net

—

(4.0)

4.0 

(100

%)

Other expense (income) – net

2.3

(2.6)

4.9 

(188

%)

Interest expense - net

64.4

44.5

19.9 

45

%

Income before income taxes

632.6

639.3

(6.7)

(1

%)

Provision for income taxes

150.1

134.7

15.4 

11

%

Effective tax rate

23.7

%

21.1

%

n/a

260 bps

Net income attributable to IDEX

$

483.2

$

505.0

$

(21.8)

(4

%)

Diluted earnings per common share attributable to IDEX

$

6.41

$

6.64

$

(0.23)

(3

%)

Net Sales

Net sales increased compared to the prior year as a result of contributions from the acquisition of Mott Corporation and its subsidiaries (“Mott”) as well as from organic sales and favorable impacts from foreign currency. Organic sales increased 1% primarily driven by positive price across all segments. Lower volumes in our FMT and FSDP segments were only partly mitigated by higher volumes in our HST segment.

Gross Profit and Gross Margin

Gross profit and Gross margin were positively impacted by price/cost and operational productivity improvements, and were negatively impacted by volume deleverage and unfavorable mix. Operational productivity improvements include platform optimization savings resulting from restructuring actions and other cost containment actions taken in 2025, which largely offset increases in other employee-related costs. Gross profit was also positively impacted by acquisitions, net of divestitures.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased primarily due to the $51.0 million impact from acquisitions, net of divestitures, including amortization.

Restructuring Expenses and Asset Impairments

Restructuring expenses and asset impairments primarily relate to severance expense for restructuring actions taken during both periods. Severance costs in 2025 were incurred in conjunction with organizational changes, primarily designed to connect scalable groups of businesses, which resulted in a reduction of headcount. Additionally, the Company eliminated certain

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management layers in select areas. For additional information regarding restructuring expenses and asset impairments, refer to Note 14, “Restructuring Expenses and Asset Impairments,” in the Notes to Consolidated Financial Statements.

Gain on Sale of Businesses - Net

In 2024, the Company completed the sale of Alfa Valvole, Srl (“Alfa Valvole”) for proceeds of $45.1 million, net of cash remitted, resulting in a gain on the sale of $4.0 million, net of a release of cumulative foreign currency translation losses of $5.5 million. For additional information, refer to Note 2, “Acquisitions and Divestitures,” in the Notes to Consolidated Financial Statements.

Other Expense (Income) – Net

Other expense (income) – net in both periods primarily reflects the impact of foreign currency transactions.

Interest Expense - Net

Interest expense - net increased primarily due to the impact of higher debt outstanding in connection with financing the acquisition of Mott. For additional information, refer to Note 7, “Borrowings,” in the Notes to Consolidated Financial Statements.

Income Taxes

The 2025 effective tax rate was 23.7% as compared to the 2024 effective tax rate of 21.1%. The increase in the rate was primarily due to legislation enacted in 2025, which lowered tax benefits from certain foreign sourced income and increased state income taxes. Additionally, the mix of earnings in higher tax rate jurisdictions increased taxes and discrete tax items were less favorable than in the prior year period. For additional information, refer to Note 12, “Income Taxes,” in the Notes to Consolidated Financial Statements.

The One Big Beautiful Bill Act (“OBBBA”) was signed into law on July 4, 2025. Key income tax related provisions of the OBBBA impacting the Company include the repeal of mandatory capitalization of research and development expenditures under Internal Revenue Code Section 174, extension of bonus depreciation, and revisions to international tax regimes. The Company has reflected the tax impacts of the OBBBA legislation and estimates an immaterial impact on the Company’s Consolidated Financial Statements. The Company will continue to evaluate the impacts of the OBBBA as more guidance becomes available.

In October 2021, members of the Organization for Economic Co-operation and Development (“OECD”) and G20 Inclusive Framework on Base Erosion and Profit Shifting agreed to a two-pillar solution to address the tax challenges associated with the digitalization of the economy. In December 2021, the OECD released the Pillar Two Model Rules (“Pillar Two”), which define the global minimum tax and call for the taxation of large corporations at a minimum rate of 15%. While it is uncertain whether the United States will enact legislation to adopt Pillar Two, certain countries in which we operate have enacted legislation, and other countries are in the process of introducing draft legislation to implement the minimum tax directive. Many aspects of Pillar Two became effective January 1, 2025; however, nearly all of the jurisdictions in which IDEX operates have an effective tax rate above the 15% threshold. Therefore, the Company does not expect a material impact from the Pillar Two income tax rules. We are continuing to monitor legislative developments and evaluate financial results for changes in the expected impact.

Results of Reportable Business Segments

The Company has three reportable segments: HST, FMT and FSDP. For a detailed description of the operations within each segment, please refer to Part I, Item 1, “Business” of this Annual Report on Form 10-K.

Management’s measurements of segment performance are Net sales, adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”) and Adjusted EBITDA margin.

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Health & Science Technologies Segment

Year Ended December 31,

Components of Change

(In millions)

2025

2024

Change

Organic

Acq/Div(1)

Foreign Currency

Total

Domestic sales

$

695.7

$

573.7

21

%

International sales

799.8

724.4

10

%

Net sales

$

1,495.5

$

1,298.1

15

%

4

%

10

%

1

%

15

%

Adjusted EBITDA

397.8

346.8

15

%

8

%

6

%

1

%

15

%

Adjusted EBITDA margin

26.6

%

26.7

%

(10) bps

90 bps

(100) bps

— bps

(10) bps

(1) Acquisitions included Mott acquired in September 2024 and Micro-LAM, Inc. (“Micro-LAM”) acquired in July 2025.

•Organic sales reflected positive price and favorable volumes driven by higher volumes in the Company’s data center, semiconductor consumables and space and defense businesses as well as 8020-driven commercial initiatives, partially offset by lower volumes in the Company’s semiconductor OEM, industrial and automotive businesses.

•Adjusted EBITDA margin decreased slightly, reflecting net productivity improvements, including platform optimization savings and cost containment, favorable price/cost and volume leverage, which largely mitigated the impact of acquisitions, unfavorable mix and higher variable compensation.

Fluid & Metering Technologies Segment

Year Ended December 31,

Components of Change

(In millions)

2025

2024

Change

Organic

Acq/Div(1)

Foreign Currency

Total

Domestic sales

$

693.3

$

693.1

—

%

International sales

530.7

540.1

(2

%)

Net sales

$

1,224.0

$

1,233.2

(1

%)

—

%

(2

%)

1

%

(1

%)

Adjusted EBITDA

406.8

406.3

—

%

—

%

(1

%)

1

%

—

%

Adjusted EBITDA margin

33.2

%

32.9

%

30 bps

20 bps

10 bps

— bps

30 bps

(1) Divestitures included Alfa Valvole, sold in June 2024.

•Organic sales reflected unfavorable volumes in the Company’s chemical, energy, industrial water, agriculture and semiconductor businesses, partially offset by higher volume in the municipal water businesses, which together more than offset the benefit of positive price across the segment.

•Adjusted EBITDA margin increased primarily due to positive price/cost as well as net productivity improvements. These improvements were partially offset by volume deleverage and unfavorable mix. Platform optimization savings and cost containment offset other higher employee-related costs.

Fire & Safety/Diversified Products Segment

Year Ended December 31,

Components of Change

(In millions)

2025

2024

Change

Organic

Acq/Div

Foreign Currency

Total

Domestic sales

$

371.8

$

354.9

5

%

International sales

373.5

389.4

(4

%)

Net sales

$

745.3

$

744.3

—

%

(1

%)

—

%

1

%

—

%

Adjusted EBITDA

213.5

214.2

—

%

(1

%)

—

%

1

%

—

%

Adjusted EBITDA margin

28.7

%

28.8

%

(10) bps

(10) bps

— bps

— bps

(10) bps

•Organic sales reflected positive price, which was more than offset by lower volumes in the Company’s Dispensing and Fire & Safety businesses. Volumes in the Company’s Dispensing business were impacted by the timing of Dispensing

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projects in emerging markets and slower equipment replenishment. Strong North America Fire OEM volumes were more than offset by lower Fire & Safety volumes in Asia.

•Adjusted EBITDA margin decreased primarily due to volume deleverage and unfavorable mix, mostly offset by price/cost and net productivity improvements, including platform optimization savings and cost containment.

Liquidity and Capital Resources

Liquidity

Based on management’s current expectations and currently available information, the Company believes current cash, cash from operations and cash available under the Revolving Facility will be sufficient to meet its cash requirements, including funding of working capital, planned capital expenditures, interest and principal payments on all borrowings, pension and postretirement funding requirements, share repurchases and quarterly dividend payments to holders of the Company’s common stock for the foreseeable future. Additionally, in the event that suitable businesses are available for acquisition upon acceptable terms, the Company may obtain all or a portion of the financing for these acquisitions through the incurrence of additional borrowings. The Company believes that additional borrowings through various financing alternatives remain available, if required.

Select key liquidity metrics at December 31, 2025 are as follows:

(In millions)

December 31, 2025

Working capital

$

1,067.8 

Current ratio

2.9 to 1

Cash and cash equivalents

$

580.0 

Cash held outside of the United States

526.2 

Revolving Facility capacity

$

800.0 

Borrowings

228.8 

Letters of credit

2.6 

Revolving Facility availability

$

568.6 

Operating Working Capital

Operating working capital, calculated as Receivables – net plus Inventories – net minus Trade accounts payable, is used by management as a measurement of operational results as well as the short-term liquidity of the Company. The following table details Operating working capital as of December 31, 2025 and 2024:

(In millions)

December 31, 2025

December 31, 2024

Change

Organic Change

Receivables – net

$

521.7 

$

465.9 

$

55.8 

$

41.2 

Inventories – net

479.4 

429.7

49.7 

34.2 

Less: Trade accounts payable

224.7 

197.8 

26.9 

17.0 

Operating working capital

$

776.4 

$

697.8 

$

78.6 

$

58.4 

Foreign currency translation, slightly offset by the impact of acquisitions, increased Operating working capital by $20.2 million during 2025. Apart from these items, the primary drivers of the change in Operating working capital were higher receivables, driven by price and the timing of shipments, and higher inventories, which increased early in the year to support planned production.

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Cash Flow Summary

The following table is derived from the Consolidated Statements of Cash Flows:

Year Ended December 31,

(In millions)

2025

2024

Change

Net cash flows provided by (used in):

Operating activities

$

680.4 

$

668.1 

$

12.3 

Investing activities

(137.6)

(1,006.5)

868.9 

Financing activities

(632.6)

465.9 

(1,098.5)

Operating Activities

Operating cash flows increased $12.3 million in 2025 primarily due to improved operational results, lower cash payments for taxes and timing of customer deposits and project deliveries impacting the prior year period. These increases were partly offset by higher working capital as discussed under the heading “Operating Working Capital” above, higher interest payments primarily as a result of the issuance of the 4.950% Senior Notes (as defined in Note 7, “Borrowings,” in the Notes to Consolidated Financial Statements) during the third quarter of 2024 to fund the acquisition of Mott as well as higher severance payments made in conjunction with the organizational changes during 2025.

Investing Activities

Cash used in investing activities decreased $868.9 million in 2025 as compared to the prior year period driven by $863.2 million of lower net spending on business acquisitions, net of divestitures, in the current year period, primarily due to the acquisition of Mott and the sale of Alfa Valvole during the prior year period. See further details on the Company’s acquisition activity in Note 2, “Acquisitions and Divestitures,” in the Notes to Consolidated Financial Statements.

Financing Activities

Financing cash flows decreased $1,098.5 million in 2025 to $632.6 million of cash used in financing activities from $465.9 million of cash provided by financing activities. The prior year period included $774.3 million of net proceeds in connection with the financing of the Mott acquisition. The current year period included $247.8 million of share repurchases, $51.8 million of higher net payments on debt, lower proceeds from stock option exercises, net of shares withheld for taxes, which decreased $17.2 million, and $7.3 million of higher dividends paid to shareholders, as compared to the prior year period.

Free Cash Flow

The Company believes free cash flow, a non-GAAP measure, is an important measure of performance because it provides a measurement of cash generated from operations that is available for payment obligations such as operating cash requirements, planned capital expenditures, interest and principal payments on all borrowings, pension and postretirement funding requirements and quarterly dividend payments to holders of the Company’s common stock as well as for funding acquisitions and share repurchases. Free cash flow is calculated as cash flows provided by operating activities less capital expenditures. Free cash flow conversion, also a non-GAAP measure, is calculated as free cash flow divided by adjusted net income attributable to IDEX.

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The following table reconciles cash flows provided by operating activities to free cash flow:

Year Ended December 31,

(In millions)

2025

2024

Cash flows provided by operating activities

$

680.4

$

668.1

Less: capital expenditures

63.6

65.1

Free cash flow

$

616.8

$

603.0

Reported net income attributable to IDEX

$

483.2

$

505.0

Adjusted net income attributable to IDEX*

599.5

598.5

Operating cash flow as a percent of net income

141

%

132

%

Free cash flow conversion

103

%

101

%

*This is a non-GAAP measure. See the definition of this non-GAAP measure and reconciliation to its most directly comparable U.S. GAAP financial measure under the heading “Non-GAAP Disclosures.”

Cash Requirements

Subsequent Borrowings Activity

Subsequent to December 31, 2025, the Company had net borrowings on the Revolving Facility of $58.2 million.

Subsequent Share Repurchases

Subsequent to December 31, 2025, the Company repurchased 0.2 million shares at a cost of $38.1 million.

Contractual Obligations

The Company’s cash requirements under contractual obligations include:

•Borrowings and related interest - See Note 7, “Borrowings,” in the Notes to Consolidated Financial Statements for further detail of the Company’s debt and timing of expected future principal payments.

•Rental payments for leases - See Note 9, “Leases,” in the Notes to Consolidated Financial Statements for further detail of our obligations and the timing of expected future payments.

•Purchase obligations - The Company enters into purchase orders with vendors and other parties in the ordinary course of business. As of December 31, 2025, the Company’s purchase obligations, consisting primarily of inventory commitments, totaled approximately $326.2 million, of which $290.1 million is expected to be settled during 2026 and the remainder thereafter.

•Pension and post-retirement medical benefit plans - See Note 17, “Retirement Benefits,” in the Notes to Consolidated Financial Statements for further detail of our obligations and the timing of expected future payments.

•Contingent consideration - In connection with the acquisition of Micro-LAM, the Company entered into an earnout agreement and may be required to pay contingent cash consideration upon the achievement of certain financial performance targets. See Note 8, “Fair Value Measurements,” in the Notes to Consolidated Financial Statements for further detail of our contingent consideration obligations.

Capital Expenditures

Capital expenditures generally include machinery and equipment that support growth and improved productivity, tooling, business system technology, replacement of equipment and investments in new facilities. The Company believes it has sufficient operating cash flows to continue to meet current obligations and invest in planned capital expenditures. Cash flows from operations were more than adequate to fund capital expenditures of $63.6 million and $65.1 million in 2025 and 2024, respectively.

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Share Repurchases

On September 17, 2025, the Company’s Board of Directors authorized the repurchase of an additional $635.0 million of the Company’s common shares. This approval is in addition to the prior repurchase authorization of the Company’s Board of Directors of $500.0 million on March 17, 2020. In 2025, the Company repurchased 1.4 million shares at a cost of $252.4 million (including estimated excise taxes of $2.4 million, which will be paid in 2026), of which $2.2 million was settled in January 2026. There were no share repurchases in 2024. As of December 31, 2025, the amount of share repurchase authorization remaining was $924.7 million, excluding fees, commissions, excise taxes and other expenses related to such common stock repurchases. For additional information regarding the Company’s share repurchase program, refer to Note 11, “Share Repurchases,” in the Notes to Consolidated Financial Statements and Item 5 “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.”

Dividends

The Company increased its quarterly cash dividend by 3% from $0.69 per common share in 2024 to $0.71 per common share in 2025. Total dividend payments to common shareholders were $212.6 million in 2025 compared with $205.3 million in 2024.

Covenants

The key financial covenants that the Company is required to maintain in connection with the Revolving Facility and the 5.13% Senior Notes are a minimum interest coverage ratio of 3.0 to 1 and a maximum leverage ratio of 3.50 to 1. At December 31, 2025, the Company was in compliance with both of these financial covenants, as the Company’s interest coverage ratio was 13.13 to 1 for covenant calculation purposes and the leverage ratio was 1.96 to 1. There are no financial covenants relating to the 2.625% Senior Notes, the 3.00% Senior Notes or the 4.950% Senior Notes (each as defined in Note 7, “Borrowings” in the Notes to Consolidated Financial Statements); however, all are subject to cross-acceleration provisions. For a discussion of the Company’s Revolving Facility and Senior Notes as well as the associated covenants, refer to Note 7, “Borrowings,” in the Notes to Consolidated Financial Statements.

Credit Ratings

The Company’s credit ratings, which were independently developed by the following credit agencies, are detailed below:

•S&P Global Ratings reaffirmed the Company’s corporate credit rating of BBB (stable outlook) in September 2024.

•Moody’s Investors Service affirmed the Company’s corporate credit rating of Baa2 (stable outlook) in August 2024.

•Fitch Ratings reaffirmed the Company’s corporate credit rating of BBB+ (stable outlook) in September 2025.

Off-Balance Sheet Arrangements

The Company had $21.4 million of letters of credit as of December 31, 2025, primarily issued as security for insurance and other performance obligations. Of the $21.4 million of letters of credit, only $2.6 million reduced the Company’s borrowing capacity under the Revolving Facility as of December 31, 2025.

Except as disclosed above, the Company has no off-balance sheet arrangements that currently have or are reasonably likely to have a material effect on the Company’s consolidated financial condition, changes in financial condition, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Estimates

The Company believes that the application of the following accounting policy, which is important to its financial position and results of operations, requires significant judgments and estimates on the part of management. For a summary of the Company’s accounting policies, including the accounting policy discussed below, see Note 1, “Significant Accounting Policies,” in the Notes to Consolidated Financial Statements.

Goodwill and indefinite-lived intangible assets — Goodwill and other intangible assets with indefinite lives, which consists solely of trade names, are not amortized; rather they are tested for impairment at least annually, or more frequently if events or circumstances indicate that the asset may be impaired. The Company follows the guidance prescribed in Accounting Standards

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Codification (“ASC”) 350, Goodwill and Other Intangible Assets, to test goodwill and indefinite-lived intangible assets for impairment. In assessing goodwill for impairment, the Company determines the fair value of each reporting unit utilizing an income approach (discounted cash flows) weighted 50% and a market approach (consisting of a comparable public company multiples methodology) weighted 50%. To determine the reasonableness of the calculated fair values, the Company reviews the assumptions to ensure that neither the income approach nor the market approach yielded significantly different valuations. Key assumptions and estimates used in the goodwill impairment assessment are described below. Based on the results of the Company’s annual impairment test at October 31, 2025, all reporting units had fair values substantially in excess of their carrying values.

The key assumptions are updated every year for each reporting unit for the income and market approaches used to determine the fair value. Various assumptions are utilized including forecasted operating results, annual operating plans, strategic plans, economic projections, anticipated future cash flows, the weighted average cost of capital, market data and market multiples. The assumptions that have the most significant effect on the fair value calculations are the weighted average cost of capital, market multiples, forecasted cash flows and terminal growth rates. The following assumption ranges were utilized by the Company in 2025 and 2024:

Assumptions

2025

Range

2024

Range

Weighted average cost of capital

9.25% to 10.5%

9.25% to 9.75%

Market multiples

11.0x to 17.0x

12.0x to 19.0x

Terminal growth rates

3.0% to 3.5%

3.0% to 3.5%

In assessing trade names for impairment, the Company uses the relief-from-royalty method, a form of the income approach, to determine the fair value of its trade names. The relief-from-royalty method is dependent on a number of significant management assumptions, including estimates of revenues, royalty rates and discount rates. Based on the results of the Company’s annual impairment test at October 31, 2025, the trade names had fair values in excess of their carrying values.

The Company’s acquisitions have generally included significant goodwill components and the Company expects to continue to make acquisitions. At December 31, 2025, goodwill and other indefinite-lived intangible assets totaled $3,505.4 million, or 51%, of the Company’s total assets.

See Note 6, “Goodwill and Intangible Assets,” in the Notes to Consolidated Financial Statements for further discussion on goodwill and indefinite-lived intangible assets.

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Non-GAAP Disclosures

Set forth below are reconciliations of Organic sales, Adjusted gross profit, Adjusted gross margin, Adjusted net income attributable to IDEX, Adjusted diluted EPS attributable to IDEX, Consolidated Adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”) and Consolidated Adjusted EBITDA margin to their respective most directly comparable U.S. GAAP measure. Management uses these metrics to measure performance of the Company since they exclude items that are not reflective of ongoing operations, as identified in the reconciliations below. Management also supplements its U.S. GAAP financial statements with adjusted information to provide investors with greater insight, transparency and a more comprehensive understanding of the information used by management in its financial and operational decision making.

Management uses Adjusted EBITDA as its measure of segment performance, and believes it is a useful indicator of the strength and performance of the Company and its segments’ ongoing business operations, as well as a way for investors to evaluate and compare operating performance and value companies within the Company’s industry. Management believes that Adjusted EBITDA margin is useful for the same reason as Adjusted EBITDA. The definition of Adjusted EBITDA used here may differ from that used by other companies.

This report also references free cash flow and free cash flow conversion. These non-GAAP measures are discussed and reconciled to their most directly comparable U.S. GAAP measure in the section above titled “Free Cash Flow.”

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures prepared in accordance with U.S. GAAP. Due to rounding, numbers presented throughout this and other documents may not add up or recalculate precisely. The financial results prepared in accordance with U.S. GAAP and the reconciliations from these results should be carefully evaluated.

1. Reconciliations of the Change in Net Sales to Organic Sales

For the Years Ended December 31,

2025

2024

HST

FMT

FSDP

IDEX

HST

FMT

FSDP

IDEX

Change in net sales

15

%

(1

%)

—

%

6

%

(1

%)

(1

%)

4

%

—

%

Less:

Net impact from acquisitions/divestitures(1)

10

%

(2

%)

—

%

4

%

6

%

(1

%)

—

%

2

%

Impact from foreign currency(2)

1

%

1

%

1

%

1

%

—

%

—

%

—

%

—

%

Change in organic sales

4

%

—

%

(1

%)

1

%

(7

%)

—

%

4

%

(2

%)

(1) Represents the sales from acquired or divested businesses during the first 12 months of ownership or prior to divestiture.

(2) The portion of sales attributable to foreign currency translation is calculated as the difference between (a) the period-to-period change in organic sales, and (b) the period-to-period change in organic sales after applying prior period foreign exchange rates to the current year period.

2. Reconciliations of Reported-to-Adjusted Gross Profit and Gross Margin (in millions)

For the Years Ended December 31,

2025

2024

Gross profit

$

1,538.8

$

1,445.2

Fair value inventory step-up charges

0.6

9.6

Adjusted gross profit

$

1,539.4

$

1,454.8

Net sales

$

3,457.5

$

3,268.8

Gross margin

44.5

%

44.2

%

Adjusted gross margin

44.5

%

44.5

%

3. Reconciliations of Reported-to-Adjusted Net Income Attributable to IDEX and Diluted EPS Attributable to IDEX (in millions, except per share amounts)

For the Years Ended December 31,

2025

2024

Reported net income attributable to IDEX

$

483.2 

$

505.0 

Fair value inventory step-up charges

0.6 

9.6 

Tax impact on fair value inventory step-up charges

(0.1)

(2.0)

Restructuring expenses and asset impairments(1)

20.4 

9.3 

Tax impact on restructuring expenses and asset impairments

(5.1)

(2.2)

Gain on sale of businesses - net

— 

(4.0)

Tax impact on gain on sale of businesses - net

— 

— 

Loss on sale of assets

1.1 

— 

Tax impact on loss on sale of assets(2)

0.5 

— 

Acquisition-related intangible asset amortization

130.7 

107.1 

Tax impact on acquisition-related intangible asset amortization

(31.8)

(24.3)

Adjusted net income attributable to IDEX

$

599.5 

$

598.5 

Reported diluted EPS attributable to IDEX

$

6.41 

$

6.64 

Fair value inventory step-up charges

0.01 

0.13 

Tax impact on fair value inventory step-up charges

— 

(0.02)

Restructuring expenses and asset impairments(1)

0.27 

0.12 

Tax impact on restructuring expenses and asset impairments

(0.07)

(0.03)

Gain on sale of businesses - net

— 

(0.05)

Tax impact on gain on sale of businesses - net

— 

— 

Loss on sale of assets

0.02 

— 

Tax impact on loss on sale of assets(2)

0.01 

— 

Acquisition-related intangible asset amortization

1.72 

1.41 

Tax impact on acquisition-related intangible asset amortization

(0.42)

(0.31)

Adjusted diluted EPS attributable to IDEX

$

7.95 

$

7.89 

Diluted weighted average shares outstanding

75.3 

75.9 

(1) This adjustment represents the amount of Restructuring expenses and asset impairments attributable to IDEX. Restructuring expenses and asset impairments of $20.7 million on the Consolidated Statements of Income during 2025

included charges of $0.6 million recognized by the Company’s joint venture, $0.3 million of which was attributable to noncontrolling interest.

(2) The loss on sale of assets generated tax expense due to the characterization of the underlying assets sold for tax purposes.

4. Reconciliations of Net Income to Adjusted EBITDA (in millions)

For the Years Ended December 31,

2025

2024

Reported net income

$

482.5

$

504.6

Provision for income taxes

150.1

134.7

Interest expense – net

64.4

44.5

Gain on sale of businesses - net

—

(4.0)

Depreciation

75.8

68.5

Amortization

130.7

107.1

Fair value inventory step-up charges

0.6

9.6

Restructuring expenses and asset impairments

20.7

9.3

Loss on sale of assets

1.1

—

Adjusted EBITDA

$

925.9

$

874.3

Adjusted EBITDA Components

HST

$

397.8

$

346.8

FMT

406.8

406.3

FSDP

213.5

214.2

Corporate and other

(92.2)

(93.0)

Total Adjusted EBITDA

$

925.9

$

874.3

Net sales

$

3,457.5

$

3,268.8

Net income margin

14.0 

%

15.4 

%

Adjusted EBITDA margin

26.8 

%

26.7 

%