# IDEX (IEX) Financial Model Free Excel 3-statement financial model and company analysis for IDEX. - Canonical: https://finamodel.com/companies/idex - Industry: Industrial Equipment - Downloadable model: Yes - Excel download: https://finamodel.com/company-models/IEX.xlsx ## Model Purpose This model provides a comprehensive equity valuation and M&A scenario planning tool to help analysts determine the intrinsic value of IDEX Corporation and forecast its capacity for future bolt-on acquisitions. ## Company Overview IDEX Corporation is a global applied solutions provider that designs and manufactures highly engineered, mission-critical components for niche markets. The company operates a highly decentralised business model, managing over 50 wholly owned subsidiaries through its proprietary 80/20 operational framework to drive margin expansion and portfolio optimisation. Business segments include: * Health & Science Technologies (HST): Approximately 43% of revenue. * Fluid & Metering Technologies (FMT): Approximately 35% of revenue. * Fire & Safety/Diversified Products (FSDP): Approximately 22% of revenue. The company generates revenue evenly split between domestic (51%) and international (49%) markets. IDEX employs an asset-light manufacturing model and holds a strong competitive position in highly specialised, fragmented markets. Recent major events include the acquisition of Mott Corporation and Micro-LAM, which expanded its capabilities in the semiconductor and data centre cooling markets. ## Revenue Deep Dive ### Health & Science Technologies (HST) * Segment name: Health & Science Technologies * Revenue driver formula: End-Market Volume (Semiconductor, Life Sciences, Data Centres) x Average Selling Price * Historical growth rate: 5% to 9% CAGR * Key growth levers and headwinds: Driven by secular trends in AI data centre power solutions, semiconductor consumables, and space and defense. Headwinds include cyclical inventory destocking in life sciences. * Pricing dynamics: High pricing power due to the proprietary, mission-critical nature of the components. * Revenue recognition notes: Primarily recognised at a point in time upon shipment. * Seasonality: Generally stable, with slight upticks in Q4 due to year-end capital budget deployments by customers. ### Fluid & Metering Technologies (FMT) * Segment name: Fluid & Metering Technologies * Revenue driver formula: Industrial Production Volume x Equipment Price * Historical growth rate: 2% to 7% CAGR * Key growth levers and headwinds: Growth is tied to municipal water infrastructure upgrades and energy markets. Headwinds include broader industrial macroeconomic slowdowns. * Pricing dynamics: Strong contractual pricing tied to inflation indices in municipal contracts. * Revenue recognition notes: Point in time recognition for standard pumps and valves; over time for large custom engineering projects. * Seasonality: Stronger in Q2 and Q3 aligning with the Northern Hemisphere construction and infrastructure season. ### Fire & Safety/Diversified Products (FSDP) * Segment name: Fire & Safety/Diversified Products * Revenue driver formula: Municipal Fire Budgets x Equipment Replacement Cycle * Historical growth rate: Flat to 5% CAGR * Key growth levers and headwinds: Driven by municipal tax receipts and infrastructure spending. Dispensing equipment volumes can be volatile based on retail paint store expansions. * Pricing dynamics: Competitive but stable, heavily reliant on long-standing municipal relationships. * Revenue recognition notes: Point in time upon delivery. * Seasonality: Relatively flat, though municipal budget cycles can drive Q1 and Q3 order spikes. ## Cost Structure ### Variable Costs / COGS * COGS includes raw materials (metals, resins), direct manufacturing labour, and factory overhead. * Gross margin range: 43% to 45% over the last 5 years. * Key input costs include specialty metals and electronic components. * COGS scales linearly with volume, though the 80/20 operational framework frequently drives step-function improvements in gross margin by eliminating low-margin product lines. ### Operating Expenses * R&D: Typically 3% to 4% of revenue, expensed as incurred, covering new product engineering. * SG&A: Represents the largest operating expense, heavily driven by headcount and variable compensation. * Depreciation & Amortisation: High as a percentage of revenue due to the amortisation of acquired intangible assets from serial M&A. * Stock-Based Compensation: Runs at approximately 1% to 1.5% of revenue. * Restructuring / one-time charges: Frequent but small, typically related to facility consolidations under the 80/20 framework. ### Margin Profile * Gross margin: 43% to 45%. * Adjusted EBITDA margin: 26% to 28%. * Operating margin: 21% to 23%. * Net margin: 14% to 16%. * Segment Adjusted EBITDA margins: HST (31%), FMT (33%), FSDP (29%). Unallocated corporate costs reduce the consolidated margin. ## Balance Sheet Structure * Total assets are approximately $5.5 billion. * Key asset categories include Goodwill and Intangible Assets, which make up over 60% of total assets due to the company's highly acquisitive history. * Working capital profile: * Days Sales Outstanding (DSO): 45 to 50 days. * Days Inventory Outstanding (DIO): 60 to 70 days. * Days Payable Outstanding (DPO): 40 to 45 days. * Net working capital as a percentage of revenue is typically 12% to 15%. * Working capital is positive and requires investment as the company grows organically. * PP&E is relatively small (asset-light model), consisting of specialised machining and assembly facilities. * Right-of-use assets are immaterial relative to the broader balance sheet. ## Capital Expenditure & Investment * Capex as a percentage of revenue runs between 1.5% and 2.5%. * Maintenance capex accounts for roughly 60% of total capex, with the remainder dedicated to growth and facility automation. * Capitalised software costs are minimal. * M&A pattern: IDEX is a serial bolt-on acquirer, frequently purchasing founder-owned businesses in niche markets. * Typical acquisition multiples range from 12x to 15x EBITDA pre-synergies. ## Debt & Capital Structure * Total debt is approximately $1.2 billion to $1.5 billion. * Gross leverage ratio (Debt/EBITDA) is maintained below 2.0x, with a track record of rapid deleveraging post-acquisition. * Key debt instruments include a revolving credit facility and senior notes. * The interest rate profile is a mix of fixed senior notes and floating rate commercial paper. * The share repurchase programme is highly active, with $248 million utilised in 2025 and a $1 billion authorisation in place. * Dividend policy targets a payout ratio of 30% to 35% of adjusted net income. ## Cash Flow Characteristics * Operating cash flow conversion is exceptionally strong, typically 130% to 140% of GAAP net income. * Free cash flow margin is consistently 17% to 19% of revenue. * Major non-cash items bridging net income to OCF include high amortisation of acquired intangibles and depreciation. * Working capital is a moderate use of cash during periods of high organic growth. * Capex intensity is very low, driving the high free cash flow conversion (over 100% of adjusted net income). * The cash tax rate closely mirrors the GAAP effective tax rate of approximately 24%. ## Sheet Structure 1. **Assumptions**: Hardcoded drivers for macroeconomic inputs, segment growth, margins, and capital allocation. 2. **Scenarios**: Toggle for Base, Bull, and Bear cases driving the Assumptions sheet. 3. **Revenue Build**: Segment-level build for HST, FMT, and FSDP, splitting growth into organic, acquisitive, and FX impacts. 4. **Income Statement**: Consolidated view mirroring the 10-K, including unallocated corporate expenses. 5. **Balance Sheet**: Standard asset and liability line items, highlighting Goodwill and Intangibles. 6. **Cash Flow Statement**: Indirect method starting from Net Income, detailing working capital changes and M&A cash outflows. 7. **Debt Schedule**: Tranche-by-tranche build of senior notes and revolving credit facility, calculating interest expense. 8. **Working Capital**: Schedules for Accounts Receivable, Inventory, and Accounts Payable based on days outstanding. 9. **Depreciation & Amortisation**: Waterfall schedules for existing PP&E, acquired intangibles, and new capex. 10. **DCF Valuation**: Unlevered free cash flow calculation, WACC build, and terminal value derivation. ## Key Financial Relationships 1. HST Revenue = Prior Year HST Revenue * (1 + HST Organic Growth + HST Acquisitive Growth + FX Impact) 2. FMT Revenue = Prior Year FMT Revenue * (1 + FMT Organic Growth + FMT Acquisitive Growth + FX Impact) 3. FSDP Revenue = Prior Year FSDP Revenue * (1 + FSDP Organic Growth + FSDP Acquisitive Growth + FX Impact) 4. Total Net Sales = HST Revenue + FMT Revenue + FSDP Revenue 5. Segment Adjusted EBITDA = Segment Revenue * Segment Adjusted EBITDA Margin 6. Consolidated Adjusted EBITDA = Sum of Segment Adjusted EBITDA - Unallocated Corporate Costs 7. Amortisation Expense = Historical Intangibles Amortisation + (New M&A Spend * % Allocated to Intangibles / Useful Life) 8. Interest Expense = Average Debt Balance * Weighted Average Interest Rate 9. Share Count = Prior Year Share Count - (Share Repurchase Spend / Average Share Price) + Stock Based Compensation Dilution 10. Free Cash Flow = Operating Cash Flow - Capital Expenditures 11. Dividends Paid = Adjusted Net Income * Target Payout Ratio ## Cross-Sheet Dependencies * The **Revenue Build** feeds the top line of the **Income Statement**. * Segment margins from the **Assumptions** sheet drive the EBITDA calculations on the **Income Statement**. * Net Income from the **Income Statement** is the starting point for the **Cash Flow Statement** and feeds Retained Earnings on the **Balance Sheet**. * The **Working Capital** sheet calculates changes in operating assets and liabilities, which feed the **Cash Flow Statement**. * The **Debt Schedule** calculates interest expense for the **Income Statement** and ending debt balances for the **Balance Sheet**. This creates a circular reference if interest expense reduces cash, which in turn increases the revolver draw to fund operations. * The **Depreciation & Amortisation** sheet feeds operating expenses on the **Income Statement** and reduces asset balances on the **Balance Sheet**. ## Sign Convention * Revenues and expenses on the Income Statement are entered as positive numbers; margins and profits are calculated via subtraction. * On the Balance Sheet, all Assets, Liabilities, and Equity balances are positive. * On the Cash Flow Statement, cash inflows are positive and cash outflows (including Capex, Dividends, and Share Repurchases) are negative. * In the Debt Schedule, debt paydowns are negative and new borrowings are positive. ## Things Most Likely to Go Wrong * Failing to separate unallocated corporate costs from segment-level EBITDA will result in overstated consolidated margins. * Amortisation of acquired intangibles is a massive non-cash charge for IDEX; failing to add this back will severely understate true cash flow generation. * Foreign currency translation can swing reported revenue by 2% to 4% year-over-year; the model must separate organic growth from FX impacts. * The company frequently acquires businesses mid-year; the model must account for stub-period revenue and pro-forma adjustments. * Assuming linear margin expansion ignores the reality of volume deleverage; if organic volumes decline, margins will compress despite 80/20 productivity gains. * Overestimating capital expenditures; IDEX is asset-light and capex rarely exceeds 2.5% of sales. * Ignoring the share repurchase programme will result in an understated EPS forecast, as the company consistently buys back stock. * Miscalculating the tax rate by using the statutory rate instead of the historical effective rate of 24%. ## Validation Checks * Consolidated Adjusted EBITDA margin should remain between 26% and 28%. * Free Cash Flow conversion (FCF / Adjusted Net Income) must exceed 100%. * Gross leverage (Total Debt / Adjusted EBITDA) should not exceed 2.0x unless a major acquisition is modelled in that period. * Total Assets must exactly equal Total Liabilities plus Shareholders' Equity in every forecast period. * Capex as a percentage of revenue should flag if it exceeds 3%. * The effective tax rate should remain stable at approximately 24%. * Dividend payout ratio should calculate to exactly 30% to 35% of adjusted net income. * Unallocated corporate costs should run at approximately 1.5% to 2.0% of total consolidated revenue. ## Key Assumptions (Default Values) | Assumption | Default Value | Unit | Rationale | |---|---|---|---| | HST Organic Growth | 5.0 | % | Driven by strong data centre and semiconductor demand | | FMT Organic Growth | 1.5 | % | Stable municipal water demand offset by industrial softness | | FSDP Organic Growth | -1.0 | % | Near-term volume headwinds in dispensing and fire equipment | | HST Adjusted EBITDA Margin | 31.0 | % | Historical average and management guidance | | FMT Adjusted EBITDA Margin | 33.0 | % | Historical average and management guidance | | FSDP Adjusted EBITDA Margin | 29.0 | % | Historical average and management guidance | | Unallocated Corporate Costs | 1.8 | % of Sales | Historical run-rate | | Effective Tax Rate | 24.0 | % | Management guidance for 2026 | | Capex % of Revenue | 2.0 | % | Asset-light manufacturing model | | Share Repurchases | 250.0 | $ Millions | Ongoing quarterly target of ~$75M minus slight conservatism | | Dividend Payout Ratio | 32.0 | % | Midpoint of historical target range | | Cost of Debt | 4.5 | % | Weighted average interest rate on current debt | | WACC | 8.5 | % | Standard discount rate for diversified industrials | | Terminal Growth Rate | 2.5 | % | Long-term GDP plus slight premium for niche market positioning | ## Data Sources & Benchmarks * SEC EDGAR: IDEX Corporation 10-K and 10-Q filings. * IDEX Investor Relations: Q4 2025 Earnings Release and Investor Presentation. * Key peers for benchmarking: Danaher (DHR), Roper Technologies (ROP), Illinois Tool Works (ITW), and Nordson (NDSN). * Industry data sources: Semiconductor Industry Association (SIA) billings report, Dodge Construction Network for municipal starts. * Consensus estimates: FactSet or Bloomberg for forward-looking EPS and revenue consensus. ## Sources * IDEX Corporation Q4 2025 Earnings Release (February 4, 2026) * IDEX Corporation 2025 Form 10-K filed with the SEC * IDEX Corporation Investor Relations Presentations (idexcorp.com) * TradingView Financial Summaries for IDEX Corporation * The Motley Fool Q4 2025 Earnings Call Transcript for IDEX Corporation --- ## Frequently asked questions ### What does IDEX Corporation do and what are its main business segments? IDEX Corporation is a global applied solutions provider that designs and manufactures highly engineered, mission-critical components for niche markets. Its main business segments are Health & Science Technologies (HST), Fluid & Metering Technologies (FMT), and Fire & Safety/Diversified Products (FSDP). ### How does IDEX Corporation generate its revenue? IDEX generates revenue by providing highly engineered components and solutions across various niche markets, with an even split between domestic and international sales. The company manages over 50 subsidiaries through its 80/20 operational framework to drive margin expansion and portfolio optimization. ### What are the key revenue growth assumptions in the IDEX financial model? The financial model for IDEX Corporation forecasts revenue growth at approximately 7.03% annually over the FY2026–FY2030 horizon. This growth reflects the company's strong competitive position in specialized, fragmented markets and its strategy of serial bolt-on acquisitions. ### What is IDEX Corporation's capital expenditure strategy? IDEX Corporation maintains an asset-light manufacturing model, with capital expenditure typically ranging between 1.5% and 2.5% of revenue. Approximately 60% of this capex is for maintenance, with the remainder dedicated to growth and facility automation. ### What are the typical acquisition multiples for IDEX Corporation's bolt-on acquisitions? IDEX Corporation is a serial bolt-on acquirer, frequently purchasing founder-owned businesses in niche markets. Typical acquisition multiples for these transactions range from 12x to 15x EBITDA pre-synergies. ### Can I download an Excel financial model for IDEX Corporation? Yes, a comprehensive Excel financial model for IDEX Corporation is available for download. This model provides tools for equity valuation and M&A scenario planning, forecasting financials from FY2026 through FY2030. [Interactive forecast calculator](https://finamodel.com/companies/idex/forecast)