Two Industrial Peers, Two Adjusted Margins: Ingersoll Rand and Atlas Copco in Q3 2026

Ingersoll Rand and Atlas Copco compete directly in compressors, vacuum and industrial flow equipment, and both reported Q3 2026 with an adjusted margin in the headline. One was 28.3%, the other 21.3%. Almost none of that 7.0-point gap is profitability. Ingersoll Rand's Adjusted EBITDA margin of 28.3% is struck before depreciation and amortisation and before stock compensation.¹ Atlas Copco's adjusted operating margin of 21.3% is an EBIT measure that carries both.²

Rebuilt on Atlas Copco's basis, using only line items Ingersoll Rand discloses in its own reconciliation, the US company's Q3 2026 margin is 20.9% — 0.4 points below Atlas Copco rather than 7.0 points above it. The headline gap is a measurement artefact, and it points the wrong way.

What each measure is built on

Both definitions are disclosed and neither is unusual for its market. They are simply not the same measure.

Item	Ingersoll Rand — Adjusted EBITDA	Atlas Copco — adjusted operating profit
Reporting basis	US GAAP, USD, NYSE	IFRS, SEK, Nasdaq Stockholm
Starting point	Net income	Operating profit (EBIT)
Depreciation	Excluded	Carried as a cost
Amortisation of intangibles	Excluded, $107.4M in Q3 2026	Carried as a cost, MSEK 1,037 in Q3 2026
Stock-based compensation	Excluded in full, $16.1M	Carried as a cost; only the LTI provision movement is removed, MSEK 113
Restructuring	Excluded, $6.7M	Excluded, MSEK 132
Reconciliation length	Twelve line items from net income	Two items from operating profit

Atlas Copco defines items affecting comparability as restructuring costs, capital gains and losses, impairments, changes in the provision for share-related long-term incentive programmes, and other items with the character of affecting comparability.³ In Q3 2026 that came to MSEK 245: an LTI provision movement of MSEK 113 and MSEK 132 of restructuring in Industrial Technique, tied to the automotive business in Germany.² Operating profit of MSEK 9,950 plus MSEK 245 gives adjusted operating profit of MSEK 10,195 on revenues of MSEK 47,920.²

Atlas Copco's own key figures document states that because not all companies calculate performance measures in the same manner, these measures are not always comparable with measures used by other companies.³ That caveat sits in the source document and tends to be gone by the time the number reaches a comparison table.

The bridge, from Ingersoll Rand's own disclosure

Ingersoll Rand's Q3 2026 Adjusted EBITDA was $584.4 million on revenue of $2,064.9 million.¹ Four of the twelve reconciling items are the ones Atlas Copco's measure does not get: depreciation of $28.9 million, amortisation of acquisition-related intangibles of $105.2 million, amortisation of other intangibles of $2.2 million, and stock-based compensation of $16.1 million.¹

Those four come to $152.4 million, or 7.4 points of margin on Q3 revenue. Removing them leaves $432.0 million and a 20.9% margin, against Atlas Copco's 21.3%. The dollar figures are all reported; the $152.4 million total, the $432.0 million result and both margins are calculated from them.

This is an approximation rather than a restatement. Atlas Copco's other items affecting comparability have no Ingersoll Rand analogue, and Ingersoll Rand's LIFO inventory adjustment, equity-method items and foreign currency transaction losses have no Atlas Copco equivalent inside the operating line. Those residuals are small next to the $152.4 million the four steps move, and the currencies are not translated: the comparison is of margins, not amounts.

The same quarter contains a second reversal

Ingersoll Rand's Q3 2026 net income was $671.6 million and its adjusted net income was $416.6 million.¹ The adjusted figure is lower than the GAAP figure, which is the opposite of the usual direction for a non-GAAP measure.

The reason is a single reconciling item: a recovery of acquisition-related losses, net, of $380.1 million, which the company subtracts on the way to Adjusted EBITDA.¹ GAAP operating income for the quarter was $782.5 million — higher than Adjusted EBITDA of $584.4 million, even though one is struck after depreciation and amortisation and the other before.¹ An adjusted measure below reported EBIT is rare enough to be worth checking rather than assuming, and here it is the company's own adjustment removing a one-off gain.

Two adjusted margins in one release

The release carries a second adjusted margin alongside the first: Adjusted EBITDA excluding IEEPA tariff refunds of $552 million, a 26.7% margin, 1.6 points below the headline 28.3%.¹ The release reports that measure and the matching adjusted EPS of $1.01 without defining or reconciling either, and the full-year guidance of $2,130–2,190 million of Adjusted EBITDA is given on the excluding-refunds basis.¹

Nothing here is improper, and the direction is conservative: the company is stripping out a benefit rather than a cost. The point for an analyst is narrower. One issuer, one release, two defensible adjusted margins 1.6 points apart, and the guidance is anchored to the lower one. A peer table has to record which of the two it used.

What changes on 1 January 2027

IFRS 18 applies to annual periods beginning on or after 1 January 2027.⁴ A company-defined subtotal used in public communications that is not an IFRS-defined subtotal falls inside the management-defined performance measure requirements: a single note with the definition, why it provides useful information, and a reconciliation to the most directly comparable IFRS subtotal, including the income tax and non-controlling interest effect of each reconciling item. ACCA's guidance states that the reconciliation will be subject to audit.⁶

Adjusted operating profit excluding items affecting comparability is precisely the shape of measure that describes. For a December year-end, 2026 is the comparative year, so the work sits in the current year rather than in 2027. On the US side nothing equivalent happens: non-GAAP measures continue under Regulation G and Item 10(e) of Regulation S-K, which require the comparable GAAP measure and a reconciliation but keep it outside the audited statements.⁵ From 2027 the IFRS reporter's adjustment note carries an audit opinion the US reporter's does not — a difference in evidential weight, not a step toward comparability.

A working rule

Choose the subtotal before collecting the data. Decide once, for the whole peer set, whether depreciation and amortisation sits inside it, whether amortisation of acquisition intangibles is a cost for this comparison, and on which side of the line equity compensation belongs. Then rebuild every company to that answer from its own disclosed reconciliation, and keep the page reference for each adjustment so the bridge can be rechecked when the next report lands. For this pair that is four line items and about ten minutes; the difference between doing it and not doing it was 7.4 points of margin pointing the wrong way.

This article is information, not investment or financial reporting advice, and does not replace a professional assessment. Both companies disclose their performance measure definitions and neither definition is criticised here; the subject is what happens when two differently defined measures are placed in the same column. Figures are as reported in the filings cited above on 3 November 2026. Margins and the restated bridge total are calculated from those reported figures. Verify every figure against the original filing before relying on it.