Financial Data and Key Metrics Changes - Q3 2025 saw record quarterly bookings of $6 billion, representing organic growth of 13% year-over-year [5] - Adjusted operating margin expanded by 170 basis points, with adjusted EPS growth of 15% [5] - Free cash flow remained robust, with expectations for 100% or greater free cash flow conversion in 2025 [14][16] Business Line Data and Key Metrics Changes - Global commercial HVAC businesses performed exceptionally, particularly in the Americas, where bookings surged 30% year-over-year [5][7] - The services business, constituting approximately one-third of total revenues, grew low double digits year-to-date and has a low teens compound annual growth rate since 2020 [6][21] - Residential bookings and revenues declined approximately 30% and 20% respectively, consistent with prior updates [8][12] Market Data and Key Metrics Changes - In EMEA, commercial HVAC bookings increased by high teens, while revenues grew by mid-single digits [8] - Asia Pacific commercial HVAC bookings were up mid-30s, with revenues growing low teens, particularly strong in China [8] - Americas transport refrigeration bookings were up low teens, while revenues remained flat despite end markets declining over 25% [8] Company Strategy and Development Direction - The company emphasizes a purpose-driven strategy focused on sustainable, resilient infrastructure, leveraging innovation and expertise to differentiate itself in the market [4] - The elevated backlog and strong customer demand position the company for long-term growth, particularly in commercial HVAC and services [5][19] - The company is committed to a balanced capital allocation strategy, focusing on reinvestment, maintaining a strong balance sheet, and strategic M&A [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted that the residential market slowdown is the most significant change impacting the outlook for 2025, but commercial HVAC businesses are performing well [12] - The company expects continued strong growth in commercial HVAC, with a robust pipeline of opportunities, particularly in data centers [19][20] - Management anticipates a challenging first half of 2026 due to tough comparisons, followed by improvement in the second half [20] Other Important Information - The company has deployed or committed approximately $2.4 billion through its capital allocation strategy year-to-date, including significant amounts for share repurchases and dividends [16] - The Americas transport refrigeration market is expected to recover, with projections for growth exceeding 20% in 2027 [18] Q&A Session Summary Question: About Americas margins and service incremental margins - Management expressed satisfaction with the Americas margin performance, noting opportunities for service margins to improve due to investments in technology and training [23][24][26] Question: On applied bookings growth and market opportunities - Management acknowledged strong growth in applied bookings, particularly in data centers, and emphasized a robust pipeline of activity [27][28][29] Question: Future growth expectations in commercial HVAC - Management expects continued strong growth in the commercial HVAC Americas business, supported by a solid backlog and order rates [36][38] Question: Residential market inventory balance - Management is hopeful for inventory rebalancing by the end of the year, following an unusual year for residential markets [40][41] Question: Operating leverage guidance change - Management indicated that strong volume growth and effective cost management are contributing to improved operating leverage, despite headwinds in some segments [46][48] Question: Pricing contributions to revenues - Pricing contributed approximately 3 percentage points to revenues in Q3, with management confident in maintaining price discipline amid inventory destocking [50][51] Question: Data center opportunities and project nature - Management noted a trend towards modular data centers, which reduces labor requirements and enhances build efficiency [86][87] Question: Lead times and project slippage - Management characterized project slippage as normal noise, with strong demand and order rates remaining intact [97][99]

Financial Data and Key Metrics Changes - Q3 2025 marked record quarterly bookings of $6 billion, representing organic growth of 13% year over year [4] - Adjusted operating margin expanded by 170 basis points, with adjusted EPS growth of 15% [4] - Free cash flow remained robust, with expectations for 100% or greater free cash flow conversion for the year [15][17] Business Line Data and Key Metrics Changes - Global commercial HVAC businesses performed exceptionally, particularly in the Americas, where bookings surged 30% year over year [4][6] - The services business, constituting approximately one-third of total revenues, grew in low double digits year to date, with a low teens compound annual growth rate since 2020 [5][21] - Residential bookings and revenues declined approximately 30% and 20% respectively, consistent with prior updates [8][12] Market Data and Key Metrics Changes - In the Americas, commercial HVAC revenue growth was robust, increasing by low teens in equipment and low double digits in services [7] - EMEA commercial HVAC bookings increased by high teens, while revenues grew by mid single digits [8] - Asia Pacific saw commercial HVAC bookings up mid-30s, with revenues growing low teens, particularly strong in China [8] Company Strategy and Development Direction - The company emphasizes a purpose-driven strategy focused on sustainable infrastructure and energy efficiency, positioning itself as a leader in innovation [3] - Continued investment in innovation and a strong direct sales force are seen as competitive advantages [5][19] - The company plans to maintain a balanced capital allocation strategy, focusing on reinvestment, M&A, and share repurchases [16][17] Management's Comments on Operating Environment and Future Outlook - Management noted that the residential market slowdown is the most significant change impacting the outlook for 2025, but commercial HVAC businesses are performing well [12] - The company expects continued strong growth in commercial HVAC, with a robust backlog positioning it well for 2026 [19] - There is optimism about the data center vertical, with significant demand and innovation driving growth [100] Other Important Information - The company anticipates approximately 6% organic revenue growth for the year, factoring in headwinds from residential and transport markets [15] - Adjusted EPS guidance for 2025 is now $12.95 to $13.05, reflecting a 15% to 16% year-over-year increase [15] - The company has approximately $5 billion remaining under its share repurchase authorization, providing significant optionality [17] Q&A Session Summary Question: About Americas margins and service margins improvement - Management expressed satisfaction with the Americas margin performance, noting operating income margins were nearly 22%, up 120 basis points year-over-year, with opportunities for service margins to expand [28][29] Question: On applied bookings and market conditions - Management indicated that while applied bookings were strong, the pipeline remains robust, and they are capturing significant market momentum [40][41] Question: Regarding residential HVAC inventory and market conditions - Management is hopeful that channel inventories will normalize by the end of the year, following a challenging period in 2025 [51] Question: About EMEA margins and future expectations - Management expects EMEA margins to improve as recent investments and M&A integration costs stabilize [90] Question: On data center opportunities and project nature - Management confirmed that modular data centers are becoming more common, and they are well-positioned to meet the demand with expanded capacity [100][101]

Third-Quarter 2025 Results 1 2 3 4 Maximize Value As Continue With Strong business operating system and performance culture Uplifting culture – integrity, ingenuity, community & engagement Powerful cash flow Win Through Sustainable Innovation Grow Margins and Cash Via Execution Excellence Focused Climate Co. Dynamic Capital Allocation Strong Foundation 3 This presentation includes "forward-looking" statements within the meaning of securities laws, which are statements that are not historical facts, includin ...

Company Performance - Trane Technologies reported quarterly earnings of $3.88 per share, exceeding the Zacks Consensus Estimate of $3.80 per share, and up from $3.37 per share a year ago, representing an earnings surprise of +2.11% [1] - The company posted revenues of $5.74 billion for the quarter ended September 2025, which was a slight miss compared to the Zacks Consensus Estimate by 0.33%, but an increase from $5.44 billion year-over-year [2] - Over the last four quarters, Trane Technologies has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Stock Outlook - Trane Technologies shares have increased approximately 15.7% since the beginning of the year, while the S&P 500 has gained 17.2% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the upcoming quarter is $2.86 on revenues of $5.19 billion, and for the current fiscal year, it is $12.99 on revenues of $21.38 billion [7] Industry Context - The Building Products - Air Conditioner and Heating industry, to which Trane Technologies belongs, is currently ranked in the bottom 16% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

Financial Performance - Trane Technologies reported diluted EPS of $3.82 for Q3 2025, with adjusted continuing EPS of $3.88, reflecting a 15% year-over-year increase[3][5] - Net revenues for Q3 2025 were $5.743 billion, a 6% increase from Q3 2024, with organic revenue growth of 4%[4][11] - Operating income for Q3 2025 was $1,165.3 million, compared to $1,024.6 million in Q3 2024, reflecting a 13.7% year-over-year growth[46] - Total net earnings attributable to Trane Technologies plc for the nine months ended September 30, 2025, were $2,327.3 million, compared to $1,963.6 million for the same period in 2024[46] - Earnings from continuing operations for the nine months ended September 30, 2025, increased to $2,354.2 million from $1,998.9 million in the same period of 2024, representing a growth of approximately 17.8%[65] Revenue and Bookings - Total bookings reached a record $6 billion, up 15% year-over-year, with organic bookings increasing by 13%[7][11] - The enterprise backlog stood at $7.2 billion, up 7% compared to year-end 2024[7] - In the Americas segment, organic bookings surged by 30%, driven by over 100% growth in applied solutions[6][11] - The EMEA segment saw bookings increase by 24%, with net revenues up 12% year-over-year[14][17] - The Asia Pacific segment experienced a 34% increase in bookings, with net revenues rising by 10%[16][18] Margins and Operating Metrics - The GAAP operating margin improved by 150 basis points to 20.3%, while the adjusted operating margin increased by 170 basis points to 20.6%[4][11] - Adjusted EBITDA margin for Q3 2025 was 20.6%, up from 20.3% in Q3 2024[49] - The Americas segment reported net revenues of $4,663.3 million for the quarter ended September 30, 2025, with an adjusted operating income margin of 21.8%[55] Cash Flow and Capital Expenditures - Year-to-date cash flow from continuing operating activities was approximately $2.1 billion, with free cash flow at approximately $1.8 billion[19][25] - Free cash flow for the nine months ended September 30, 2025, was $1,786.0 million, down from $2,037.5 million in 2024, indicating a decrease of approximately 12.3%[68] - Capital expenditures for the nine months ended September 30, 2025, were $277.2 million, compared to $245.0 million in 2024, reflecting an increase of about 13.1%[68] Tax and Effective Rates - The effective tax rate for Q3 2025 was 21.2%, slightly up from 19.9% in Q3 2024[49] - The effective tax rate for the nine months ended September 30, 2024, was 20.4%[52] - Adjusted effective tax rate for 2025 is defined to allow for direct comparison of the effective tax rate between periods[35] Assets and Liabilities - Total assets as of September 30, 2025, were $21,373.8 million, an increase from $20,146.7 million as of December 31, 2024[62] - The company reported total equity of $8,346.3 million as of September 30, 2025, compared to $7,486.9 million at the end of 2024[62] - Cash and cash equivalents decreased to $1,125.8 million as of September 30, 2025, down from $1,590.1 million[62] Working Capital and Receivables - The company reported a working capital as a percent of revenue, calculated by dividing the working capital balance by the annualized revenue for the period[44] - Net receivables as of September 30, 2025, rose to $3,602.9 million, up from $3,393.4 million in 2024, marking an increase of approximately 6.2%[68] - Net inventory increased to $2,355.3 million as of September 30, 2025, compared to $2,033.4 million in 2024, representing a growth of about 15.8%[68] Days Sales and Payable Outstanding - Days Sales Outstanding (DSO) slightly increased to 57.3 days in 2025 from 56.9 days in 2024, indicating a marginal rise in collection period[68] - Days Payable Outstanding (DPO) increased to 60.3 days in 2025 from 57.8 days in 2024, suggesting a longer payment period to suppliers[68] Other Financial Metrics - The company incurred restructuring costs of $1.2 million impacting operating income for the quarter ended September 30, 2024[52] - The cash and cash equivalents at the end of the period decreased to $1,125.8 million as of September 30, 2025, down from $1,470.0 million in 2024, reflecting a decline of about 23.4%[65] - Total company adjusted EBITDA for the quarter ended September 30, 2025, was $1,252.3 million, compared to $1,127.1 million for the same period in 2024[59]

Core Insights - Trane Technologies plc (TT) is expected to report third-quarter 2025 earnings on October 30, with an estimated EPS of $3.80, reflecting a year-over-year growth of 12.76% and projected revenues of $5.76 billion, indicating a 5.9% increase from the previous year [1][8] Q3 Expectations for TT - Strong demand for innovative products and services in the Americas Commercial HVAC segment is anticipated to drive revenue growth, with Americas revenues expected to rise by 7.3% to $4.8 billion [3][8] - EMEA revenues are forecasted to increase by 12.6% to $751.9 million, supported by improved operational efficiency [3][4][8] Earnings Surprise History - TT has a positive earnings surprise history, having beaten earnings estimates in each of the last four quarters, with an average surprise of 5.4% [2] Earnings Prediction Model - The current model does not predict an earnings beat for TT this reporting cycle, with an Earnings ESP of -0.46% and a Zacks Rank of 4 (Sell) [5]

Core Insights - The analysis of Trane Technologies plc (NYSE: TT) has been revisited due to significant changes and realizations in the market since the initial coverage five months ago [1]. Group 1: Market Trends - A dip in the stock price was anticipated and has occurred, creating new investment opportunities [1]. Group 2: Analyst Background - The analyst has nearly two decades of experience in the logistics sector and a decade in stock investing and macroeconomic analysis, focusing on ASEAN and NYSE/NASDAQ stocks, particularly in banks, telecommunications, logistics, and hotels [1]. - The analyst has diversified their portfolio since 2014, moving from traditional savings in banks and properties to include various industries and market cap sizes [1]. - The analyst began trading in the US market in 2020, gaining insights through a relative's trading account before opening their own [1].

Core Insights - The analysis of Trane Technologies plc (NYSE: TT) has prompted a reevaluation due to recent market changes and realizations [1] Group 1: Market Context - A dip in the stock price of Trane Technologies was anticipated and has occurred, creating new investment opportunities [1] Group 2: Analyst Background - The analyst has nearly two decades of experience in the logistics sector and a decade in stock investing and macroeconomic analysis, focusing on ASEAN and NYSE/NASDAQ stocks [1] - The analyst has diversified investments across various industries, including banks, telecommunications, logistics, and hotels, with a notable presence in the US market since 2020 [1]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Trane Technologies, with a focus on how actual results compare to estimates impacting stock price [1][2] Earnings Expectations - Trane Technologies is expected to report quarterly earnings of $3.80 per share, reflecting a year-over-year increase of 12.8% [3] - Revenue is projected to be $5.76 billion, which is a 5.9% increase from the previous year [3] Estimate Revisions - The consensus EPS estimate has been revised down by 0.22% over the last 30 days, indicating a reassessment by analysts [4] - The Most Accurate Estimate for Trane Technologies is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.24% [12] Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative reading indicates the likely deviation of actual earnings from the consensus estimate, with positive readings being more predictive [9][10] - A combination of a positive Earnings ESP and a strong Zacks Rank increases the likelihood of an earnings beat [10] Historical Performance - Trane Technologies has beaten consensus EPS estimates in the last four quarters, with a surprise of +3.19% in the most recent quarter [13][14] Conclusion - Despite the historical performance, Trane Technologies does not appear to be a strong candidate for an earnings beat based on current estimates and rankings [17]

Core Insights - Trane Technologies plc (TT) is a global climate innovator with a market cap of $92.2 billion, specializing in industrial equipment including heating and cooling systems, air conditioners, and electric vehicles [1] Financial Performance - Analysts expect TT to report a profit of $3.82 per share for Q3 2025, reflecting a 13.4% increase from $3.37 per share in the same quarter last year [2] - For the full fiscal year 2025, EPS is projected to be $13, up 15.9% from $11.22 in fiscal 2024, with further growth expected to $14.52 in fiscal 2026, an 11.7% year-over-year increase [3] Stock Performance - Over the past 52 weeks, TT stock has underperformed the S&P 500 Index, which gained 14.4%, with TT shares only increasing by 4.7% [4] - Following the Q2 results announcement, TT shares fell more than 8%, despite reporting revenue of $5.7 billion, an 8.3% year-over-year increase, and an adjusted EPS of $3.88, up 17.6% from the previous year [5] Analyst Ratings - The consensus opinion on TT stock is moderately bullish, with a "Moderate Buy" rating. Among 21 analysts, six recommend a "Strong Buy," 14 suggest a "Hold," and one advises a "Strong Sell." The average price target is $466, indicating a potential upside of 11.3% from current levels [6]