Trane Technologies(US:TT)2025-10-30 10:00Financial 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]