Trane Technologies(US:TT)2026-01-29 11:00Financial Performance - Fourth-quarter 2025 diluted EPS from continuing operations was $2.74, with adjusted continuing EPS at $2.86, reflecting a 10% increase year-over-year [2]. - The company reported net revenues of $5.14 billion for the fourth quarter, a 6% increase compared to the same period in 2024, with organic revenues up 4% [4]. - Full-year 2025 reported revenues were $21.32 billion, up 7%, with organic revenues increasing by 6% [19]. - For the quarter ended December 31, 2025, net revenues were $5,144.5 million, with an operating income of $819.0 million, resulting in an operating margin of 15.9% [49]. - For the year ended December 31, 2025, net revenues totaled $21,321.9 million, with an operating income of $3,967.4 million, leading to an operating margin of 18.6% [49]. - The company reported net earnings attributable to Trane Technologies plc of $591.3 million for Q4 2025, down from $604.3 million in Q4 2024 [63]. - For the full year 2025, net earnings attributable to Trane Technologies plc were $2,918.6 million, an increase from $2,567.9 million in 2024 [66]. - Adjusted EBITDA for the full year 2025 was $4,276.0 million, compared to $3,846.3 million in 2024, indicating a strong year-over-year performance [66]. Bookings and Backlog - Total bookings for the fourth quarter reached $5.76 billion, up 24% year-over-year, with organic bookings increasing by 22% [3]. - Full-year 2025 bookings totaled $22.65 billion, representing a 12% increase, with a record backlog of $7.8 billion, up 15% from year-end 2024 [19]. - The Americas Commercial HVAC segment saw bookings increase by more than 35%, contributing significantly to the overall growth in bookings [10]. Margins and Operating Income - The GAAP operating margin for the fourth quarter was 15.9%, down 70 basis points from the previous year, while the adjusted operating margin remained flat at 16.3% [3]. - The company achieved a GAAP operating margin of 18.6% for the full year, an increase of 100 basis points, and an adjusted EBITDA margin of 20.1%, up 70 basis points [19]. - Adjusted operating income for Q4 2025 was $819.0 million, compared to $807.6 million in Q4 2024, reflecting a slight increase [46]. - Total Company operating income for 2025 was $3,967.4 million, with a margin of 18.6%, compared to $3,500.1 million and 17.6% in 2024 [58]. Cash Flow and Capital Expenditures - Free cash flow for full-year 2025 was $2.89 billion, equating to 98% of adjusted net earnings [21]. - Free cash flow for 2025 was $2,887.3 million, compared to $2,789.0 million in 2024, reflecting a growth of 3.5% [74]. - Net cash provided by operating activities was $3,194.5 million in 2025, an increase from $3,145.6 million in 2024, showing a rise of 1.6% [71]. - Capital expenditures increased to $383.0 million in 2025 from $370.6 million in 2024, a rise of 3.5% [74]. Assets and Equity - Total assets increased to $21,420.7 million in 2025 from $20,146.7 million in 2024, representing a growth of 6.3% [69]. - Total equity grew to $8,600.9 million in 2025, up from $7,486.9 million in 2024, indicating an increase of 14.9% [69]. Debt and Efficiency - The company’s long-term debt decreased to $3,922.1 million in 2025 from $4,318.1 million in 2024, a reduction of 9.2% [69]. - The company’s free cash flow conversion rate was 98% in 2025, down from 109% in 2024, indicating a decrease in efficiency [74]. - Days Sales Outstanding improved slightly to 57.4 days in 2025 from 57.9 days in 2024, indicating better receivables management [74]. Future Outlook - For full-year 2026, the company expects reported revenue growth of approximately 8.5% to 9.5% and GAAP and adjusted continuing EPS of $14.65 to $14.85 [22]. - Future performance will be assessed using both GAAP and non-GAAP financial measures to provide a comprehensive view of financial health [41]. Strategic Focus - Trane Technologies aims to enhance its market position through strategic brands and environmentally responsible products [27]. - The company is focused on organic revenue growth, which excludes the impact of currency and acquisitions [38].