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]

Strategic Partnership - Great Elm Group (GEG) and Kennedy Lewis Investment Management (KLIM) have formed a strategic partnership to accelerate the growth of the Monomoy real estate platform[3] - KLIM is making a 4.9% investment in GEG's outstanding common stock at approximately $2.11 per share[4] - KLIM is providing a $100 million term loan to Monomoy Properties REIT, LLC, with an option for an additional $50 million[4] - KLIM will receive a 15% profits interest in the newly formed Great Elm Real Estate Ventures, LLC[4] Real Estate Platform - Great Elm Real Estate Ventures (GEREV) unifies GEG's vertically-integrated real estate platform[7] - Monomoy REIT has approximately $400 million in Assets Under Management (AUM) as of June 30, 2025[10, 11] - Monomoy REIT's portfolio consists of 150 properties across 29 states with 49 unique tenants[10] - The portfolio composition of Monomoy REIT is 58% Equipment Rental, 28% Oil Field & Energy Services, and 10% Construction Supply[10] Future Growth - The real estate platform is targeting revenue growth from approximately $5 million in fiscal year 2025 to $20 million in fiscal year 2026, and to over $100 million in fiscal year 2030[19] - The goal is to grow Monomoy REIT's assets to over $1 billion by 2030, targeting a potential IPO[20]