Financial Data and Key Metrics Changes - The company achieved an 11% revenue compound annual growth rate since 2020 and a 24% adjusted EPS compound annual growth rate [7] - Adjusted EBITDA margins expanded by 470 basis points, with free cash flow conversion at 106% [7] - For Q4, organic revenue grew 4%, with adjusted EPS growth of 10% [8] Business Line Data and Key Metrics Changes - Americas Commercial HVAC bookings increased by over 35% year-over-year, with revenue growth in low double digits [11] - Applied Solutions bookings surged more than 120%, achieving a record book-to-bill ratio of 200% [8] - EMEA HVAC bookings grew mid-teens, while Asia Pacific faced challenges with double-digit declines in bookings and revenue [12] Market Data and Key Metrics Changes - The backlog for commercial HVAC in the Americas rose approximately 25% and nearly 40% in EMEA compared to year-end 2024 [9] - The residential market showed mid-single-digit growth in bookings but mid-teens revenue decline due to inventory normalization [11] - The Americas transport refrigeration market bookings were down mid-single digits, outperforming a market decline of over 20% [12] Company Strategy and Development Direction - The company emphasizes a purpose-driven strategy focused on energy efficiency and sustainability, positioning itself to meet growing customer demand for smarter energy solutions [4] - Continued investment in innovation, services, and digital capabilities is expected to drive future growth [10] - The acquisition of Stellar Energy aims to enhance modular design capabilities and meet demand for prefabricated cooling systems [22] Management's Comments on Operating Environment and Future Outlook - Management anticipates a gradual recovery in residential and transport markets, with expectations for improved performance in the second half of 2026 [10][17] - The company is optimistic about its strong backlog and pipeline, projecting solid growth in 2026 [16] - Management remains cautious about the residential market, expecting it to be flat to down 5% in 2026 [19] Other Important Information - The company deployed approximately $3.2 billion in 2025 through its balanced capital allocation strategy, including dividends, M&A, and share repurchases [21] - The company expects to deploy between $2.8 billion and $3.3 billion in 2026 [22] Q&A Session Summary Question: Guidance on revenue for Americas Commercial HVAC - Management expects strong growth in the first quarter, around 7%-8%, increasing to low teens in the second half of the year due to strong bookings [27][28] Question: Confidence in residential inventory normalization and pricing - Management believes inventory is appropriately sized and has not seen pricing fade, with expectations for flat to down 5% in residential for the year [30][32] Question: Broadening of orders among end markets - Management reports broad-based growth across multiple verticals, not just data centers, indicating a healthy order pipeline [39][40] Question: Impact of customer lead times on applied orders - Management has not observed significant changes in lead times and remains competitive in that area [45] Question: Positioning in the data center market - Management emphasizes the importance of chillers in future data center designs and ongoing innovation in thermal management systems [58][66] Question: Insights on biopharma reshoring - Management is optimistic about large pharma projects related to reshoring but acknowledges that the Life Sciences vertical has not been positive recently [80][81]