Financial Data and Key Metrics Changes - Otis reported net sales of $3.7 billion with organic sales up 2%, driven by a 6% increase in service and a 14% increase in modernization organic sales [4][12] - Adjusted operating profit margin expanded by 20 basis points to 17.1%, with adjusted EPS growing approximately 9% to $0.09 in the quarter [13][28] - Adjusted free cash flow increased to $337 million in the quarter, with a year-to-date total of $766 million [13] Business Line Data and Key Metrics Changes - Service organic sales grew 6%, with maintenance and repair organic sales increasing by 4% and repair business accelerating to 7% growth year over year [14][15] - Modernization sales saw significant acceleration with organic sales growth of 14%, supported by a robust backlog [15] - New equipment organic sales declined 5%, with EMEA sales growing 3% and Americas declining 7% [16] Market Data and Key Metrics Changes - New equipment orders grew 4%, with notable strength in the Americas and EMEA, while Asia saw a low single-digit decline [8][9] - The total backlog, including maintenance and repair, increased by 22%, positioning the company well for future growth [9] - In China, new equipment sales declined approximately 20% in the third quarter, but the decline is expected to moderate in the second half of the year [16][24] Company Strategy and Development Direction - Otis is focused on customer-centric innovation, launching new modernization packages to capture long-term demand [7] - The company anticipates a multi-year growth cycle in modernization driven by the aging installed base of 22 million units [9] - Otis aims to improve customer retention and satisfaction through investments in service excellence and operational execution [32][82] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Americas market, upgrading the outlook to low single-digit growth due to strong demand in infrastructure and residential sectors [19] - The company expects total net sales for the year to be between $14.5 billion and $14.6 billion, with organic sales growth of approximately 1% [20] - Management highlighted the importance of maintaining service growth and improving repair activity, projecting a 10% growth in repair for the fourth quarter [14][21] Other Important Information - Otis completed approximately $250 million in share repurchases during the third quarter, bringing the year-to-date total to approximately $800 million [6] - The company was recognized by TIME magazine as one of the World's Best Companies for 2025 and by Forbes as one of the World's Best Employers [7] Q&A Session Summary Question: Can you talk about efforts on the maintenance side regarding retention and recapture? - Management acknowledged the need for improvement in customer retention and highlighted ongoing investments in service excellence to rebuild trust and improve retention rates [32] Question: What is the outlook for new equipment in the Americas? - Management expressed a positive outlook for the Americas, citing strong demand in residential and infrastructure sectors, and noted that backlog growth supports future revenue [36] Question: Can you discuss the visibility on repair growth? - Management indicated a strong visibility on repair growth, projecting 10% growth in the fourth quarter, driven by improved backlog conversion and customer satisfaction [41] Question: What are the expectations for service margins going forward? - Management expects service margins to continue expanding, driven by volume growth and improved pricing, despite some headwinds from modernization mix [70][72] Question: How is the pricing environment in China? - Management noted stabilization in pricing in China, with expectations for continued growth in service and modernization driven by government stimulus [75][76]