Trane Technologies plc (TT) Earnings

metirFinance

Sep 2026upcoming

Next quarter

Reports Oct 29, 2026.

Consensus is $4.74 EPS for Sep 2026 across 5 estimates, ranging $4.70 to $4.76.

TT Jun 2026

Reported Jul 30, 2026

: 0.94%
: +3.33%

: $4.27
: $4.31
: —
: $6.35B

Reported results

: $6.35B; from $5.75B
: 35.57%; from 37.60%
: $1.22B; from $1.16B
: 19.27%; from 20.26%
: $925.70M; from $874.80M
: $4.16; from $3.89

Highlights

Demand: Organic bookings increased 37% year over year to $7.8 billion, with a 123% book-to-bill and bookings above 100% in every segment.
Backlog: Record backlog reached $12.1 billion, up 70% year over year; Americas Commercial HVAC backlog rose 90%.
Revenue: Net revenue was $6.35 billion, up 10.6% reported and 9% organically, led by Americas volume growth and acquisitions.
Earnings: Adjusted continuing EPS was $4.31, up 11% year over year and 0.9% above the $4.27 consensus; GAAP continuing EPS was $4.20 versus $3.87.
Americas: Revenue rose 12% to $5.27 billion, with organic revenue up 11%; Commercial HVAC bookings increased 50% and applied equipment bookings rose 130%.
Margins: Adjusted operating margin fell 60 basis points to 19.7%, while GAAP operating margin declined 100 basis points to 19.3%, reflecting inflation, investment and weaker EMEA performance.
EMEA weakness: Revenue declined 1% reported and 4% organically; adjusted operating margin dropped 420 basis points to 13.1%, pressured by lower transport refrigeration volumes, Middle East conflict and acquisition integration costs.
Cash generation: Year-to-date operating cash flow was $1.73 billion and free cash flow was $1.60 billion, up from $1.04 billion and $841 million, respectively, in the prior-year period.
Guidance: Trane raised 2026 guidance to approximately 11.5% reported revenue growth, 9% organic growth and $15.20-$15.30 of adjusted continuing EPS.

Analysis

Trane Technologies delivered a strong second quarter defined more by demand visibility than by margin expansion. Revenue of $6.35 billion increased 10.6% year over year, while adjusted continuing EPS of $4.31 rose 11% and exceeded the $4.27 consensus by 0.9%. GAAP continuing EPS was $4.20, versus $3.87 a year ago. Sequentially, revenue increased from $4.97 billion in Q1 and diluted EPS from $2.62 to $4.16, reflecting the company’s normal seasonal step-up. Net income was $925.7 million, compared with $874.8 million a year ago and $584.4 million in Q1.

The central story was exceptional order momentum, particularly in Americas Commercial HVAC: companywide organic bookings rose 37%, book-to-bill was 123%, and backlog expanded 70% to $12.1 billion. Americas revenue grew organically 11%, but consolidated margins contracted as inflation, reinvestment and acquisition integration costs offset productivity and pricing. EMEA was the key offset, with organic revenue down 4% and adjusted operating margin down 420 basis points. Strong working-capital execution supported $1.60 billion of year-to-date free cash flow, funding $742 million of acquisitions and $756 million of share repurchases. Management raised full-year guidance, pointing to confidence in the backlog conversion and second-half demand outlook.

Bookings and backlog

Trane’s strongest signal this quarter was the order book. The company’s $7.8 billion of bookings increased 39% reported and 37% organically, producing a 123% book-to-bill ratio. Bookings exceeded 100% in all three segments, and backlog reached a record $12.1 billion, up 70% year over year.

Americas Commercial HVAC: Bookings rose 50%, including a 130% increase in applied equipment bookings; Americas Commercial HVAC backlog increased 90%.
Regional breadth: Americas bookings increased 44% reported and 43% organically to $6.6 billion; Asia Pacific bookings rose 33% reported and 31% organically to $503 million; EMEA bookings increased 7% reported and 4% organically to $753 million.
Demand implication: The combination of greater-than-100% book-to-bill across every segment and the record backlog provides substantial forward revenue coverage, although conversion remains exposed to project timing and regional execution.

Revenue and earnings

Net revenue rose $607 million, or 10.6%, to $6.35 billion. The 10.6% increase comprised 8.7 percentage points from volume, 0.3 points from pricing, 1.2 points from acquisitions and 0.4 points from currency. Adjusted operating income increased 7% to $1.25 billion, while adjusted EBITDA rose 7% to $1.34 billion.

Profitability: Adjusted operating margin declined 60 basis points to 19.7%, and adjusted EBITDA margin fell 70 basis points to 21.1%. GAAP operating income increased 5% to $1.22 billion, but GAAP operating margin declined 100 basis points to 19.3%.
Cost pressures: Gross margin fell 200 basis points to 35.6%, primarily because of inflation and investments, partly offset by productivity and price realization. Selling and administrative expenses increased 3.9% to $1.04 billion but declined to 16.3% of revenue from 17.3%.
EPS and adjustments: GAAP continuing EPS was $4.20, while adjusted continuing EPS was $4.31. The $0.11 adjustment primarily reflected $14.7 million of acquired-backlog amortization, $11.5 million of restructuring costs and $2.2 million of M&A transaction costs.

Segment performance

The Americas carried the quarter, while EMEA remained the principal weakness and Asia Pacific delivered growth with lower profitability.

Americas: Revenue grew 12% to $5.27 billion, including 11% organic growth. Adjusted operating income increased 11% to $1.17 billion, while adjusted operating margin declined 30 basis points to 22.1%; inflation and investment outweighed productivity and pricing.
EMEA: Revenue fell 1% to $698 million, including a 4% organic decline despite a positive currency contribution. Adjusted operating income fell 26% to $91 million and adjusted operating margin dropped 420 basis points to 13.1%, reflecting lower transport refrigeration volumes, the Middle East conflict, inflation and acquisition integration costs.
Asia Pacific: Revenue rose 11% to $385 million, including 10% organic growth, and adjusted operating income increased 8% to $81 million. Adjusted operating margin declined 60 basis points to 21.0%, while adjusted EBITDA margin fell 150 basis points to 21.8%.

Cash and capital allocation

Cash conversion improved materially in the first half. Continuing operating cash flow reached $1.73 billion, up from $1.04 billion in the prior-year period, while free cash flow rose to $1.60 billion from $841 million. Management attributed the operating cash improvement primarily to lower working capital and the timing of customer down payments.

Capital deployment: Through July, Trane had deployed or committed approximately $1.9 billion, including $690 million of dividends, $340 million of M&A and $840 million of share repurchases. The 10-Q reports $756 million of share repurchases through June 30 and approximately $172 million more through July 30.
Balance sheet: Cash was $1.32 billion at June 30, versus $1.76 billion at year-end, while total debt was broadly unchanged at $4.62 billion. The debt-to-total-capital ratio was 34.8%, and the company had $2.5 billion of unused revolving credit capacity.
Acquisitions: First-half cash spending on acquisitions and equity-method investments was $742 million, including Stellar Energy and additional LiquidStack ownership, expanding the company’s data-center cooling and building-automation capabilities.

2026 guidance

Management raised its full-year outlook after the second-quarter booking performance and backlog expansion. The new guidance assumes approximately 11.5% reported revenue growth and approximately 9% organic revenue growth versus 2025.

EPS outlook: GAAP continuing EPS is now expected at approximately $15.00-$15.10, including $0.20 of non-GAAP adjustments; adjusted continuing EPS is expected at $15.20-$15.30.
Operating context: Management cited continued strength in commercial HVAC, improving residential and transport dynamics, and confidence in carrying the quarter’s momentum into the second half.
Risks disclosed: The company continues to flag tariffs and other trade measures, commodity and supply-chain volatility, geopolitical conflict, higher interest rates, and the unresolved Aldrich and Murray asbestos bankruptcy proceedings.

Trane Technologies plc

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