Trane Technologies : First-Quarter 2026 Results

Published: 2026-04-30 07:02:19 ET TT

Published on 04/30/2026 at 07:02 am EDT

First-Quarter 2026 Results

April 30, 2026

C L E A R P R I O R I T I E S

Focused Strategy Delivers Differentiated Shareholder Returns

Dynamic Capital

Allocation

Continue

With

Focused

Climate Co.

Maximize

Value As

Grow Margins and Cash Via

Execution Excellence

Win Through

Sustainable Innovation

Strong business operating system and performance culture

Powerful cash flow

Uplifting culture - integrity, ingenuity, community & engagement

Q 1 2 0 2 6 U P D A T E

Continued Exceptional CHVAC Performance and Robust Services Growth. Record Bookings

and Backlog Support Strong Growth in 2026 and Beyond. Raising FY Guidance

Strong Enterprise Performance in Q1

Exceptional enterprise organic bookings*, up 24%; record backlog of $10.7B, up over 30% versus year-end 2025

Organic revenue* up 3%, led by Americas CHVAC and double-digits global services growth

Adjusted EPS* up 7%

Exceptional Q1 Bookings and Backlog, Led by Commercial HVAC

Americas CHVAC: record Q1 bookings, up ~40% YOY; Applied bookings up over 160%

Combined Americas and EMEA CHVAC backlog up $2.7B since Y/E 2025, with Americas +~40% including ~$1B Stellar Energy backlog

Global applied bookings up >100%; majority of backlog is applied equipment with higher-margin services tail

Operational Excellence

Expect to mitigate tariff and inflationary pressures with robust strategies and proactive measures through our BOS

Well Positioned for Continued Growth in 2026 and beyond - Executing on the Controllables

High visibility for CHVAC - exceptional bookings / record backlog support continued market outgrowth & revenue growth acceleration in 2H

Robust project pipeline - strong and rapidly growing project pipelines across key verticals buoy confidence in long-term outlook

Consistent, durable services revenue growth over long term -1/3rd of enterprise revenues with low-teens CAGR since 2020

Resi market tailwinds in 2H - better than expected Q1, 2H on improving market fundamentals / easier PY comps

Americas transport market recovery - fundamentals continue to improve, strengthening outlook for late 2026 / 2027 market recovery

Best-in-Class Financial Position, Liquidity and Balance Sheet

Strong balance sheet, liquidity and FCF* provide excellent optionality for balanced capital deployment

Raising FY 2026 Guidance:

Expect organic revenue growth of ~+7%, at the high end of previous guidance range, and adjusted EPS of approximately $14.75 to $14.95, up

from $14.65 to $14.85 prior. (see pages 9 & 16 for more detail)

*Includes certain Non-GAAP financial measures. See the company's Q1 2026 earnings release for additional details and reconciliations

Q 1 2 0 2 6 O R G A N I C B O O K I N G S A N D R E V E N U E S

Strong Demand for CHVAC Globally with Standout Performance in the Americas

Q1 Organic* Y-O-Y Change

Bookings Revenue

Enterprise + 24% + 3%

Americas

+ 29%

+ 4%

Commercial HVAC

Residential HVAC

Transport

Americas

Exceptional CHVAC bookings / revenues, up ~40% / up HSD, respectively. Strong services growth with revs up double digits. 3 yr stack revs up ~50% (applied up >80%)

Resi bookings / revs, up LSD / down MSD, respectively

Transport bookings / revs, up double digits / up LSD, respectively, outperforming end markets - Truck, Trailer, APU down ~double digits Q1

EMEA

- 9%

- 1%

Commercial HVAC

Transport

EMEA

CHVAC bookings down LSD; revs up ~4%

Transport bookings / revs down low-twenties / down ~7%, respectively,

outperforming end markets (down ~double digits)

Asia Pacific

+ 26%

+ 3%

China

Rest of Asia

Asia Pacific

CHVAC bookings / revs, up high twenties / up LSD

China CHVAC bookings / revs both up LSD

Rest of Asia bookings up ~50% / revs up LSD

*Organic bookings and organic revenues exclude acquisitions and currency

Q 1 2 0 2 6 E N T E R P R I S E R E S U L T S

Performance Scoreboard: Solid Revenue & EPS Growth

Net Revenue

Adj. EBITDA Margin*

Adj. Operating Margin*

Adj. Continuing EPS*

+3%

Organic*

-40

bps

-20

bps

+7%

$4,688

$4,969

18.1% 17.7%

16.2% 16.0%

$2.45

$2.63

Q1'25 Q1'26

Organic revenue growth flattish in equipment, with continued strong LDD services growth

Volume growth and positive price was more than offset by inflation and high levels of business reinvestment

Enterprise organic leverage of high teens

BOS driving operational excellence throughout P&L

*Includes certain Non-GAAP financial measures. See the company's Q1 2026 earnings release for additional details and reconciliations.

Q 1 2 0 2 6 S E G M E N T R E S U L T S

Margins In Line with Expectations

Highlights

Adj. OI*% vs PY

Adj.

EBITDA*%

vs PY

Revenue Org.* Growth

Americas

+4%

EMEA

-1%

Asia Pacific

+3%

flat

-260 bps

+120 bps

+10 bps

-260 bps

+90 bps

Americas margins impacted by margin deleverage in resi business on lower volumes

• Strong margin expansion on price and volume growth

• Strong volume growth, positive price realization and productivity more than offset material and other inflation related to supply chain challenges and higher costs to serve customers including spot buys and expedited freight

• Continued business reinvestment supporting sustainability strategy

EMEA margins impacted by Middle East challenges; M&A integration costs

Asia OI margins expanded on prudent cost management, offsetting challenging China macro environment

Acceleration of incremental business reinvestment in each segment

to pull forward high ROI innovation & growth initiatives

* Includes certain Non-GAAP financial measures. See the company's Q1 2026 earnings release for additional details and reconciliations.

M A R K E T U P D A T E

FY 2026 Outlook Remains Strong. Record Bookings and Backlog to Support Continued Growth in 2026 and 2027

Americas

Commercial HVAC

Strong demand continues in data centers and core markets (higher education, government, healthcare)

Q1 Book-to-bill of ~150%, backlog up nearly 70% YOY, project pipeline remains robust

Expect to convert ~$500M (~$350M acquisition, ~$150M organic) of Stellar Energy backlog in 2026; expect modest EPS accretion in year 1 with high levels of investments as we deploy our BOS

Expect ~10% rev growth in Q2, accelerating to low teens in the second half of the year

Residential HVAC

Strong start to the year; Q2 performance will provide greater visibility for 2026

Expect flat revs in Q2, with growth returning in the second half, aided by easier prior-year comparisons

Prudent outlook of flat revs for 2026. Outlook to remain fluid as year evolves

Transport

TT forecast for transport markets remains unchanged, with an expected mid-single-digit decline for 2026

Improving fundamentals support a market trough in the first half, with recovery expected in late 2026 / early 2027

Expect TK to outperform end markets for FY; timing of large customer shipments may drive unevenness Qtr to Qtr

EMEA

EMEA Segment

Q1 results in line with expectations, excluding Middle East headwind of ~$25M revs and ~$0.02 EPS impact vs guidance; Middle East headwind is expected to continue in Q2, with a negative impact of $50M in revs and ~$0.05 EPS impact YOY

FY 2026 revs outlook modestly lowered to growth of +LSD

Commercial HVAC

Strong underlying performance. Expect -MSD% y/y revs decline in Q2, +MSD revs growth FY 2026

Transport

2026 market expected to be down HSD. Expect TK to outperform through innovation-led, diversified, resilient portfolio

Asia Pacific

Commercial HVAC & Transport

China remains dynamic due to macroeconomic conditions

The rest of Asia is expected to perform more strongly than China in 2026

FY 2026 revs outlook for the region remains flattish

2 0 2 6 G U I D A N C E

Leveraging Value Creation Flywheel to Drive Strong Revenue, EPS Growth and FCF in 2026

Organic

Revenues**

January 29th FY Guidance

Current FY Guidance*

+6% to +7%

(~+8.5% to ~+9.5% reported, incl. M&A & FX)

~+7%

(~+9.5% reported, incl M&A & FX)

Q2'26 expect ~+5%

Adj. EPS**

$14.65 to $14.85

(~+12% to ~+14%)

$14.75 to $14.95

(~+13% to ~+15%)

Q2'26 expect ~$4.20 - $4.25

Operating Leverage**

Organic 25%+

Free Cash Flow**

≥ Adj. Net Earnings

*See page 16 for additional details

** Includes certain Non-GAAP financial measures. See the company's Q1 2026 earnings release for additional details and reconciliations

Strong FCF Drives Continued Balanced Capital Deployment Strategy

Strengthen the core business and extend product & market leadership

Invest in new technology and innovation

Strategic investments in value-

accretive M&A

Expect to deliver FCF* ≥ 100%

of adjusted net earnings

Strengthening balance sheet

Strong A3/A- investment grade rating offers optionality as markets evolve

Expect to consistently deploy

100% of excess cash over time

Pay competitive and growing dividend over time

Repurchase shares when stock is trading below our calculated intrinsic value

* Includes certain Non-GAAP financial measures. See the company's Q1 2026 earnings release for additional details and reconciliations

B A L A N C E D C A P I T A L D E P L O Y M E N T

Strong, Balanced Capital Allocation on Track to Deploy $2.8B - $3.3B in 2026

Balanced Capital Deployment

~$1.9B to ~$2.4B

Debt retirement - -

*Excludes Stellar Energy and K&P investment which were committed to and included in FY 2025 capital deployment

**Excludes Jan 2026 share repurchases of $90M that were included in FY 2025; includes ~$100M share repurchases in April 2026

Increased dividend 12% in 2026 to $4.20 per share annualized, up 98% since the launch of Trane Technologies (March 2020)

YTD Actual & Committed

April 2026

Target FY 2026

Dividends

~$232M

~$0.9B

M&A, investments

~$340M*

Share repurchases of ~$0.3B in 2026,

~$4.4B remaining under repurchase authorization

Share repurchases

~$300M**

M&A pipeline remains active; maintain disciplined approach

Shares remain attractive, trading below our calculated intrinsic value

Strategic investments in capacity to support future growth, long-term capacity & master purchase agreements. Expect 2026 capex to be 2%-3% of revs vs 1%-

2% historical range

Topics of Interest

T O P I C S O F I N T E R E S T

ACT Projecting 2H 2026 Market Recovery, with Strong Growth Forecast for 2027 - 2030

ACT North America Trailer Market Outlook

Comments

Units in 000's

ACT 2026 trailer market forecast to ~26.8K, or up ~6% YOY,

with recovery weighted to 2H 2026

TT model more conservative, down ~MSD in FY 2026, mainly on slope of 2H recovery

ACT expects significant growth from 2027 to 2030

TT internal view aligned w/ markets showing strong growth, albeit at a more moderate rate

Underlying longer term refrigerated trailer demand

* Forecast shown in grey

Source: ACT April 2026 Forecast

remains solid, average ~42k units per year

Diversified Americas / EMEA Thermo King businesses poised to outperform end markets through continued innovation / execution

I N S U M M A R Y

Positioned to Outperform Over the Long-Term

Secular

Tailwinds

The markets we serve expected to continue to outgrow GDP, fueled by long-term sustainability megatrends

Sustainability Focused Innovation

We are positioned to outgrow the market and expand margins with market-leading sustainable innovations

Margin

Expansion

Financial Strength

Our best-in-class business operating system and uplifting culture enables us to maximize margins and cash generation

Our strong balance sheet, exceptional cash generation and balanced capital allocation strategy deliver significant value to shareholders

Appendix

2 0 2 6 G U I D A N C E

FY'26 Detailed Guidance for Modeling Purposes

Metric

FY Guidance

2026 Commentary

Organic Revenue*

~+7%

~25%+ organic leverage* for FY'26

Impact of combined M&A and FX on organic vs reported leverage expected to be ~700 bps (reported leverage lower on modest M&A OI contribution due to year one acquisition and integration related costs

Stellar Energy modestly EPS accretive in year one ~ $11M, or $0.03 (post acquisition and yr 1 integration costs)

M&A

~+2 pts

(+$0.03)

Other Items

~+0.5 pt

(+$0.05)

2Q'26: expect ~5% organic revenue growth, Adj. EPS $4.20-$4.25

FY'26 Other Items (unchanged):

~$300M corporate costs - Continued above-average incremental high ROI investment (normal range ~40 bps year) including digital, factory automation, sales force excellence, service business excellence, product innovation.

~$235M interest expense

~20% adj. effective tax rate

~222M diluted shares

FY'26 Other income / expense of ~$20M; includes pension expense of ~$5M per quarter. Other items in other inc. / exp. such as FX impacts are unknown / not forecast-able

FY'26 Other Items (updated):

Expect CapEx of 2% to 3% of 2026 revs vs prior expectations of high end of 1% to 2%

Reported Revenue

~ +9.5%

Adj. EPS*

$14.75 to $14.95

~+13% to ~+15%

*Includes certain Non-GAAP financial measures. See the company's

Q1 2026 earnings release for additional details and reconciliations.

SUSTAINABILITY COMMITMENTS

Trane Technologies Sustainability Strategy

Global Megatrends

Our 2030 Commitments

The Gigaton Challenge

Reduce one gigaton of carbon

Leading by Example

Achieve carbon neutral operations, zero

Opportunity for All

Invest in our people, culture and

CLIMATE CHANGE

DEMOGRAPHICS

emissions (CO2e) from our

customers' footprint

Where We Focus Our Efforts

waste to landfill, reduce embodied carbon by 40%, design for circularity

communities, build the workforce of the future

URBANIZATION

RESOURCE SCARCITY

DIGITAL CONNECTEDNESS

INDOOR AIR QUALITY (IAQ)

Operations

Emissions & energy reduction

Renewable energy Water usage

Technology & Innovation Energy efficiency & electrification Low-emission products & systems Digital solutions & services Product life cycle & circularity

Supply Chain

Responsible sourcing

Supplier sustainability

Employees Engagement Inclusion

Ethics & integrity Safety Development

Communities

Education

Access to cooling, food & wellness

Workforce development

Governance Board oversight Financial performance Public policy

Targets Align

We believe in ambitious goals founded in science.

Trane Technologies is 1st in industry to be 2050 Net-Zero Approved by the Science-Based Targets Initiative (SBTi)

with Global Priorities

Zero

Hunger

Quality

Education

Gender

Equality

Clean Water

& Sanitation

Affordable &

Clean Energy

Decent Work & Economic Growth

Industry, Innovation & Infrastructure

Sustainable Cities & Communities

Responsible Consumption & Production

Climate

Action

A LEGACY OF ACTION

Delivering performance through sustainability

SUSTAINABILITY LEADER

Widely Recognized for Sustainability Leadership and Uplifting Culture

Highly Regarded Sustainability Performance

14 Consecutive Years on

the North America Index Fourth consecutive year on the World Index

TIME World's Most

Sustainable Companies Second consecutive year, Ranked 20th overall

Just Capital Best of

American Business Industry Leader for 4th consecutive year

Financial Times Europe's

Climate Leaders 2025

Fifth consecutive year

Named to CDP Climate A List

Fourth consecutive year

Ethisphere 2026 World's

Most Ethical Companies®

Third consecutive year

Gold Medal

83/100, 98th percentile

Glassdoor's Best-Led

Companies 2025 First time on list, Ranked 35th overall

People and Citizenship

Fortune 2026 World's

Most Admired Companies

14 consecutive years

TIME World's Best Companies

Third consecutive year

Fortune Best Workplaces in

Manufacturing & Production

Second consecutive year

Forbes America's Best

Employers for Women 2025 Ranked 5th among companies in the Engineering/Manufacturing industry

"World's Most Ethical Companies" and "Ethisphere" names and marks are registered trademarks of Ethisphere LLC.

Fortune World's Most Admired Companies is a registered trademark of Fortune Media IP Limited and is used under

license. Fortune magazine, fortune.com, Fortune Media IP Limited and its affiliates are not affiliated with, and do not

endorse, Trane Technologies' products or services.

Q1 YoY Organic Revenues up 3%; Bookings up 24%

Organic* Revenue

2023

2024

2025

2026

Americas

+8%

+9%

+11%

+7%

+9%

+15%

+16%

+15%

+11%

+14%

+13%

+9%

+4%

+5%

+7%

+4%

EMEA

+15%

+8%

+3%

+8%

+4%

+5%

+8%

+7%

+6%

+3%

+2%

+3%

-1%

Asia

Pacific

+8%

+41%

-1%

flat

+10%

+16%

-3%

-21%

+1%

-3%

-8%

+9%

-6%

-3%

+3%

Total

+9%

+11%

+9%

+6%

+9%

+14%

+13%

+11%

+10%

+12%

+11%

+7%

+4%

+6%

+3%

Organic* Bookings

2023

2024

2025

2026

Americas

-4%

-8%

+7%

+13%

+2%

+20%

+23%

+8%

+1%

+13%

+5%

+7%

+12%

+26%

+12%

+29%

EMEA

+10%

+14%

+12%

+10%

+11%

+7%

+10%

+9%

+13%

-2%

+14%

+9%

+8%

-9%

Asia Pacific

+13%

+6%

+12%

+2%

+8%

+6%

flat

-31%

+8%

-5%

-13%

-17%

+32%

+1%

-2%

+26%

Total

-1%

-5%

+8%

+12%

+3%

+17%

+19%

+5%

+2%

+11%

+4%

+13%

+22%

+11%

+24%

*Non-GAAP financial measures. See the company's Q1 2026 earnings release for additional details and reconciliations.

Disclaimer

Trane Technologies plc published this content on April 30, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 30, 2026 at 11:01 UTC.