Trane Technologies (TT) Oppenheimer 21st Annual Industrial Growth Virtual Conference summary

Business performance and outlook

• Strong start to the year with robust Q1 results and significant revenue acceleration expected in the second half, setting up for a strong 2026.

• Bookings growth up 24% in the quarter, with backlog reaching an all-time high of $10.7 billion, up 30% from year-end.

• Service segment up double digits, now about one-third of enterprise revenues, supporting a raised full-year 2026 guidance.

• Commercial HVAC backlog grew by $2.7 billion last quarter, with $1.7 billion of that organic, driven by both new customers and increased wallet share.

• Investments in capacity and digital tools are expected to drive high-20s organic leverage in the second half of the year.

Modular and data center solutions

• Stellar acquisition enables production of modular chiller plants, initially focused on data centers but with plans to expand into healthcare and other verticals.

• Modular solutions offer labor and quality benefits, reducing build time from three months to as little as six weeks.

• Stellar business targeted to reach $1 billion in revenue with mid-teen EBITDA margins in 2-3 years, supported by new factory investments.

• Long-term capacity agreements with hyperscalers provide multi-year demand visibility, justifying increased CapEx and capacity expansion.

• Technology roadmap includes rapid product evolution and close collaboration with customers like NVIDIA to meet future cooling needs.

Service and productivity enhancements

• Global technician force at 7,500, with 4,500 in the Americas, supported by expanded training centers and digital tools for productivity.

• Digital investments, such as BrainBox AI, enable predictive maintenance and more efficient technician deployment.

• Service margins are accretive, with services comprising about half of commercial HVAC revenues in both Americas and Europe.

• Service business has grown low double digits over five years, with incremental margins of 25% or better.

• Service revenues from new data center installations expected to ramp up over several years.