Trane Technologies (TT) Q1 2026 earnings summary

Executive summary

• Q1 2026 saw organic bookings up 24% year-over-year, with a record backlog of $10.7 billion, up over 30% from year-end 2025, led by Americas Commercial HVAC up ~40%.

• Organic revenue grew 3%, reported revenues up 6% to $5.0 billion, driven by Americas commercial HVAC and double-digit global services growth.

• Adjusted EPS increased 7% year-over-year to $2.63, with full-year revenue and EPS guidance raised on strong demand and execution.

• Major acquisitions included Stellar Energy and LiquidStack, enhancing data center cooling capabilities and adding ~$1 billion to backlog.

• Operational excellence, a strong balance sheet, and continued investment in innovation and capacity expansion support ongoing growth.

Financial highlights

• Net revenue for Q1 2026 was $4.97 billion, up 6% reported and 3% organically from Q1 2025.

• Adjusted EBITDA margin was 18.1%, down 40 bps year-over-year; adjusted operating margin was 17.7%, down 20 bps.

• Adjusted continuing EPS was $2.63, up from $2.45 in Q1 2025.

• Americas and Asia operating margins increased by 10 and 90 basis points, respectively.

• Free cash flow increased to $573.3 million from $230.2 million in Q1 2025.

Outlook and guidance

• Full-year 2026 organic revenue growth guidance raised to ~7%, with reported revenue growth expected at ~9.5%.

• Adjusted EPS guidance increased to $14.75–$14.95, or 13%-15% growth.

• Q2 2026 expected organic revenue growth ~5%, adjusted EPS $4.20–$4.25.

• Residential revenue outlook revised to flat for 2026, with growth expected in the second half.

• Americas transport market expected to decline mid-single digits for 2026, with recovery in late 2026 and strong 2027.

• EMEA expects $50 million Q2 revenue headwind and $0.05 EPS impact from Middle East events.