Trane Technologies (TT) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered robust results with organic revenues up 13%, adjusted EPS up 23%, and record bookings of $5.3 billion, driven by strong execution and broad-based growth, especially in Americas and EMEA segments.

• Backlog reached $7.5 billion, with $2.8 billion for 2025 and beyond, providing strong visibility into future periods.

• Adjusted operating and EBITDA margins expanded by 140 basis points year-over-year, reflecting productivity gains and pricing actions.

• Continued heavy reinvestment in innovation, digital transformation, and strategic initiatives, including M&A and sustainability efforts.

• Balanced capital allocation with significant investments in dividends, share repurchases, and M&A, supporting long-term value creation.

Financial highlights

• Q2 2024 net revenues were $5.3 billion, up 13% year-over-year; adjusted EBITDA margin reached 21.1%, and adjusted operating margin was 19.7%.

• Adjusted continuing EPS was $3.30, up 23% from Q2 2023; GAAP EPS was $3.33, up 30%.

• Americas commercial HVAC bookings up over 20%, revenue up 16%; residential bookings up 30%, revenues up low teens.

• EMEA commercial HVAC bookings up 20%, revenues up high single digits; Asia Pacific revenues down low single digits on tough comps.

• Free cash flow for the first half of 2024 was $810.1 million, with strong cash conversion and working capital improvements.

Outlook and guidance

• Raised full-year 2024 organic and reported revenue growth guidance to ~10%, with adjusted EPS expected at ~$10.80.

• Q3 2024 organic revenue growth expected at ~8.5%, with adjusted EPS of $3.15–$3.20.

• Free cash flow conversion to adjusted net earnings expected at or above 100%.

• Expecting fourth consecutive year of 20%+ adjusted EPS growth.

• Guidance raised above prior range due to strong first half and positive outlook.