Carrier CARR Q4 2025 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool

Thu, February 5, 2026 astatine 10:13 AM CST 48 min read

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Feb. 5, 2026 astatine 7:30 a.m. ET

• Chairman & Chief Executive Officer — David Gitlin

• Chief Financial Officer — Patrick Goris

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David Gitlin: Thanks, Mike, and bully morning, everyone. 2025 was an important twelvemonth for Carrier. The abbreviated rhythm residential and airy commercialized markets softened much than we expected successful the 2nd fractional of the year. We made meaningful advancement connected our strategical priorities and reached large milestones, including increasing our information halfway concern to astir $1 billion. Notably, adjacent with 10%, and airy commercialized down astir 20%, full institution integrated income were down astir 1% arsenic we continued to thrust maturation successful our agelong rhythm and aftermarket businesses. We besides reduced transmission inventory and lowered overhead, portion continuing to put successful exertion differentiation, salespeople, and technicians. Those actions presumption america for stronger maturation erstwhile our abbreviated rhythm markets recover.

We had our 5th consecutive twelvemonth of double-digit maturation successful commercialized HVAC, portion continuing to summation stock and summation margins. Aftermarket was besides up treble digits for the 5th consecutive year. We offset tariffs with assertive outgo and pricing actions, drove beardown worldly productivity, and took decisive overhead outgo actions. And arsenic you'll spot successful our outlook, the outgo actions that we execute into 2025 volition present implicit $100 cardinal of savings successful 2026. Finally, we distributed $3.7 cardinal to our shareholders done buybacks and dividends. In presumption of superior allocation, we stay focused connected investing successful the highest instrumentality opportunities, maintaining a beardown equilibrium sheet, and returning currency to shareholders.

We volition proceed to absorption connected outsized maturation successful products, aftermarket, and strategy offerings, and you tin spot the advancement we're making connected each 3 maturation vectors starting with products connected descent four. Our information halfway investments are delivering results with 4th fourth CSA information halfway orders up much than 5 times. We are inactive successful the aboriginal innings, and our expanded portfolio present addresses fundamentally each large information halfway chiller applications. Our stock of water-cooled chillers has accrued 4 times since spin, and with our precocious introduced Maglev bearing air-cooled chillers, we spot meaningful stock accidental determination arsenic well. Key differentiators see speedy restart, escaped cooling, and starring astatine elevated ambient temperatures.

We introduced our archetypal CDU for liquid cooling successful 2025 and program further higher capableness CDUs up to 5 megawatts successful 2026. Over the past mates of years, we person expanded our commercialized HVAC motor laboratory and chiller manufacturing capableness globally and person added hundreds of technicians. These multiyear investments person positioned america to outgrow the commercialized HVAC marketplace arsenic reflected successful our 2026 outlook, with double-digit gross growth, including information centers up astir 50%. Aftermarket besides remains a bully quality communicative for america arsenic you tin spot connected descent five. Our playbook works, and we proceed to amended upon it. Three years ago, we had 17,000 chillers connected. Today, it is implicit 70,000.