Dive Brief:
- Trane Technologies ended 2024 with revenue up 12% year over year to $19.8 billion, according to its earnings report Thursday. In the fourth quarter, the company reported $4.9 billion in revenue, up 10% year over year.
- Organic bookings grew 2% on the strength of its Americas commercial HVAC segment, which grew by “high-single digits” compared to Q4 2023. Full-year bookings grew 11% year over year, to $20.3 billion, with Americas commercial HVAC up 14% in that time.
- CEO David Regnery said on an earnings call that revenue for the commercial HVAC Americas was up over 20%, with growth in 13 of the company’s 14 vertical sectors. The exception was life science, “but we're very optimistic about the future there,” he said.
Dive Insight:
Trane Technologies has a $6.75 billion backlog heading into 2025, per the report. The company says it saw strong performance across its geographic business segments, led by its commercial HVAC businesses. Fourth-quarter organic bookings in the Americas segment were up more than 30% on a three-year stack, Regnery said on the call.
The broad-based demand for commercial HVAC in the Americas led Q4 revenues to increase by percentages in the mid-teens year over year in both equipment and services, Regnery said.
“Our teams are excelling in complex, [custom-made] applied projects,” which are key to the multiyear capital expenditure cycle, Regnery said. Organic revenue growth for its Americas applied systems business is up 120% on a three-year stack. Applied systems offer a “durable service tail of eight times to 10 times the initial equipment cost over their lifespan, meaning our strong growth in applied solutions presents tremendous service opportunities with higher margins that are largely still ahead of us,” he said.
Looking ahead, Trane Technologies expects its Americas segment to show continued strong execution, broad-based bookings and revenue growth across core verticals in its commercial HVAC segment, with strength in data centers, education, healthcare and services, per the Q4 presentation. The company expects approximately 6% to 7% organic revenue growth in the first quarter of 2025, driven by continued strength in commercial HVAC, Trane Technologies Executive Vice President and CFO Chris Kuehn said on the call.
Trane Technologies deployed approximately $470 million for mergers and acquisitions in 2024, making what Kuehn called “several strategic bolt-on acquisitions, enhancing our AI and digital building management capabilities, expanding specialized refrigerated transport, and making multiple channel investments.”
