Trane Technologies’ second quarter performance met Wall Street’s revenue expectations, but the market reacted negatively, reflecting investor concern over ongoing headwinds in residential HVAC and margin stability. Management attributed the quarter’s results to significant growth in Americas commercial HVAC—particularly in complex applied solutions—while acknowledging that residential revenues fell short due to a temporary shortage of R-454B refrigerant cylinders. CEO David Regnery noted, “Orders for Applied Solutions surged by over 60% in the quarter,” highlighting robust demand across key verticals like healthcare, government, and data centers.
Is now the time to buy TT? Find out in our full research report (it’s free).
Trane Technologies (TT) Q2 CY2025 Highlights:
- Revenue: $5.75 billion vs analyst estimates of $5.76 billion (8.3% year-on-year growth, in line)
- Adjusted EPS: $3.88 vs analyst estimates of $3.79 (2.3% beat)
- Adjusted EBITDA: $1.25 billion vs analyst estimates of $1.24 billion (21.8% margin, 0.8% beat)
- Management raised its full-year Adjusted EPS guidance to $13.05 at the midpoint, a 2% increase
- Operating Margin: 20.3%, in line with the same quarter last year
- Backlog: $5.63 trillion at quarter end
- Market Capitalization: $95.25 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Trane Technologies’s Q2 Earnings Call
- Christopher M. Snyder (Morgan Stanley) asked about the drivers behind the surge in Americas commercial HVAC orders. CEO David Regnery attributed growth to broad-based demand across multiple verticals and emphasized the strong project pipeline.
- Julian C.H. Mitchell (Barclays) questioned the outlook for residential HVAC and supply chain recovery. Regnery explained that the R-454B refrigerant shortage was largely behind them and expects inventory normalization by year-end.
- Scott Reed Davis (Melius Research) inquired about confidence in China and Asia Pacific. CFO Chris Kuehn noted sequentials are improving post-credit policy changes, but the environment remains choppy and flat growth is guided for the year.
- Amit Singh Mehrotra (UBS) sought clarity on backlog durability and visibility into 2026. Kuehn responded that backlog remains elevated, with significant bookings building for the next year, providing visibility into future revenue streams.
- Charles Stephen Tusa (JPMorgan) pressed for details on residential segment pricing and volume. Kuehn confirmed that low double-digit price/mix is expected in the back half, with volumes down due to supply chain impacts but anticipated to normalize.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory analyst team will be monitoring (1) the pace of recovery in residential HVAC as supply chain constraints resolve, (2) continued expansion and monetization of connected service offerings, and (3) the ability of the commercial HVAC segment to sustain broad-based demand and margin accretion. Updates on tariff impacts and execution of EMEA channel investments will also be key signposts for fundamental progress.
Trane Technologies currently trades at $428.14, down from $471.23 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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