Carrier Global (CARR) Q4 2025 earnings summary

Executive summary

• 2025 sales were $21.75 billion, with organic sales down 1% year-over-year, mainly due to declines in residential and light commercial segments, partially offset by strong commercial HVAC, aftermarket, and data center growth.

• Adjusted operating profit was $3.3 billion, up 7% year-over-year, and adjusted EPS was $2.59, up 1% year-over-year.

• Commercial HVAC and aftermarket achieved double-digit growth globally for the fifth consecutive year, with significant share gains and margin improvement.

• Data center business grew to ~$1 billion in 2025, with orders up more than 5x in Q4 and sales expected to rise by ~50% in 2026.

• Over $3.7 billion was returned to shareholders via buybacks and dividends, while maintaining a focus on high-return investments and a strong balance sheet.

Financial highlights

• Q4 2025 sales were $4.84 billion, down 6% year-over-year; full-year sales were $21.75 billion, down 3%.

• Q4 adjusted operating profit was $455 million, and adjusted EPS was $0.34, both down significantly year-over-year due to lower volumes in higher-margin residential and light commercial.

• Full-year adjusted operating margin was 15.1%, down 70bps year-over-year.

• Free cash flow for 2025 was $2.1 billion, in line with expectations.

• Total company orders rose over 15% in Q4, led by commercial HVAC strength and record service agreement orders.

Outlook and guidance

• 2026 sales are projected at ~$22 billion, with organic growth expected to be flat to low mid-single digits and a $350 million headwind from the Riello exit.

• Adjusted operating profit guidance is ~$3.4 billion, with adjusted EPS expected to be ~$2.80, up high single digits versus 2025, aided by lower tax rate and share count.

• Free cash flow is expected to be ~$2 billion in 2026, with $1.5 billion in planned share repurchases.

• Commercial HVAC, aftermarket, and data center sales are expected to continue double-digit growth, offset by ongoing softness in short-cycle businesses.

• Q1 2026 revenues expected at ~$5 billion, with organic revenue down high single digits and CSA Residential down over 20%.