Otis Worldwide (OTIS) Q4 2025 earnings summary

Executive summary

• Achieved record adjusted free cash flow of $1.6B for 2025, with $1.5B returned to shareholders via dividends and buybacks, and $100M invested in bolt-on acquisitions.

• Ended 2025 with strong momentum, record modernization orders (up 43% in Q4), and an unprecedented backlog, positioning for growth in 2026.

• Maintained the largest maintenance portfolio in the industry, growing 4% for the 14th consecutive quarter to 2.5M units, with 1.1M connected units.

• Successfully executed transformation initiatives, including the UpLift program and China joint venture buyout, delivering $240M in run-rate savings.

• Launched new AI-driven products and IoT solutions, supporting urban renewal and digital expansion.

Financial highlights

• Q4 organic sales grew 1%, with service up 5% and modernization up 9%; Q4 sales reached $3.8B.

• Adjusted operating profit margin expanded 70 bps to 16.6% in Q4; adjusted EPS grew 11% in Q4 and 6% for the year, reaching $4.05.

• Modernization orders increased 43% in Q4, with backlog up 30% at constant currency.

• FY 2025 sales totaled $14.4B, adjusted operating profit was $2.43B, and adjusted free cash flow was $1.58B, up 20% year-over-year.

• Share repurchases totaled $800M in 2025.

Outlook and guidance

• 2026 organic sales expected to increase low- to mid-single digits, driven by service growth and moderating new equipment declines.

• Service segment projected to grow mid- to high-single digits, with maintenance and repair accelerating and modernization revenue in the teens.

• Adjusted EPS expected to grow mid- to high-single digits; adjusted free cash flow guidance of $1.6B–$1.7B.

• New equipment sales in China expected to decline, but order trends are improving; Americas and EMEA expected to return to growth.

• Dividend payout ratio targeted at 40%, with $800M in share repurchases planned for 2026.