Otis Worldwide (OTIS) Q4 2025 earnings summary

Executive summary

• Achieved record adjusted free cash flow of $1.6B for 2025 and $817M in Q4, returning $1.5B to shareholders via dividends and buybacks.

• Service-driven business model delivered 5% organic service sales growth and 11% adjusted EPS growth in Q4, with modernization orders up 43%.

• Maintained industry-leading maintenance portfolio at 2.5M units, with 4% growth for the 14th consecutive quarter and 1.1M connected units.

• Modernization backlog up 30% at constant currency, positioning for multi-year growth; new equipment backlog up 2% year-over-year, 9% excluding China.

• Launched new AI-driven products and expanded IoT connectivity, supporting urban renewal and predictive maintenance.

Financial highlights

• Q4 2025 net sales: $3.8B; full year: $14.4B; organic sales up 1% in Q4 and flat for the year.

• Adjusted operating profit margin expanded 70 bps to 16.6% in Q4; full year margin 16.9%.

• Adjusted EPS up 11% in Q4 to $1.03 and 6% for the year to $4.05.

• Adjusted free cash flow for FY 2025 was $1.58B, up 20% year-over-year.

• Returned $1.5B to shareholders in 2025, including $800M in share repurchases.

Outlook and guidance

• 2026 organic sales expected to rise low- to mid-single digits, led by service growth; net sales guidance: $15.0–$15.3B.

• Service organic sales to accelerate mid to high single digits; new equipment sales expected down low single digits to flat.

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

• Dividend payout ratio targeted at 40%; $800M in share repurchases planned.

• Adjusted operating profit projected at $2.5–$2.6B for 2026.