Trane Technologies (TT) Q3 2026 earnings summary

Executive summary

• Q3 organic revenue grew 16.2%, bookings rose 20%, and adjusted continuing EPS increased 25% to $4.86; EPS growth was 23% excluding a ~$0.10 tax-timing benefit.

• Backlog reached $12.5B, up 73% YoY, with book-to-bill at 107%.

• FY organic revenue outlook increased to ~11%; adjusted EPS guidance was reaffirmed at $15.20–$15.30.

Financial highlights

• Q3 revenue was $6,759.7M, up 17.7% reported and 16.2% organically; organic growth included 15.7% volume and 0.5% pricing.

• Adjusted continuing EPS was $4.86 versus $3.88; GAAP diluted EPS was $4.74 versus $3.78.

• Adjusted EBITDA was $1.447B, up 16%; adjusted EBITDA margin was 21.4%, down 40 bps YoY.

• Nine-month operating cash flow was $3,060.1M and free cash flow was $2,827.5M, versus $2,054.1M and $1,786.0M, respectively.

• Gross margin was 35.3% in Q3, down 160 bps, primarily reflecting inflation and investment, partly offset by productivity and pricing.

Outlook and guidance

• FY 2026 organic revenue growth guidance rose to ~11% from ~9%; reported revenue growth guidance increased to ~13.5% from ~11.5%.

• FY adjusted continuing EPS guidance remained $15.20–$15.30, representing expected growth of ~16%–17%.

• Q4 organic revenue growth is expected at ~14.5%, with adjusted EPS of $3.40–$3.50, including a $0.10 higher-tax-rate headwind.

• FY free cash flow is expected to exceed adjusted net earnings; capital expenditures are forecast at ~2% of revenue.

• FY price realization outlook was reduced to ~1 point; organic leverage is expected in the low 20s, while the long-term algorithm remains 25%+.