Trane Technologies started 2025 with results that exceeded Wall Street expectations, supported by broad-based demand across its core HVAC businesses. Management highlighted robust organic revenue growth, margin improvement, and strong order activity—particularly in Commercial HVAC and Services. CEO Dave Regnery attributed the quarter’s outperformance to effective execution of the company’s direct sales strategy, ongoing investments in product innovation, and resilience in managing supply chain and inflationary pressures. The company noted that its backlog and project pipelines continue to grow, pointing to sustained customer demand across diverse verticals such as data centers, healthcare, and education.
Is now the time to buy TT? Find out in our full research report (it’s free).
Trane Technologies (TT) Q1 CY2025 Highlights:
- Revenue: $4.69 billion vs analyst estimates of $4.46 billion (11.2% year-on-year growth, 5% beat)
- Adjusted EPS: $2.45 vs analyst estimates of $2.20 (11.4% beat)
- Adjusted EBITDA: $850.9 million vs analyst estimates of $783.5 million (18.1% margin, 8.6% beat)
- Management reiterated its full-year Adjusted EPS guidance of $12.80 at the midpoint
- Operating Margin: 17.5%, up from 15% in the same quarter last year
- Backlog: $7.3 billion at quarter end
- Market Capitalization: $94.1 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 Trane Technologies’s Q1 Earnings Call
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Julian Mitchell (Barclays) asked about shifts in Commercial HVAC vertical demand and risks in light commercial markets. CEO Dave Regnery emphasized broad-based strength and a robust pipeline, while CFO Chris Kuehn noted applied markets will outperform unitary this year.
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Chris Snyder (Morgan Stanley) questioned potential project delays due to cost uncertainty in HVAC. Regnery responded that attractive project paybacks and energy savings are fueling continued demand, and he has not observed widespread delays.
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Andy Kaplowitz (Citigroup) inquired about EMEA margin pressures and investment timing. Regnery and Kuehn said Q1 margin compression was due to reinvestment and seasonality, but highlighted strong order rates and confidence in full-year margin recovery.
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Joe Ritchie (Goldman Sachs) asked about the refrigerant transition in residential and price elasticity amid tariffs. Regnery confirmed most shipments are now 454B units and expects channel inventories to normalize, while Kuehn described “surgical” pricing actions with minimal pushback so far.
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Nigel Coe (Wolfe Research) sought clarity on residential share gains due to the refrigerant transition and tariff exposure. Regnery cautioned against reading too much into quarterly share shifts and emphasized that Trane’s domestic manufacturing may become a competitive advantage if tariffs persist.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be watching (1) the pace of backlog conversion into actual sales in Commercial HVAC, (2) the effectiveness of supply chain and pricing actions in fully offsetting tariff and inflation costs, and (3) stabilization and margin recovery in the EMEA segment as recent investments are absorbed. Additionally, the trajectory of the Transport segment’s expected rebound and continued adoption of 454B refrigerant products will serve as important signposts for execution.
Trane Technologies currently trades at $423, up from $353.80 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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