Otis Worldwide Corporation

Thank you for joining us. We hope that everyone listening is safe and well. 2025 marked our fifth full year as an independent public company, a milestone that reflects our resilience and leadership in shaping the future of urban mobility. At the heart of this success are our 72,000 colleagues worldwide whose dedication to our purpose has made this possible. Every day we move 2.5 billion people safely and reliably to and maintain approximately 2.5 million units across the globe, earning the trust of customers and passengers alike. That trust remains our highest priority. This year, we achieved multiple important milestones, ending the year with strong momentum heading into 2026. We secured record modernization orders, building an unprecedented backlog, and our new equipment backlog grew. We achieved record adjusted free cash flow of $817 million in the fourth quarter, reflecting our continued focus on working capital efficiencies and collections. We continued to grow the largest maintenance portfolio in the industry. We successfully executed the uplift program and completed our China transformation initiatives, including buying out the minority shareholder of one of our joint ventures in China, Otis Electric, while driving operational excellence across our business. For the year, we generated $1.6 billion of adjusted free cash flow and returned approximately $1.5 billion to shareholders through dividends and share repurchases, while investing approximately $100 million in targeted bolt-on acquisitions to strengthen our service portfolio and expand our presence in key markets. With these results, our strong backlog and the largest maintenance portfolio in the industry We are confident that our strategy will continue to deliver attractive results in 2026 and beyond. Moving to slide three. Otis closed the year with solid performance in the fourth quarter, driven by our service-driven business model. Organic sales grew 1% in the quarter, with service up 5%, including broad-based growth across all lines of business. Maintenance and repair grew 4%, while modernization increased 9%. Adjusted operating profit margin expanded 70 basis points, driven by a 100 basis point improvement in service margin. We delivered double-digit adjusted EPS growth in the quarter, up 11%, which was the highest level this year and our strongest performance in the last six quarters. At approximately 2.5 million units, the largest in the industry, our maintenance portfolio grew 4% for the 14th consecutive quarter, allowing us to grow and invest in our global service network and demonstrating the heart of our flywheel strategy. Modernization was a standout in the quarter as orders increased 43%, and we ended the quarter with the backlog up 30% at constant currency, the highest since spin, and positioning us well for 2026. We are driving meaningful modernization growth through our industrialized manufacturing and installation capabilities and our commercial strategy, including phased packages that limit disruption and provide budgeting options for our customers. The tremendous modernization opportunity ahead remains evergreen, as by the time all of the aged units are modernized, they will be ready to be refurbished again. Quarterly adjusted free cash flow reached $817 million, another record since spin, reflecting our continued focus on collections and working capital efficiency. And we continue to be an innovation leader. For example, in November, at the 8th China International Import Expo, Otis unveiled Gen 3 Comfort for residential modernization, Skyrise Mod and Link Mod for scalable high-rise elevator and escalator modernizations, and upgraded Smart Cab and new AI tools, including the Otis AI Inspection Robot and the Otis AI Agent to enhance safety, diagnostics, and real-time collaboration. These solutions bring AI-driven safety, connected service capabilities, and enhanced accessibility to customers and passengers, supporting urban renewal and aging communities. We also recently launched our Gen 3 product family in EMEA. Gen 3 builds on our Gen 2 platform and comes standard with Otis 1, our Internet of Things connectivity solution, enabling predictive maintenance, real-time health monitoring, and remote intervention. which improves uptime and service quality. These products complement Otis Gen 360 and comply with the latest and most stringent safety standards, while providing customers with smooth, comfortable, and digitally connected rides in stylish cabins that can be customized to meet their unique needs. Our Otis One connected units continue to grow globally as we approach 1.1 million connected units, providing predictive maintenance, data-driven proactive repairs, and valuable application of AI for productivity and customer value. The growing connectivity is also driving subscription revenue, which increased 35% in 2025. Turning to the full year, Otis delivered solid organic service sales growth of 5% and expanded adjusted operating profit margin by 40 basis points. Since SPIN, we have improved margin by 30 basis points or more each year underscoring our steady operational progress and the discipline focus that enables consistent delivery. Adjusted EPS grew 6% and we generated approximately $1.6 billion of adjusted free cash flow for the year. This strong cash flow enabled us to return $1.5 billion to shareholders through dividends and share repurchases. With a positive new equipment backlog at year end and with modernization backlog at an all-time high, This level of free cash flow conversion should be sustainable. Turning to our orders performance on slide four. Orders for combined new equipment and modernization increased 10% during the quarter, driven by solid performance in EMEA and the Americas. Our total backlog at constant currency grew 8%, and when excluding China, the increase was 14%. New equipment orders at constant currency declined 2% in the quarter. We saw strength in EMEA up mid-single digits, driven by growth in Western and Southern Europe, and in the Americas, which also increased mid-single digits. This was offset by a high teens decline in Asia Pacific due to a tough comparison. We continued to see improvement in China, which declined mid-single digits in the quarter and in the second half in line with our expectations. At constant currency, our new equipment backlog increased 2% year-over-year, and excluding China, it grew 9%. Modernization closed the year exceptionally well, delivering the highest quarterly order since spin and surpassing the record we set in Q3 of this year. Orders grew 43% at constant currency, with over 100% growth in EMEA, over 20% growth in the Americas, and high teens growth in Asia Pacific. We ended the quarter with a modernization backlog of 30%, reinforcing our view that we remain in the early stages of a multi-year modernization cycle supported by the aging global install base. Our service portfolio grew 4% in 2025, bringing it approximately to 2.5 million units and strengthening our leading position globally with low Teams growth in China, high single-digit growth in Asia Pacific, low single-digit growth in the Americas, and approximately flat performance in EMEA. Recaptures and cancellations remained roughly net neutral for the year, making conversions the primary driver of portfolio growth, consistent with past years. We ended the year with a stable retention rate outside of China, enabled by our ongoing focus on investment and service excellence. This represents an improving trend in our retention rate, excluding China as anticipated. As you know, the Chinese market exhibits structurally higher churn due to competitive dynamics and shorter contract duration. Our global teams executed well this quarter, securing strategic customer wins that reflect the strength of our solutions and the trust our customers place in Otis. As we install, service, and modernize their elevators and escalators, we deepen relationships and build loyalty that supports long-term recurring revenue growth. In the Americas, Otis secured a major new equipment project in Dallas to provide 39 elevators for a new pediatric hospital developed by Children's Health and the University of Texas Southwestern. The scope includes 26 Skyrise units and two Gen 3 elevators with our Otis One Pro connected service platform. This project reinforces Otis's role in delivering advanced vertical transportation for the critical healthcare infrastructure. In China, Otis was selected to supply more than 490 heavy-duty public escalators for Shanghai Metro Line 19. These escalators are equipped with sensors that enable real-time remote performance monitoring. The new line will span 29 miles and include 34 stations, and we are proud to continue our long-standing relationship with the Shanghai Metro, where Otis already supports approximately 2,700 elevators and escalators across 13 lines. In London, Otis won a comprehensive service and modernization contract program for 172 escalators across the London Underground, bringing the total number of units we service for Transport for London to more than 300. Our teams will maintain, refurbish, or replace units, ensuring safety and reliability for equipment that operates up to 20 hours a day and supports 1.2 billion annual passenger journeys. Building on a legacy that began with the first Otis passenger escalator at Earls Court in 1911, Otis continues to deliver trusted expertise and innovation for urban mobility in the capital of the United Kingdom. In Kuala Lumpur, Otis has secured a landmark new equipment project at Armani-Hulson KLCC, delivering 26 Skyrise elevator systems featuring our Compass 360 destination management technology, Otis One IoT solution, and eView smart screens to enhance passenger experience. Working with Armani Group and project developer Veselin, this collaboration brings advanced vertical mobility and innovative design to one of Malaysia's most prestigious developments. Turning to our fourth quarter results on slide five. Otis delivered net sales of $3.8 billion with organic sales up 1%. Adjusted operating profit, excluding an $18 million foreign exchange tailwind, increased by $29 million. Adjusted operating profit margin expanded by 70 basis points to 16.6%, driven by strength in service margin, which increased 100 basis points in the quarter. Adjusted EPS grew approximately 11% or 10 cents in the quarter, driven by strong operational performance, favorable foreign exchange rates, and a lower share count. With that, I'll turn it over to Christina to walk through our results in more detail.

Thank you, Judy. Starting with service on slide six. Service organic sales grew 5% in the quarter, with growth across all lines of business. as our service flywheel continues to deliver solid top-line results. Maintenance and repair organic sales grew 4%, with maintenance driven by 4% portfolio growth and 3% positive price, partially offset by mix and churn. Repair growth was solid, up mid-single digits, but slightly softer than our expectations heading into the quarter, as we prioritized investment in service excellence which should drive improved retention over time. These investments, together with our growing portfolio and continued high-end field mechanics, should accelerate maintenance and repair top-line growth in 2026 and beyond. Modernization organic sales grew 9%, with notable strength in China, where sales more than doubled. And as Judy mentioned earlier, we are pleased with the progress in modernization orders and our record backlog, up 30% at constant currency, which establishes a solid foundation for sustained modernization growth in 2026. Note that our strong modernization orders in the quarter include the large Transport for London project that Judy mentioned earlier. We are just scratching the surface of the modernization opportunity ahead, As units from past construction cycles continue to age, they should create a durable multi-year tailwind for modernizations. Service operating profit of $638 million increased $49 million at constant currency, with higher volume, favorable pricing, productivity and gains on asset sales, more than upsetting higher labor costs and mixed insurance. Operating profit margins expanded 100 basis points to 25.5% in the quarter, the strongest margin expansion of the year, matching our record service margins from last quarter. This performance reflects the continued strength and the discipline of our service execution. Turning to new equipment on slide seven. New equipment organic sales declined 6% in the quarter as growth in EMEA and Asia-Pacific more than offset by decline in China and the Americas. EMEA sales grew 6%, driven by a strength in the Middle East and Southern Europe. Asia-Pacific grew low single digits, supported by solid growth in India and Japan, partially offset by weakness in Korea. The Americas declined 5%, slightly below our expectations due to timing of project execution. However, with a strong orders performance for six consecutive quarters, the region's growing backlog provides a clear line of sight for a return to positive new equipment sales growth in 2026. Overall, our total new equipment backlog increased 2% after seven consecutive quarters of decline, and excluding China, new equipment backlog grew 9%. And while China remains down on a year-over-year basis, we are encouraged by the improving order strength that Judy mentioned earlier. New equipment operating profit of $47 million declined $15 million at constant currency, and operating profit margins declined 110 basis points to 3.6%. As mentioned in previous quarters, The new equipment margin rate is more sensitive to small variations in operating profit, given the smaller size of the business segment. The operating profit decline was driven by lower volumes, unfavorable price, tariff headwinds, and mix. These were partially offset by productivity, including the benefits of restructuring actions. Moving to the full year 2025 adjusted ETS bridge on slide 8. 2025 adjusted EPS increased $0.22 to $4.05, up 6% year-over-year, reflecting solid operational execution and the continued contribution from our service business. Below the line, lower share count and non-controlling interest supported EPS growth, more than offsetting higher interest expense. Note that the operational bar on this chart now includes the impact of tariffs, which was previously combined with the impact of foreign exchange rates, as tariffs become part of the baseline for 2026. Additionally, we finished the year with our best fourth quarter cash flow since 2016, supported by excellent collections and sustained working capital execution. Overall, we closed the year with solid operating performance, confirming the resilience of our strategy and service model with our record modernization backlog, continued strength in maintenance and repair, and a growing new equipment backlog, we are well positioned to deliver attractive growth again in 2026. I will now turn it back to Judy to discuss our 2026 outlook.

Thanks, Cristina. Starting on slide 9 with the market outlook, We expect the global new equipment market outlook to continue moving towards stabilization in 2026. Within the Americas, in 2025, the region grew low single digits, with mid-single-digit growth in U.S. and Canada, driven by demand in residential, health care, and data centers. We expect this positive trend to continue this year. In the MEA, the market grew low single digits in 2025, with notable strength in Spain, Germany, and the Middle East, partially offset by declines in Italy and France. We expect EMEA to continue to grow this year, driven by broad-based growth in both Europe and the Middle East. Asia Pacific is anticipated to accelerate in 2026 after growing low single digits in 2025. We anticipate this acceleration to be driven by steady growth in India and Southeast Asia, a slight improvement in Japan, and stabilization in Korea. Within China, the pace of decline moderated in the second half of 2025 in line with our expectations, and we expect the trend to continue improving. In total, we expect Asia to decline in 2026. Turning to modernization, as of the end of 2025, there were almost 9 million units in the 23 million unit global install base in the prime age for modernization. This population includes units over 15 years old in China and over 20 years old in the rest of the world. These aging units drove a 13% increase in the modernization market in 2025 in dollar terms with synchronous growth globally. We expect this trend to continue for the foreseeable future due to past construction cycles and continued aging of the installed base. Turning to our sales outlook on slide 10. Total organic sales are expected to increase low to mid single digits, driven by accelerating growth in our service segment, as well as moderating declines in new equipment sales, which are expected to be down low single digits to flat. Within service, we expect mid to high single digit growth, with acceleration in both maintenance and repair, and modernization, building on the strong ramp up in the second half of 2025. Maintenance and repair should benefit from this year's mid-single-digit portfolio growth, solid pricing, and strong field performance. All of our regions are now running under the uplift operating model with clear focus on service excellence and customer centricity. In addition, in 2025, we continued to ramp up our resources, adding approximately 1,000 field professionals in anticipation of continued portfolio growth, and strong demand for repair work. The strong repair demand is being driven by the same aging of the installed base that's supporting modernization growth. Within modernization, revenue growth should be driven by execution of our robust year-end backlog and continued aging of the installed base. Together, we expect a one- to two-point improvement in our service organic growth rate over the 5% service organic growth rate achieved in 2025. New equipment organic sales are expected to be down low single digits to flat. We finished 2025 with a strong backlog that excluding China was up 9%. And in 2026, we should see growth in all regions excluding China with notable strength in Asia Pacific and with Americas returning to growth. The backlog in China remained down significantly as of year end, which will weigh on sales, particularly in the early part of the year. As a reminder, backlog conversion in China is typically around nine months. Therefore, a faster market recovery may positively impact our sales prospects due to the book and ship volumes. In addition, while new equipment sales in China are expected to decline this year, we have seen a significant improvement in China new equipment orders in the second half of 2025, an encouraging trend. On an actual currency basis, we expect total net sales of $15 to $15.3 billion. With this accelerated organic sales growth, we expect adjusted EPS to grow mid to high single digits for the full year. I'll now pass it back to Christina to review the 2026 outlook in more detail.