Trane Technologies plc

Good morning. Welcome to the Train Technologies Q3 2024 earnings conference call. My name is Julianne and I will be your operator for the call. The call will begin in a few moments with the speaker remarks in the Q&A session. At this time, all participants are in a listen only mode. After the speaker's remarks, we will have a question and answer session. To ask a question, please press star followed by one on your telephone keypad. In the interest of time, we ask that you please limit yourself to one question and one follow up. Thank you. I'll now turn the call over to Zach Nagel, Vice President of Investor Relations.

Thanks, Operator. Good morning, and thank you for joining us for Training Technologies' third quarter 2024 earnings conference call. This call is being webcast on our website at trainingtechnologies.com, where you'll find the accompanying presentation. We're also recording and archiving this call on our website. Please go to slide two. Statements made in today's call that are not historical facts are considered forward-looking statements and are made pursuant to the safe harbor provisions of federal securities law. Please see our SEC filings for a description of some of the factors that may cause our actual results to differ materially from anticipated results. This presentation also includes non-GAAP measures, which are explained in the financial tables attached to our news release. Joining me on today's call are Dave Regneri, Chair and CEO, and Chris Kuhn, Executive Vice President and CFO. With that, I'll turn the call over to Dave.

Dave? Thanks, Zach, and everyone for joining today's call. Please turn to slide number three. I'd like to begin with a few minutes on our purpose-driven strategy, which enables our differentiated financial results over time. Climate change is occurring much faster than anticipated. affecting people and communities around the world. As we saw here in North Carolina just a few weeks ago, urgent and transformative action is needed to reduce emissions and limit global warming. That's where Trane Technologies comes in. Through our innovation, we are helping our customers reduce energy and emissions. When you consider that in a typical building, approximately 30% of the energy after the meter is wasted, it's a massive opportunity. And for our customers, it's green for green, good for the planet, and good for the bottom line. With our relentless innovation, consistent execution, and uplifting culture, we are positioned to deliver a leading growth profile and differentiated financial results over the long term and build a more sustainable future. Please turn to slide number four. We delivered strong performance in the third quarter. extending our track record of leading revenue and EPS growth among industrials. Our global team delivered 11% organic revenue growth, adjusted EBITDA margin expansion of 120 basis points, and adjusted EPS growth of 21%. Enterprise organic bookings were very strong at 5.2 billion, the second highest quarter in the company's history. up 5% in the quarter and up 13% on a two-year stack. To put this into perspective, bookings were only about 120 million or 2% below our highest bookings quarter in Q2 of this year. Organic bookings in America's commercial HVAC this quarter were also the second highest in company's history, up low single digits and up mid-teens on a two-year stack. Q3 bookings were only $100 million below the highest bookings quarter in Q1 of 2024. Net absolute bookings remain very strong. Given the tremendous growth we've seen over the past four years and the variation in order timing, comps will likely continue to be somewhat lumpy. While absolute bookings are expected to remain very strong, backlog also remains very strong at $7.2 billion up from $6.9 billion at year-end 2023, and we expect to exit 2024 with highly elevated backlog. We encourage investors to look at absolute bookings, revenues, and backlog, along with growth rates, in order to gain a clear picture of our strength. Robust performance continues to be led by America's commercial HVAC business, where revenue growth has been exceptionally strong and consistent. Revenues for each of the first three quarters of 2024 are up 50% plus on a three-year stack, inclusive of both equipment and services. And we expect the fourth quarter revenue to be up 50% on a three-year stack as well. We are building a strong track record of market outperformance, particularly as increasing project complexity plays to our unique strengths in innovation and direct sales and service. Case in point, Organic bookings and revenue for our applied solutions in the Americas are both up well over 100% over the past four years. Our installed base is expanding rapidly, adding an estimated 8 to 10 multiple of higher margin services revenue over the life of the equipment. Our strong performance throughout 2024 has enabled us to accelerate incremental investments while delivering full-year leverage above our long-term framework of 25% plus. We've stepped up the pace of investments in the second half of 2024, further strengthening our position for 2025 and beyond. Given our strong performance and positive outlook, we are raising our full-year organic revenue and adjusted EPS guidance. Chris will cover our guidance update in more detail later in the presentation. Please go to slide number five. In our America segment, Commercial HVAC has delivered exceptional bookings and revenues throughout the year, as I've highlighted on the prior slide, with broad-based strength across vertical markets. Revenue was very strong, up nearly 20% in the quarter, with equipment and services up nearly 25% and mid-teens, respectively. In residential, the team delivered very strong results. with bookings up high 20s and revenues up low teens. Turning to transport, the business performed as expected. Bookings were strong, up high 20s. Revenues were down high single digits, consistent with our guide. In EMEA, commercial HVAC strength continues to be driven by demand for our innovation, with bookings up mid-single digits in the quarter and up high teens on a two-year stack. Revenue was also strong, up low teens. Our transport business performed in line with our expectations, with bookings up mid-teens and revenues flat. Turning to Asia, results were mixed between China and the rest of Asia. Starting with the rest of Asia, bookings and revenues were solid, up low single digits and up mid-single digits respectively. China had a challenging quarter. which I'll discuss in more detail on slide eight. Now, I'd like to turn the call over to Chris. Chris?