Trane Technologies plc

Good morning. Welcome to the Train Technologies Q1 2026 Earnings Conference call. My name is Lisa, and I will be your operator for the call. The call will begin in a few moments with the speaker remarks and the Q&A session. We do ask that you limit your questions to one initial and one follow-up today. At this time, all participants are in a listen-only mode. I will now turn the call over to Zach Nagel, Vice President of Investor Relations. Please go ahead, sir.

Thanks, operator. Good morning, and thank you for joining us for Training Technologies' first quarter, 2026 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 note that statements made today are forward-looking and may differ materially from actual results. As detailed in our SEC filings, This presentation also includes non-GAAP measures explained in our news release and presentation appendix. Joining me today 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'll start with a few thoughts on how our purpose-driven strategy continues to fuel strong performance over time. The dynamic global environment and rising demand for power is pushing customers to think differently about energy. With our leading innovation, Trane Technologies is uniquely positioned to win. Our high efficiency systems and smart controls help customers save energy, lower operating costs, and increase resiliency, proving that sustainability and performance go hand in hand. Our strategy is built on a strong foundation, a robust business operating system, a powerful cash flow engine, and an uplifting, engaging culture. This formula positions us to deliver differentiated long-term value to our people, our customers, our shareholders, and our communities. Please turn to slide number four. Q1 was another strong quarter, marked by exceptional enterprise organic bookings, up 24%, and record backlog of $10.7 billion, up over 30% versus year-end 2025. We delivered organic revenue growth of 3%, led by our America's commercial HVAC business, and double-digit global services growth. This strong performance translated to adjusted EPS growth of 7%. Our commercial HVAC businesses delivered outstanding performance, particularly in the Americas, where our commercial HVAC bookings reached an all-time high, up approximately 40% year-over-year, with applied solutions bookings up over 160%. Our third consecutive quarter of applied bookings growth of greater than 100%. The strength of our commercial HVAC business is further underscored by our combined Americas and EMEA backlog. which is up approximately $2.7 billion over year-end 2025. This includes approximately $1 billion from our acquisition of Stellar Energy, a leader in modular data center cooling solutions. We are exceptionally well positioned for continued growth in 2026 and beyond. Our exceptional bookings and record backlog provide strong visibility to continued market outgrowth and revenue growth acceleration in the second half of the year. Our robust and rapidly growing commercial HVAC pipeline across key verticals, including long-term capacity and master purchase agreements and data centers, bolsters our confidence in the long-term outlook. Our services business, which represents one-third of our enterprise revenue, continues to be a consistent and durable growth driver, boasting a low-teens compound annual growth rate since 2020. We anticipate residential market tailwinds in the second half of 2026, driven by improving market fundamentals and easier prior year comparisons. The Americas transport market also continued improvement in fundamentals, strengthening the outlook for a late 2026 and 2027 recovery. Operational excellence is core to everything we do, and we expect to mitigate tariff and inflationary pressures through our business operating system. Altogether, We are raising our full year revenue and EPS guidance, which Chris will cover shortly. Please turn to slide number five. As discussed in our Americas segment, commercial HVAC continued its standout performance with bookings up approximately 40% and revenues up high single digits. In high growth verticals like data centers, customers expect innovative, highly engineered solutions tailored to their unique needs. This plays directly to our strengths, including leading innovation, system expertise, proven operational excellence, and the capacity to grow with our customers as their needs rapidly expand. These factors and the expertise of our direct sales force enable us to capture a significant share of these opportunities. Turning to residential, bookings were up low single digits while revenues declined mid-single digits. exceeding our expectations entering the quarter in america's transport refrigeration bookings were up double digits and revenues were up low single digits significantly outperforming in markets which saw truck trailer and apu segments down double digits in q1 emea results were solid and consistent with our expectations excluding headwinds from geopolitical events in the region In Asia Pacific, commercial HVAC bookings were up high 20s and revenues grew low single digits in the quarter, led by the rest of Asia, where bookings were up approximately 50% and revenues were up low single digits. Now, I'd like to turn the call over to Chris.