Carrier reported a weak Q4 with organic sales down 9% driven by a severe downturn in residential and light commercial markets, leading to a significant operating margin contraction. Management guided 2026 to be roughly flat in organic growth (1%) as strong commercial and aftermarket growth offsets continued weakness in short-cycle (residential) businesses. The company highlighted strong data center momentum with commercial HVAC orders up 80% in the quarter. Q4 organic sales fell 9% YoY; adjusted operating profit dropped 33% due to severe declination in CSA Residential and Light Commercial, and fixed cost absorption issues with reduced manufacturing output.
Carrier reported a weak Q4 with organic sales down 9% driven by a severe downturn in residential and light commercial markets, leading to a significant operating margin contraction. Management guided 2026 to be roughly flat in organic growth (1%) as strong commercial and aftermarket growth offsets continued weakness in short-cycle (residential) businesses. The company highlighted strong data center momentum with commercial HVAC orders up 80% in the quarter. Q4 organic sales fell 9% YoY; adjusted operating profit dropped 33% due to severe declination in CSA Residential and Light Commercial, and fixed cost absorption issues with reduced manufacturing output.
Carrier reported a weak Q4 with organic sales down 9% driven by a severe downturn in residential and light commercial markets, leading to a significant operating margin contraction. Management guided 2026 to be roughly flat in organic growth (1%) as strong commercial and…
Guidance · revenue to $21.8B
Management acknowledged softer short-cycle markets and guided conservatively for 2026, stressing cost actions and long-term growth drivers like data centers and aftermarket without sounding overly optimistic.
Data center revenue is expected to grow ~50% in 2026 to $1.5B, driven by a 5x surge in Q4 orders.
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Residential market assumed to absorb remaining inventory overhang in 2026. Management acknowledged softer short-cycle markets and guided conservatively for 2026, stressing cost actions and long-term growth drivers like data centers and aftermarket without sounding overly optimistic.
Management acknowledged softer short-cycle markets and guided conservatively for 2026, stressing cost actions and long-term growth drivers like data centers and aftermarket without sounding overly optimistic.
“Total company orders were up 16% for the quarter, with strength driven by commercial HVAC globally, which was up over 45%, and particularly in CSA, where commercial orders increased 80%, reflecting some large data center wins. Applied orde…”
“The Vera Rubin chips will be more efficient and deliver a lot more output, but the input temperature will be about the same. And that power translates directly into heat, so both designs require the same amount of heat dissipation.”
“Free cash flow is expected to be a use of a few hundred million dollars in line with our normal operating cadence.”
“We still have a percentage of Zootercore, which has a two-phase solution. On the CDU side, we decided to produce our own.”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Revenue | FY2026 | $21.6B–$22Binline vs consensus | $21.8B | MAINTAINED |
| Issued | Metric | Target | Guide | Actual | Outcome |
|---|---|---|---|---|---|
| FY2026 Q1 | EPS | FY2026 Q2 | $0.80 | $0.86 | Met / beat |
| FY2026 Q1 | Revenue | FY2026 Q2 | $6B | $6.351B | Met / beat |
The inclusion of Toshiba in Carrier's service coverage indicates ongoing integration and aftermarket revenue opportunities from the acquired business.
“and our global coverage, that is, chillers covered by service agreements, is up to 110,000, including Toshiba.”
… have positioned us to outgrow the commercial HVAC market as reflected in our 2026 outlook with double-digit revenue growth, including data centers up about 50%. Aftermarket also remains a good news story for us, as you can see on slide five. Our playbook works, and we continue to improve upon it. Three years ago, we had 17,000 chillers connected. Today, it is over 70,000. Our attachment rate in CSA grew more than 3x last year and is now close to 60%, and our global coverage, that is, chillers covered by service agreements, is up to 110,000, including Toshiba. We estimate that 70% to 80% of our high-complexity chillers are under service contracts. The area within our aftermarket business where we see the highest growth potential over the next five years is modifications and upgrades. Sales last year were up 20%. With a focused team, investments, and strategy, we see great opportunities in cities globally. In 2026, we are well positioned for double-digit aftermarket growth for our sixth consecutive year. Turning to systems on slide six. Our HEMS offering in the United States is getting tremendous attention from hyperscalers and utilities, and it is not surprising given the …
NVIDIA's upcoming Vera Rubin chip is mentioned to have the same thermal power and input temperature as the current Blackwell chip, implying Carrier's existing chiller solutions are adequate for upcoming GPU generations. — This reduces the risk of a discontinuity in demand for Carrier's cooling products as NVIDIA shifts to next-generation architectures.
“We have been working together on a number of climate optimized reference designs, and thinking very closely about the chilling requirements for their future chip, the Vera Rubin.”