Otis reported solid Q4 with record modernization orders (up 43%) and a record backlog. Service margins expanded 100bps and adjusted EPS grew 11%. Management guided for 2026 total net sales of $15-15.3B, FCF of $1.6-1.7B, and accelerating service growth, with a conservative initial EPS outlook of mid-to-high single digit growth. Record modernization orders in Q4: up 43% YoY, backlog up 30%.
Otis reported solid Q4 with record modernization orders (up 43%) and a record backlog. Service margins expanded 100bps and adjusted EPS grew 11%. Management guided for 2026 total net sales of $15-15.3B, FCF of $1.6-1.7B, and accelerating service growth, with a conservative initial EPS outlook of mid-to-high single digit growth. Record modernization orders in Q4: up 43% YoY, backlog up 30%.
Management expressed confidence in accelerating top-line growth and sustaining margin expansion, backed by record modernization backlog and service portfolio strength, while acknowledging headwinds from China and new equipment.
Guidance · revenue to $15.15B
Modernization orders surged 43% in Q4, backlog up 30%. Management expressed confidence in accelerating top-line growth and sustaining margin expansion, backed by record modernization backlog and service portfolio strength, while acknowledging headwinds from China and new…
New equipment orders declined 2% but backlog ex-China grew 9%.
Management discussed AI-driven innovation initiatives, including the Otis AI Inspection Robot and Otis AI Agent, which enhance safety, diagnostics, and real-time collaboration, alongside AI-assisted predictive maintenance via Otis One IoT connectivity, driving subscription revenue growth.
Modernization orders surged 43% in Q4, backlog up 30%. Management expressed confidence in accelerating top-line growth and sustaining margin expansion, backed by record modernization backlog and service portfolio strength, while acknowledging headwinds from China and new equipment.
Management emphasized investments in service excellence and field professionals, adding approximately 1,000 field professionals in 2025 in anticipation of portfolio growth and repair demand. They also plan approximately $100 million for targeted bolt-on acquisitions to strengthen service portfolio, with a focus on productivity and digital capabilities rather than large capex.
Management expressed confidence in accelerating top-line growth and sustaining margin expansion, backed by record modernization backlog and service portfolio strength, while acknowledging headwinds from China and new equipment.
“We are changing our operating model, as you know, and we are thinking on models that will benefit customer experience by reducing lead time in the delivery of spare parts.”
“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.”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Free cash flow | FY2026 | $1.6B–$1.7B | $1.65B | GUIDED |
| Op margin | FY2026 | $60M–$100M | $80M | GUIDED |
| Revenue | FY2026 | $15B–$15.3B | $15.15B | GUIDED |
| RevenueSERVICE | FY2026 Q1 | 6% | 6% | GUIDED |
| Issued | Metric | Target | Guide | Actual | Outcome |
|---|---|---|---|---|---|
| FY2025 Q3 | EPS | FY2025 | $4.04–$4.08 | $4.05 | Met / beat |