CARRIER GLOBAL Corp Q1 FY2026 earnings call

• Product differentiation is key, with examples like new highly efficient fan coil in CSA RLC, expansion of TAM in hydronics, Gen 1 units launch in Carrier energy, resi digital ecosystem development, and new offerings in light commercial. • CHVAC has seen significant growth in orders, share gains, and backlogs, with comprehensive product portfolio. • Aftermarket playbook focuses on designing for aftermarket, expanding parts capture, and leveraging AI and digital connectivity, aiming for sixth year of double-digit growth

CSA: Organic sales down 3%, residential sales down 12% (driven by 8% decline in unit volume from distributors to dealers and 35% year-over-year drop in field inventories), light commercial up 9%, commercial up low single digits; CSE: Flat organic sales, driven by low single-digit growth in residential light commercial, offset by mid-single digit decline in commercial, shift toward electrification and heat pump adoption; CSAME: Strong performance in commercial outside China region (sales up high teens), but ongoing weakness in China residential and light commercial, sales in Middle East down mid single digits; CST: Third consecutive quarter of solid organic growth, container business up nearly 40%, decline in segment operating margin due to unfavorable business mix

• Reaffirm full year sales outlook of approximately $22 billion with organic growth of flat to low single digits. • Q2 revenues expected to be just below $6 billion, including ~$100 million more revenue from Riello and about two points of incremental pricing. • Expect operating margin of about 17%, 24% tax rate, and about 80 cents of adjusted EPS. • Reaffirm full year outlook for operating profit and adjusted EPS, with no change in CSA and CSE expected margins, CSAME margins to decline ~50 basis points offset by CST margin expansion ~50 basis points

• Litigation against Resi HVAC manufacturers, considered meritless but will be defended vigorously. • Uncertainty around trade tariffs, including Section 232 tariffs which impact input costs and pricing strategies

Q: Unpacking the guide, price volume trade off and margin impact of inflation.

A: Original revenue guide was $22B, added 2% price still rounds to $22B with low single digits organic growth. 2% price to offset input costs, 75% related to tariffs, balance other input costs. At total company level, about 30 basis point headwind to margins for full year Q: Elaborate on movement in Resi and early season unfolding.

A: Macro has challenging side with high fuel prices, but pent up demand in housing and HVAC replacements. 1Q movement better than thought, April started better, field inventory levels healthy but cautious in managing Q: Unpack 2Q guide, segment margins.

A: 2Q expects flattish to down low single-digit organic sales, Americas mid-single digits down, Europe low single digits positive, Asia transportation low single digits positive. Total company operating margin about 17%, Americas mid-20s, Europe closer to 10%, Asia closer to 12%, transport mid teens Q: Price and cost phasing, CSA margin progression.

A: 2% price effective April 6th, more in Q3/Q4 than Q2. CSA margins expected to improve sequentially, Q2 ~24%, Q3 mid-20s, Q4 high teens, full year around 21% Q: China market bottom and data center orders.

A: Hard to call bottom on housing, but CHVAC has encouraging parts like data centers, EV battery areas. Data center orders backlog covers $1.5B sales this year, still have capacity for additional orders, back-end loaded with ramp in second half Q: Pricing with customers, data center CDU trajectory.

A: Had tough discussions with customers, but extended channel understands input cost increases. CDU offering has launched 1MW, 3MW in Q3, 5MW end of year/early next year, Zutacor partnership strategic, quantum leap sales ~$300-400M Q: CSE heat pumps, margins and promotions.

A: Heat pump demand up in Europe, especially Germany, but margins impacted by one-time promotions. Took price increases and surcharges effective April 1st, introducing new Wiesmann-branded heat pump in fall, expecting margins to improve with cost actions Q: CSA commercial share gains, Q2 outlook.

A: CSA commercial up 9% in 1Q, strength in retail national accounts, new products doing well, field inventory levels healthy. Q2 expected down mid single digit range, macro uncertainty keeps full-year guide low single digits down Q: Services growth, litigation on Resi HVAC.

A: Services growth confident in double-digit, sixth year in a row. Litigation against Resi HVAC manufacturers is meritless and will be defended vigorously Q: Zutacor and two-phase cooling, Class 8 truck recovery.

A: Two-phase cooling transition not overnight, range of next few years. Class 8 truck recovery has positive indicators but fuel prices may push decisions right, container business better, NATT flattish Q: America's Resi HVAC demand distinction, pricing lock and margins.

A: Try to understand true demand and field inventory, price increase effective April 27th, movement better than thought possibly due to beating price. Margins in Q1 met mid-teens target, not related to cost pressure as adjusted for FX headwind and data center investments Q: Tariffs, exemptions, timeline, 10% tariff path.

A: Don't know timeline for 232 tariffs change, appreciate administration's willingness to listen, but uncertain whether, when, or if change will occur, have to assume no change for now