Trane Technologies plc TT reported fourth-quarter revenue growth of 10% year-over-year to $4.87 billion.

The company surpassed the consensus of $4.79 billion.

Bookings increased 3% Y/Y to $4.67 billion in the quarter. Enterprise reported a 10% Y/Y increase in both revenues and organic revenues.

The backlog totaled $6.75 billion at the end of 2024. Adjusted EBITDA rose 17% Y/Y to $894 million, with a margin expansion of 110 bps Y/Y to 18.3%.

Adjusted EPS of $2.61 (+20% Y/Y) surpassed the street view of $2.54.

As of Dec. 31, 2024:

• Operating cash flow from continuing operating activities reached $3.178 billion
• Free cash flow amounted to $2.8 billion.
• Cash and equivalents stood at $1.59 billion.
• In 2024, the Swords, Ireland-based company deployed or committed $2.5 billion in capital.
• The deployment includes $760 million for dividends and $1.3 billion for share repurchases.

Trane Technologies plans to deploy 100% of excess cash to shareholders over time.

2025 Outlook: Trane Technologies expects an FY25 organic revenue growth outlook of 7%-8% and adjusted EPS of $12.70-$12.90 (vs. street view of $12.69).

Dave Regnery, chair and CEO of Trane Technologies said, “We achieved record financial results with strong organic revenue growth of 12%, powerful free cash flow conversion of 109% and adjusted earnings per share growth of 24% – our fourth consecutive year of earnings per share growth of 20% or more.”

”Since launching Trane Technologies in 2020, we have delivered a compound annual revenue growth rate of 12%, realized free cash flow conversion of 108% of adjusted net earnings, expanded EBITDA margins by 400 basis points and deployed approximately $12 billion of capital.”

Investors can gain exposure to the stock via Invesco Building & Construction ETF PKB and TCW Transform Supply Chain ETF SUPP.

Price Action: Trane Technologies shares are down 0.49% at $362.22 premarket at the last check Thursday.

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