Q4 2025 Otis Worldwide Corp Earnings Call Transcript
Key Points
- Otis Worldwide Corp (OTIS) achieved record adjusted free cash flow of $817 million in the fourth quarter, reflecting a strong focus on working capital efficiencies and collections.
- The company secured record Modernization orders, building an unprecedented backlog, and experienced a 43% increase in Modernization orders in the fourth quarter.
- Otis Worldwide Corp (OTIS) delivered double-digit adjusted EPS growth in the fourth quarter, up 11%, marking the strongest performance in the last six quarters.
- The Maintenance portfolio grew 4% for the 14th consecutive quarter, reinforcing the company's leading position in the industry.
- The company launched innovative products like the Gen3 product family and Otis ONE IoT solution, enhancing predictive maintenance and real-time health monitoring capabilities.
- New Equipment orders at constant currency declined 2% in the quarter, with a high-teens decline in Asia Pacific due to tough comparisons.
- The New Equipment operating profit margin declined by 110 basis points to 3.6%, driven by lower volumes and unfavorable price and tariff headwinds.
- China's New Equipment market remains challenging, with a mid-single-digit decline in the quarter, impacting overall sales growth.
- The company anticipates continued pressure on New Equipment margins due to ongoing volume declines, particularly in China.
- Otis Worldwide Corp (OTIS) expects a low single-digit decline to flat New Equipment organic sales in 2026, indicating potential challenges in market stabilization.
Good morning, and welcome to Otis' fourth-quarter 2025 earnings conference call. This call is being carried live on the Internet and recorded for replay. Presentation materials are available for download from Otis' website at www.otis.com.
I'll now turn it over to Rob Quartaro, Vice President of Investor Relations. Please go ahead.
Thank you, Krista. Welcome to Otis' fourth-quarter 2025 earnings conference call. On the call with me today are Judy Marks, Chair, CEO, and President; and Cristina Mendez, Executive Vice President and CFO.
Please note, except where otherwise noted, the company will speak to results from continuing operations, excluding restructuring and significant non-recurring items. A reconciliation of these measures can be found in the appendix of the webcast.
We also remind listeners that the presentation contains forward-looking statements, which are subject to risks and
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