On July 31, 2024, Trane Technologies PLC (TT, Financial) released its 8-K filing for the second quarter of 2024, showcasing robust financial performance and an upward revision of its full-year guidance. Trane Technologies, a global leader in climate solutions, manufactures and services commercial and residential HVAC systems and transportation refrigeration solutions under its prominent Trane, American Standard, and Thermo King brands. The $18 billion company generates approximately 70% of sales from equipment and 30% from parts and services, with North America accounting for over 70% of its revenue.
Q2 2024 Financial Highlights
Trane Technologies reported revenues of $5.3 billion for Q2 2024, marking a 13% increase compared to the same period last year. The company's GAAP operating margin improved by 70 basis points to 19.5%, while the adjusted operating margin rose by 140 basis points to 19.4%. Adjusted EBITDA margin also saw a 140 basis point increase, reaching 21.1%.
| Metric | Q2 2024 | Q2 2023 | Y-O-Y Change |
|---|---|---|---|
| Bookings | $5,340 million | $4,495 million | 19% |
| Net Revenues | $5,307 million | $4,705 million | 13% |
| GAAP Operating Income | $1,034 million | $885 million | 17% |
| GAAP Operating Margin | 19.5% | 18.8% | 70 bps |
| Adjusted Operating Income | $1,027 million | $849 million | 21% |
| Adjusted Operating Margin | 19.4% | 18.0% | 140 bps |
| Adjusted EBITDA | $1,119 million | $927 million | 21% |
| Adjusted EBITDA Margin | 21.1% | 19.7% | 140 bps |
| GAAP Continuing EPS | $3.33 | $2.57 | 30% |
| Adjusted Continuing EPS | $3.30 | $2.68 | 23% |
Segment Performance
The Americas segment led the charge with a 23% increase in bookings and a 16% rise in net revenues. The segment's GAAP operating margin improved by 10 basis points to 21.3%, while the adjusted operating margin increased by 130 basis points to 21.1%. The EMEA segment also showed strong performance with a 10% increase in bookings and a 4% rise in net revenues. The GAAP operating margin for EMEA improved by 230 basis points to 18.7%, and the adjusted operating margin increased by 130 basis points to 18.8%.
| Segment | Q2 2024 Bookings | Q2 2023 Bookings | Y-O-Y Change | Q2 2024 Net Revenues | Q2 2023 Net Revenues | Y-O-Y Change |
|---|---|---|---|---|---|---|
| Americas | $4,221.9 million | $3,422.9 million | 23% | $4,290.9 million | $3,692.5 million | 16% |
| EMEA | $669.4 million | $610.0 million | 10% | $645.3 million | $617.6 million | 4% |
| Asia Pacific | $448.8 million | $461.9 million | (3)% | $371.2 million | $394.6 million | (6)% |
Balance Sheet and Cash Flow
Trane Technologies reported a significant improvement in its cash flow metrics. Cash from continuing operating activities year-to-date was $959 million, up from $548 million in the same period last year. Free cash flow year-to-date was $810 million, compared to $427 million in the previous year. The company's cash balance as of June 30, 2024, was $1,326 million, a substantial increase from $664 million in the prior year.
| Metric | Q2 2024 | Q2 2023 |
|---|
Explore the complete 8-K earnings release (here) from Trane Technologies PLC for further details.
