OTIS · Otis Worldwide Corporation

Otis Worldwide Corporation delivered Q1 2026 results with net sales of $3.6 billion, up 6% reported and 1% organically, primarily propelled by robust Service segment performance where sales rose 11% to $2.4 billion, led by 16% repair growth. All Service lines expanded, though margins contracted 160 basis points to 23.0% due to higher labor and material costs, investments in growth, and unfavorable mix, more than offsetting volume and pricing gains. New Equipment sales declined 1% to $1.1 billion, hampered by over 20% drop in China and mid-single digit declines in Asia Pacific and Americas, with margins shrinking 240 basis points to 3.3% from lower volume, unfavorable pricing, and mix despite productivity improvements. GAAP operating profit rose to $539 million with margin expansion to 15.1%, aided by prior-year non-recurring items absence, while adjusted figures showed contraction reflecting operational pressures including tariffs, Service investments, and Middle East shipment delays. CEO Judy Marks highlighted strengthened orders—modernization up 11% with 32% backlog growth, New Equipment up 1% with 6% backlog—and confidence in momentum from backlog, pricing, and execution. Cash generation strengthened markedly with $413 million operating cash flow and $272 million adjusted free cash flow, enabling $400 million share repurchases alongside a majority investment in AI-enabled elevator service provider WeMaintain. The company revised full-year 2026 outlook to net sales of $15.1-15.3 billion, adjusted operating profit around $2.5 billion, adjusted EPS $4.20-4.24, and adjusted free cash flow $1.60-1.65 billion, signaling disciplined capital allocation amid near-term headwinds.