Trane Technologies Reports Strong First Quarter Results; Reaffirms Guidance Range and Expects to Perform Towards High-End

Highlights (first-quarter 2025 versus first-quarter 2024, unless otherwise noted):

• Strong enterprise bookings of $5.3 billion with a book-to-bill of 113 percent
• Reported revenues of $4.7 billion, up 11 percent; organic revenues* up 11 percent
• GAAP continuing EPS of $2.71; adjusted continuing EPS* of $2.45, up 26 percent
• Enterprise backlog of $7.3 billion, up approximately $500 million versus year-end 2024

*This news release contains non-GAAP financial measures. Definitions of the non-GAAP financial measures can be found in the footnotes of this news release. See attached tables for additional details and reconciliations.

Trane Technologies plc (NYSE:TT), a global climate innovator, today reported diluted earnings per share (EPS) from continuing operations of $2.71 for the first quarter of 2025. Adjusted continuing EPS was $2.45, up 26 percent.

First-Quarter 2025 Results

Financial Comparisons - First-Quarter Continuing Operations

“In the first quarter, our global team delivered outstanding performance through our purpose-driven strategy, extending our consistent track record of results,” said Dave Regnery, chair and CEO of Trane Technologies. “With strong execution through our proven business operating system, we continue to navigate a dynamic macro environment. Demand for our innovative solutions remains robust, with customers selecting Trane Technologies as their partner of choice.

Our strong order growth in the first quarter included another all-time high in bookings for our Americas commercial HVAC business, further elevating our backlog. With our leading innovation, elevated backlog and strong financial position, we are confident in our full-year guidance and expect to perform towards the high-end of the range. We are well positioned to deliver differentiated shareholder value over the long term.”

Highlights from the First Quarter of 2025 (all comparisons against first-quarter 2024 unless otherwise noted)

• Delivered strong revenue, operating income, EBITDA and EPS growth.
• Strong bookings of $5.3 billion, up 4 percent. Book-to-bill of 113 percent.
• Enterprise reported revenues and organic revenues were both up 11 percent.
• GAAP operating margin was up 250 basis points, adjusted operating margin was up 100 basis points and adjusted EBITDA margin was up 130 basis points.
• Strong volume growth, positive price realization and productivity more than offset inflation. The Company also continued high levels of business reinvestment.

First-Quarter Business Review (all comparisons against first-quarter 2024 unless otherwise noted)

Americas Segment: innovates for customers in the North America and Latin America regions. The Americas segment encompasses commercial heating, cooling and ventilation systems, building controls and solutions, energy services and solutions, residential heating and cooling; and transport refrigeration systems and solutions.

• Strong bookings of $4.2 billion, up 5 percent. Book-to-bill of 111 percent.
• Bookings strength led by Americas Commercial HVAC, with a book-to-bill of 115 percent, adding approximately $400 million of backlog versus year-end 2024.
• Reported revenues were up 14 percent, including approximately 1 percentage point related to acquisitions. Organic revenues were up 13 percent.
• GAAP operating margin was up 310 basis points, adjusted operating margin was up 140 basis points and adjusted EBITDA margin was up 170 basis points.
• Strong volume growth, positive price realization and productivity more than offset inflation. The Company also continued high levels of business reinvestment.

Europe, Middle East and Africa (EMEA) Segment: innovates for customers in the Europe, Middle East and Africa region. The EMEA segment encompasses heating, cooling and ventilation systems, services and solutions for commercial buildings and transport refrigeration systems and solutions.

• Strong bookings up 9 percent; organic bookings up 13 percent.
• Bookings strength led by Commercial HVAC, with a book-to-bill of 130 percent.
• Reported revenues were up 4 percent including approximately 3 percentage points of negative foreign exchange impact offset by 1 percentage point related to acquisitions. Organic revenues were up 6 percent.
• GAAP operating margin was down 260 basis points; adjusted operating margin was down 280 basis points and adjusted EBITDA margin was down 190 basis points.
• Continued high levels of business reinvestment and inflation offset strong volume growth and productivity.

Asia Pacific Segment: innovates for customers throughout the Asia Pacific region. The Asia Pacific segment encompasses heating, cooling and ventilation systems, services and solutions for commercial buildings and transport refrigeration systems and solutions.

• Bookings were down 14 percent. Organic bookings were down 13 percent. Book-to-bill of 108 percent.
• Reported revenues were down 4 percent including approximately 1 percentage point of negative foreign exchange impact. Organic revenues were down 3 percent.
• GAAP operating margin was up 90 basis points, adjusted operating margin was up 90 basis points and adjusted EBITDA margin was up 90 basis points.
• Productivity more than offset lower volumes and inflation.

Balance Sheet and Cash Flow

• Through March 31, 2025, cash flow from continuing operating activities was $346 million and free cash flow was $230 million.
• Year-to-date through April, the Company deployed or committed approximately $1.1 billion of capital including approximately $210 million for dividends, approximately $275 million for M&A and approximately $650 million for share repurchases.
• The Company expects to pay a competitive and growing dividend and to deploy 100 percent of excess cash to shareholders over time.

Full-Year 2025 Guidance

• The Company expects full-year 2025 reported revenue growth of approximately 7.5 percent to 8.5 percent, including 100 basis points related to acquisitions offset by 50 basis points of negative foreign exchange impact, and organic revenue growth of approximately 7 percent to 8 percent versus full-year 2024.
• The Company expects GAAP continuing EPS for full-year 2025 of approximately $12.95 to $13.15, including $0.25 for non-GAAP adjustments. The Company expects adjusted continuing EPS for full-year 2025 of $12.70 to $12.90.
• The Company expects to perform towards the high-end of revenue and EPS guidance.
• Additional information regarding the Company's 2025 guidance is included in the Company's first-quarter earnings presentation found at www.tranetechnologies.com in the Investor Relations section.

This news release includes “forward-looking" statements within the meaning of securities laws, which are statements that are not historical facts, including statements that relate to our future financial performance and targets, including revenue, EPS, and earnings; our business operations; demand for our products and services, including bookings and backlog; capital deployment, including the amount and timing of our dividends, our share repurchase program, anticipated capital commitments for M&A activity, and our capital allocation strategy; our available liquidity; our anticipated revenue growth, and the performance of the markets in which we operate.

These forward-looking statements are based on our current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from our current expectations. Such factors include, but are not limited to, global economic conditions, including recessions and economic downturns, inflation, volatility in interest rates and foreign exchange; trade protection measures such as import or export restrictions, tariffs, or quotas; changing energy prices; worldwide geopolitical conflict; financial institution disruptions; climate change and our sustainability strategies and goals; future health care emergencies on our business, our suppliers and our customers; commodity shortages; price increases; government regulation; restructurings activity and cost savings associated with such activity; secular trends toward decarbonization, energy efficiency and internal air quality, the outcome of any litigation, including the risks and uncertainties associated with the Chapter 11 proceedings for our deconsolidated subsidiaries Aldrich Pump LLC and Murray Boiler LLC; cybersecurity risks; and tax audits and tax law changes and interpretations. Additional factors that could cause such differences can be found in our Form 10-K for the year ended December 31, 2024, as well as our subsequent reports on Form 10-Q and other SEC filings. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events and how they may affect the Company. We assume no obligation to update these forward-looking statements.

This news release also includes non-GAAP financial information, which should be considered supplemental to, not a substitute for, or superior to, the financial measure calculated in accordance with GAAP. The definitions of our non-GAAP financial information and reconciliation to GAAP are attached to this news release.

All amounts reported within the earnings release above related to net earnings (loss), earnings (loss) from continuing operations, earnings (loss) from discontinued operations, adjusted EBITDA and per share amounts are attributed to Trane Technologies' ordinary shareholders.

Trane Technologies (NYSE:TT) is a global climate innovator. Through our strategic brands Trane^® and Thermo King^®, and our portfolio of environmentally responsible products and services, we bring efficient and sustainable climate solutions to buildings, homes and transportation. For more information, visit tranetechnologies.com.

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4/30/2025

(See Accompanying Tables)

• Table 1: Condensed Consolidated Income Statement
• Tables 2 - 5: Reconciliation of GAAP to Non-GAAP
• Table 6: Condensed Consolidated Balance Sheets
• Table 7: Condensed Consolidated Statement of Cash Flows
• Table 8: Balance Sheet Metrics and Free Cash Flow

*Q1 Non-GAAP measures definitions

Adjusted operating income in 2025 is defined as GAAP operating income adjusted for merger and acquisition transaction costs and a non-cash adjustment for contingent consideration. Adjusted operating income in 2024 is defined as GAAP operating income adjusted for restructuring costs and legacy legal liability. Please refer to the reconciliation of GAAP to non-GAAP measures on tables 2, 3 and 4 of the news release.

Adjusted operating margin is defined as the ratio of adjusted operating income divided by net revenues.

Adjusted earnings from continuing operations attributable to Trane Technologies plc (Adjusted net earnings) in 2025 is defined as GAAP earnings from continuing operations attributable to Trane Technologies plc adjusted for net of tax impacts of merger and acquisition transaction costs and a non-cash adjustment for contingent consideration. Adjusted net earnings in 2024 is defined as GAAP earnings from continuing operations attributable to Trane Technologies plc adjusted for net of tax impacts of restructuring costs and legacy legal liability. Please refer to the reconciliation of GAAP to non-GAAP measures on tables 2 and 3 of the news release.

Adjusted continuing EPS in 2025 is defined as GAAP continuing operations attributable to Trane Technologies plc adjusted for net of tax impacts of merger and acquisition transaction costs and a non-cash adjustment for contingent consideration. Adjusted continuing EPS in 2024 is defined as GAAP continuing operations attributable to Trane Technologies plc adjusted for net of tax impacts of restructuring costs and legacy legal liability. Please refer to the reconciliation of GAAP to non-GAAP measures on tables 2 and 3 of the news release.

Adjusted EBITDA in 2025 is defined as adjusted operating income adjusted to exclude depreciation and amortization expense and include other income / (expense), net. Adjusted EBITDA in 2024 is defined as adjusted operating income adjusted to exclude depreciation and amortization expense and include other income / (expense), net. Other income / (expense), net mainly comprises interest income, foreign currency exchange gains and losses and certain components pension and postretirement benefit costs. Please refer to the reconciliation of GAAP to non-GAAP measures on tables 4 and 5 of the news release.

Adjusted EBITDA margin is defined as the ratio of adjusted EBITDA divided by net revenues.

Adjusted effective tax rate for 2025 is defined as the ratio of income tax expense adjusted for the net tax effect of adjustments for merger and acquisition transaction costs divided by adjusted net earnings. Adjusted effective tax rate for 2024 is defined as the ratio of income tax expense adjusted for the net tax effect of adjustments for restructuring costs and legacy legal liability divided by adjusted net earnings. This measure allows for a direct comparison of the effective tax rate between periods.

Free cash flow in 2025 is defined as net cash provided by (used in) continuing operating activities adjusted for capital expenditures, cash payments for restructuring costs, legacy legal liability, and merger and acquisition transaction costs. Free cash flow in 2024 is defined as net cash provided by (used in) continuing operating activities adjusted for capital expenditures, cash payments for restructuring costs, legacy legal liability, and merger and acquisition transaction costs. Please refer to the free cash flow reconciliation on table 8 of the news release.

Operating leverage is defined as the ratio of the change in adjusted operating income for the current period (e.g. Q1 2025) less the prior period (e.g. Q1 2024), divided by the change in net revenues for the current period less the prior period.

Organic revenue is defined as GAAP net revenues adjusted for the impact of currency and acquisitions.

Organic bookings is defined as reported orders in the current period adjusted for the impact of currency and acquisitions.

Working capital measures a firm’s operating liquidity position and its overall effectiveness in managing the enterprise's current accounts.

• Working capital is calculated by adding net accounts and notes receivables and inventories and subtracting total current liabilities that exclude short-term debt, dividend payable and income tax payables.
• Working capital as a percent of revenue is calculated by dividing the working capital balance (e.g. as of March 31) by the annualized revenue for the period (e.g. reported revenues for the three months ended March 31 multiplied by 4 to annualize for a full year).

The Company reports its financial results in accordance with generally accepted accounting principles in the United States (GAAP). The following schedules provide non-GAAP financial information and a quantitative reconciliation of the difference between the non-GAAP financial measures and the financial measures calculated and reported in accordance with GAAP.

The non-GAAP financial measures should be considered supplemental to, not a substitute for or superior to, financial measures calculated in accordance with GAAP. They have limitations in that they do not reflect all of the costs associated with the operations of our businesses as determined in accordance with GAAP. In addition, these measures may not be comparable to non-GAAP financial measures reported by other companies.

We believe the non-GAAP financial information provides important supplemental information to both management and investors regarding financial and business trends used in assessing our financial condition and results of operations.

Non-GAAP financial measures assist investors with analyzing our business results as well as with predicting future performance. In addition, these non-GAAP financial measures are also reviewed by management in order to evaluate the financial performance of each segment. Presentation of these non-GAAP financial measures helps investors and management to assess the operating performance of the Company.

As a result, one should not consider these measures in isolation or as a substitute for our results reported under GAAP. We compensate for these limitations by analyzing results on a GAAP basis as well as a non-GAAP basis, prominently disclosing GAAP results and providing reconciliations from GAAP results to non-GAAP results.

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