Total Revenue

-15%

Total revenue fell to $5,676M in Q2 2025 from $6,699M in Q2 2024, largely because the dramatic decline in Global Products (-53% YoY) more than offset modest gains in other segments. This reversal contrasts with previous periods where organic growth in some segments had helped maintain revenue levels. " " " "

Building Solutions North America

+6%

Revenue increased to $2,916M driven by sustained organic growth—underpinned by strong demand in Applied HVAC & Controls and incremental benefits such as pricing adjustments and acquisitions—which builds on the strength observed in earlier periods. " " "

Building Solutions EMEA/LA

+2%

A modest increase to $1,085M was achieved through steady organic sales and modest foreign currency benefits, reflecting a continued but subdued performance consistent with previous trends in the region. " " "

Building Solutions Asia Pacific

+10%

Revenue rose to $542M thanks to a 10% boost, primarily from robust service revenue growth and stabilization in macroeconomic conditions in key markets like China—a noted improvement from prior period challenges, albeit partially offset by foreign currency impacts. " " "

Global Products

-53%

Sales plunged to $1,133M from $2,405M, a dramatic reversal compared to earlier periods when strong organic sales growth, order acceleration, and price increases had boosted performance. This decline likely reflects a mix of order timing shifts, divestitures, or operational adjustments that overturned prior gains. " " " "

Data Center Market Growth & Differentiation

Consistently highlighted in Q1 2025 ( " " " ) and Q4 2024 ( " " " ), with Q3 2024 emphasizing pipeline strength and technological differentiation ( " " ).

Emphasized in Q2 2025 with strong market growth, geographical expansion and clear technological differentiation via the high‐performance York Chiller platform ( " " ).

Consistently strong and positive outlook with recurring emphasis on growth drivers and strategic differentiation, supporting a bullish long‐term view.

Free Cash Flow Optimization & Capital Discipline

Detailed discussion in Q1 2025 ( " " " ), Q4 2024 ( " " " ) and Q3 2024 ( " " " ) focused on improvement in conversion and capital returns.

In Q2 2025, the company raised free cash flow conversion guidance to nearly 100% and reiterated its commitment to returning 100% of free cash flow to shareholders ( " " " ).

Steady, consistent focus with continuing improvements and disciplined capital management; a key theme for operational strength and long‐term stability.

Tariff Impact & Foreign Exchange Uncertainty

In Q1 2025, tariffs and FX uncertainty were discussed with strategic manufacturing and contractual mitigations ( " " " " ). Q1 details also included margin pressure from currency effects.

Q2 2025 focused on tariffs—with mitigation strategies such as local sourcing and pricing adjustments ( " " " ); FX uncertainty was not specifically mentioned.

Evolving discussion: while tariffs remain a concern with proactive mitigation, FX issues are less emphasized in the current quarter, suggesting a narrowed focus on immediate geopolitical impacts.

Operational Efficiency & Lean Transformation

Q1 2025 covered operational excellence and lean initiatives ( " " " " " ). Q4 2024 detailed single end-to-end models and restructuring for productivity ( " " " " ). Q3 2024 indirectly referenced improved productivity and simplification ( " " " ).

Q2 2025 reaffirmed focus with detailed segmentation on margin expansion, LEAN implementation steps and field/process improvements ( " " " " ).

Strong and consistent emphasis: The company is advancing its lean transformation and operational efficiency initiatives, reinforcing its capacity to improve margins and productivity over time.

Leadership Transition & Strategic Review

Q1 2025 featured a comprehensive CEO transition announcement and discussion on portfolio simplification ( " " " ); Q4 2024 and Q3 2024 further discussed succession planning and board refreshment ( " " " ); these discussions show deep strategic reviews ( " " ).

Q2 2025 sees the new CEO actively engaging in an in‐depth review of the company’s strategy while recognizing past leadership efforts ( " " " " ).

Ongoing and steady transformation: Leadership transition and strategic review are consistently addressed, signaling a careful, long‐term strategic repositioning for enhanced shareholder value.

Capacity Constraints & Expansion Challenges

Q1 2025 discussed regional constraints with North America and EMEA/LA being near capacity and Asia-Pacific offering more room ( " ). Q3 2024 mentioned capacity expansion investments in data centers ( " " ).

Q2 2025 did not explicitly mention capacity constraints or expansion challenges.

Mixed visibility: While earlier periods stressed regional capacity challenges, the current quarter did not emphasize this topic, though underlying regional differences remain a risk factor.

Asia-Pacific Market Dynamics

Q1 2025 reported a rebound with strong order growth and substantial unused capacity ( " " ); Q3 2024 showed challenges in China with declining sales but some service growth ( " " ); Q4 2024 highlighted rebounding orders and margin expansions ( " " ).

Q2 2025 reported robust organic sales growth (13%) and strong service order growth (20%), while investing in data center capabilities in Asia-Pacific ( " " ).

Persistently important and evolving: The region is a recurring focus with positive signs of stabilization and growth, although prior challenges in systems remain a backdrop for potential future expansion.

Effective Tax Rate Increases due to Global Reforms

Discussed in Q4 2024 where the effective tax rate was expected to increase from 11% to 12% in fiscal 2025 and further pressure anticipated for 2026 ( " ).

Not mentioned in Q2 2025.

No longer emphasized: Present in previous commentary in Q4 2024 but absent in Q2, possibly indicating either resolution of concerns or lower immediate focus on tax headwinds.

Structural Headwinds: Restructuring Costs, Divestiture Impacts & IT/Cybersecurity Investments

Q1 2025 outlined restructuring costs and divestiture impacts including $250 million headwinds and past cyber incident effects ( " " " " ); Q4 2024 provided detailed discussion on $400 million restructuring costs, divestitures and IT/cybersecurity spend ( " " " " ); Q3 2024 also mentioned stranded costs and ongoing IT investments ( " " " ).

Q2 2025 did not cover these structural headwinds.

Persistent concerns with some variation: Though extensively discussed in previous periods, their omission in Q2 might suggest temporary focus shift; nonetheless, they remain critical for future performance.

Underperformance in Fire & Security Segment

Q1 2025 indicated mid-single-digit growth with strategic pivots ( " ); Q3 2024 noted low single-digit sales declines with market softness (and an expectation for recovery) ( " " ); Q4 2024 mentioned declines in Global Products; these point to mixed performance over time.

Q2 2025 saw the new CEO acknowledge underperformance and an ongoing evaluation of growth potential within the segment ( " ).

Mixed sentiment: While consistently a concern, there is an ongoing re-evaluation to understand realistic growth and profitability expectations, highlighting cautious optimization efforts.

Enhanced Service Attach Rates & Recurring Revenue Models

Q1 2025 presented detailed attach rate figures and long-term targets ( " ); Q3 2024 focused on digitally enabled service models and recurring contracts ( " " " ); Q4 2024 reinforced strong service attach rates in data centers and backlog growth ( " " " ).

Q2 2025 emphasized opportunities to further increase attach rates using a large field workforce and digital tools, with recurring revenue viewed as a key strength ( " " " " ).

Highly positive and consistently improving: Recurring revenue and service attach rates remain a bright spot, with initiatives poised to significantly enhance overall business stability and margin resilience.

Expansion into New Energy, Healthcare & Other Vertical Markets

Q1 2025 highlighted strategic expansion into healthcare, pharmaceutical manufacturing, data centers, and energy with comprehensive technology solutions ( " " " " ); Q4 2024 mentioned new energy manufacturing and a strong pickup in healthcare along with other vertical rebalancing ( " ).

Q2 2025 did not address this topic, and Q3 2024 had no specific commentary on these verticals.

Reduced emphasis recently: While previously an area of expansion, its absence in the current period suggests a temporary shift of focus or a strategic decision to consolidate existing markets before further expansion.