HVAC company Trane (NYSE:TT) reported Q3 2026 results exceeding the market's revenue expectations , with revenue up 17.7% year on year to $6.76 billion. Its non-GAAP profit of $4.86 per share was 2.6% above analysts' consensus estimates.
For more on Trane Technologies, read our full research report .
Trane Technologies (TT) Q3 2026 highlights:
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Revenue$6.76 billion vs S&P analysts' consensus estimates of $6.50 billion (17.7% year-on-year growth, 4% beat)
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Adjusted EPS$4.86 vs S&P analysts' consensus estimates of $4.74 (2.6% beat)
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Adjusted EBITDA$1.45 billion vs analysts' consensus estimates of $1.46 billion (21.4% margin, 1% miss)
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Adjusted EPS guidanceManagement reiterated its full-year adjusted EPS guidance of $15.25 at the midpoint
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Operating margin19.9%, in line with the same quarter last year
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Backlog$12.5 billion at quarter end, up 73.6% year on year
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Market capitalization$98.67 billion
"Our focus on sustainability and energy efficiency continues to resonate with customers, driving bookings growth of 20 percent in the quarter and elevating our backlog to $12.5 billion. We are raising our full-year revenue guidance and reaffirming our earnings-per-share guidance, even as we navigate supply chain and inflationary headwinds. With our strong momentum, leading innovation and talented team, we are well positioned to continue delivering differentiated, long-term shareholder value."
Revenue growth
A company's long-term performance is an indicator of its overall quality. Any business can report a good quarter or two, but many enduring ones grow for years. Trane Technologies's revenue grew at an impressive 11.1% compounded annual growth rate over the last five years. Its growth surpassed that of the average industrials company and shows its offerings resonate with customers.
Long-term growth matters most, but within industrials, a half-decade historical view may miss cycles, industry trends or a company capitalizing on catalysts such as a new contract win or a successful product line. Trane Technologies's annualized revenue growth of 9.5% over the last two years is below its five-year trend, but the results still suggest healthy demand.
This quarter, Trane Technologies reported year-on-year revenue growth of 17.7%, and its $6.76 billion of revenue exceeded Wall Street's consensus estimates by 4%.
Looking ahead, sell-side analysts expect revenue to grow 10.1% over the next 12 months, according to S&P, similar to its two-year rate. This projection is particularly noteworthy for a company of its scale and implies the market is forecasting success for its products and services.
Operating margin
Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products and, most importantly, keeping them relevant through research and development.
Trane Technologies has performed well over the last five years. It demonstrated high profitability for an industrials business, with an average operating margin of 17.2%. That outcome is unsurprising given its favorable gross margin baseline.
Analyzing the trend in its profitability, Trane Technologies's operating margin rose by 3.2 percentage points over the last five years, as its revenue growth gave it operating leverage.
In Q3, Trane Technologies generated an operating margin of 19.9%, in line with the same quarter last year. This indicates the company's cost structure has recently been stable.
Earnings per share
Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth. For example, a company could inflate its revenue through excessive spending on advertising and promotions.
Trane Technologies's EPS grew at a 20.5% compounded annual growth rate over the last five years, higher than its 11.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
We can take a deeper look into Trane Technologies's earnings to better understand the drivers of its performance. As we mentioned earlier, Trane Technologies's operating margin was flat this quarter but expanded by 3.2 percentage points over the last five years. On top of that, its share count shrank by 8.4%. These are positive signs for shareholders because improving profitability and share buybacks boost EPS growth relative to revenue growth.
As with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For Trane Technologies, its two-year annual EPS growth of 16.6% was lower than its five-year trend. Still, its growth was good, and an acceleration would be welcome.
In Q3, Trane Technologies reported adjusted EPS of $4.86, up from $3.88 in the same quarter last year. This beat analysts' consensus estimates by 2.6%. Over the next 12 months, Wall Street expects Trane Technologies's full-year EPS to grow 17.1% from $14.66 to $17.17, according to S&P.
Key takeaways from Trane Technologies's Q3 results
We were impressed by how significantly Trane Technologies blew past analysts' revenue expectations this quarter. We were also glad its EPS outperformed Wall Street's estimates. Looking ahead, full-year EPS guidance was reaffirmed. Overall, this print had some key positives. Investors were likely hoping for more, and shares traded down 4.4% to $428.59 immediately after reporting.
For investors considering Trane Technologies, the latest quarter is just one part of its longer-term business quality. Quality, combined with valuation, can help determine whether the stock is a buy. For more on those factors, read our free full research report here .
