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Key Takeaways OTIS trades at 16.1X forward earnings, below its five-year median and key industry benchmarks.Otis cut 2026 EPS, operating profit and free cash flow guidance while keeping net sales unchanged.OTIS faces margin pressure as earnings estimates decline despite ongoing buybacks and a higher dividend. Otis Worldwide Corporation (OTIS - Free Report) has fallen 19% year to date, putting valuation back near the center of the investment debate.

The pullback offers a lower entry multiple, but it also reflects weaker profit visibility. Investors now have to weigh the recurring Service business, cash generation and capital returns against reduced guidance and margin execution risk.

OTIS Valuation Sits Below Key Historical BenchmarksOTIS traded at 16.1X forward 12-month earnings, a discount to its five-year median of 23.01X. That gap suggests the stock already reflects a more cautious earnings outlook.

The discount also extends beyond its own history. The stock traded below the Zacks sub-industry multiple of 21.55X, the sector multiple of 21.86X and the S&P 500 multiple of 20.42X. The $76 price target was based on a 17.29X forward multiple, still below its longer-term median.

Carrier Global Corporation (CARR - Free Report) , another industrial building-systems name, offers a useful comparison because investors also evaluate its service and installed-base exposure. United Rentals, Inc. (URI - Free Report) sits in a different part of the industrial cycle, but it gives investors another read on equipment demand and construction-related spending.

Otis Guidance Cuts Weaken the Earnings CaseOtis lowered adjusted earnings per share guidance for 2026 to $4.01-$4.05 from $4.20-$4.24. Adjusted operating profit guidance was cut to about $2.4 billion from about $2.5 billion.

Adjusted free cash flow guidance also moved down to $1.50-$1.55 billion from $1.60-$1.65 billion. Net sales guidance stayed at $15.1-$15.3 billion, so the revision points less to a revenue shortfall and more to weaker conversion from sales into profit and cash flow.

OTIS Cash Returns Offer Partial Downside SupportCash returns remain part of the case for OTIS. First-half adjusted free cash flow reached $562 million, while the company repurchased roughly $800 million of shares in the first half.

The dividend was raised 5%, and the stock offered a dividend yield of 2.5%. These actions may not fully offset margin pressure, but they provide a measure of shareholder-return support while management works through cost and productivity issues.

Owens Corning Inc (OC - Free Report) , a building-products peer, is another relevant industrial comparison for investors tracking construction-linked demand and margin resilience. Its inclusion helps frame OTIS within a broader group where operating execution often matters as much as end-market exposure.

Otis Earnings Estimates and Margins Raise CautionMargin trends are the main reason the lower valuation does not automatically create a clear buying signal. Adjusted operating margin contracted 180 basis points to 15.2% in the second quarter.

Service margin fell 170 basis points to 23.2%, even as segment sales increased. New Equipment margin declined 220 basis points to 3.1%, pressured by lower volume, unfavorable pricing and adverse mix. The fiscal 2026 earnings per share estimate also fell 4.7% over four weeks, showing that expectations were still resetting.

OTIS Scores Point to a Mixed Investment SetupThe bottom line is that OTIS looks cheaper, but the discount comes with visible earnings and margin risks. A durable Service model and cash returns support the long-term profile, while guidance cuts keep near-term conviction limited.

The stock currently carries a Zacks Rank #4 (Sell). That rank weighs against treating the valuation discount as an immediate buying signal because the Zacks Rank is tied to short-term earnings estimate trends.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Style Scores show a mixed setup. OTIS has a Growth Score of B and a VGM Score of B, indicating better relative characteristics on growth and the combined value, growth and momentum framework. Its Value Score of C and Momentum Score of C are more neutral, reinforcing a cautious stance until estimate trends and margins show steadier footing.

I maintain a hold rating on Otis Worldwide Corporation as strong service and modernization demand is not yet translating into earnings growth. Service margins contracted due to higher labor costs and slower productivity ramp from new mechanics, despite robust backlog and retention improvements. New equipment sales remain weak overall, with China still a drag, but the Americas show promising order momentum and backlog growth.

Otis Worldwide Today

$69.44 -0.97 (-1.37%)

As of 02:17 PM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$69.16▼

$94.57Dividend Yield2.53%

P/E Ratio18.52

Price Target$95.45

Otis Worldwide NYSE: OTIS just gave income investors a gift wrapped in a sell-off. Shares dropped by more than 2% the day the elevator giant reported Q2 2026 earnings. 

The company met expectations with adjusted earnings per share (EPS) of $1.01. Then, management trimmed its profit outlook for the second consecutive quarter.

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But look past the short-term outlook, and a different story emerges. Sales are growing, the backlog is the strongest it's been in years, and the company’s dividend keeps getting bigger.

For investors willing to separate this quarter's cost pressure from next year's payoff, Otis looks less like a broken story and more like a company in the middle of a renovation.

Otis Earnings Show Strong Sales, But Margin Pressure PersistsNet sales in the quarter climbed 7% year-over-year to $3.86 billion, with organic growth of 6%. Service, which is Otis's highest-margin, most durable business at 94% of segment operating profit, grew organic sales 9%. Modernization orders were up 24%, and the backlog was up a striking 26% on a constant currency basis. That backlog number is a leading indicator of revenue that Otis hasn't even booked yet.

That was the good news. The bad news showed up in margins. Adjusted operating profit fell to $587 million from $612 million, and adjusted operating margin contracted 180 basis points to 15.2%. Adjusted EPS, as stated earlier, came in at $1.01, down from $1.05 a year ago. New Equipment was the drag. Sales were flat, but operating profit was down 41% as new-equipment sales in China fell in the "high teens" and productivity investments bit into margins.

Why Otis Lowered Guidance Despite Solid Revenue GrowthOtis didn't touch its sales outlook. Total net sales guidance stays at $15.1B to $15.3B, still framed as "up low to mid-single digits" organically. What moved was cost: management now expects constant-currency adjusted operating profit down $45 million to $15 million for the year, versus a prior call for growth of $20M–$60M. Translate that to EPS, and 2026 guidance lands at $4.01 to $4.05, essentially flat against 2025's $4.05.

The culprit is a familiar one in this earnings season. That is, labor and material cost inflation outrunning pricing gains in the near term. The cut is also due to $20 million in spending to balance micro-pricing against customer retention, and $50 million in productivity and field-cost initiatives that management is choosing to absorb now rather than defer.

Why OTIS Still Appeals to Dividend InvestorsOtis raised its dividend by 5% this quarter and still repurchased approximately $400 million in stock. That brought year-to-date buybacks to approximately $800 million. That’s unchanged from the company’s prior guidance despite the profit cut.

Adjusted free cash flow guidance did dip slightly, to $1.5B–$1.55B from $1.6B–$1.65B, but management isn't pulling back capital return to fund the investment cycle. That should make investors comfortable that Otis is treating margin pressure as a controllable, temporary cost of building future capacity, not a sign of a deteriorating business.

The bet for income-oriented investors is straightforward: get paid a growing dividend to hold through a period where Otis is reinvesting in service quality, pricing discipline, and a backlog that's already up 26%. If modernization and repair volumes convert that backlog into revenue as planned in 2027, today's margin trough becomes tomorrow's operating leverage.

The Biggest Risks Facing OTISTwo consecutive guidance cuts on profitability is not nothing, and "flattish EPS" for a full year is a tough sell to growth investors. Labor and material cost inflation could persist longer than management expects. Also, a slowdown in its New Equipment business, particularly in China, where organic growth fell more than 20% in the first half, remains a genuine drag with no clear inflection point yet.

Otis Stock Tests Key Support After EarningsThe chart tells a story of a stock that’s still looking for a bottom. OTIS peaked near $96 in February 2026 and slid roughly 27% into a low near $70 by June, well below its 50-day SMA, which currently sits at about $72. That’s right where July 22's intraday decline stalled (high of $72.26) before reversing to close at $70.25.

The relative strength index (RSI) reading of 41, below its own 14-period average of 51, shows momentum has rolled over again after a brief attempt to reclaim the 50-day line in July. It's not oversold territory yet, but it's a stock that has repeatedly failed to hold above its 50-day average since March. This is a level bulls will want to see reclaimed and held before calling this a real turn.

OTIS chart displaying a price floor around $72, with RSI of 41.

For now, OTIS looks like a name in a basing pattern: beaten down, dividend-supported, and waiting on either a cost inflection or a technical breakout to confirm the next leg. But investors with a time horizon of over 12 months may be rewarded with growth as the company’s backlog drives future earnings.

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Why Otis Worldwide Stock Keeps Going UpOtis Worldwide NYSE: OTIS reported stronger second-quarter organic sales growth in 2026, driven by its service business, but lowered parts of its profit outlook as investments in service quality, retention initiatives and productivity pressures weighed on margins.

Chair, CEO and President Judy Marks said the company delivered “a solid quarter with a significant step-up in organic sales growth,” citing accelerating service revenue, improving new equipment trends and strong cash generation. Net sales were $3.9 billion, with organic sales up 6%.

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Why Investors Can Ride Otis Worldwide Stock for a Long TimeAdjusted operating profit declined by $32 million in the quarter, excluding a $7 million foreign exchange tailwind, as higher volume and price were offset by inflation, mix and productivity impacts. Adjusted operating margin fell 180 basis points to 15.2%, while adjusted earnings per share declined 4%, or $0.04, due to operational performance, partially offset by favorable foreign exchange rates.

Service Growth Leads Results, But Margins Decline Otis’ service segment remained the company’s main growth driver. Cristina Mendez, executive vice president and chief financial officer, said service organic sales rose 9% in the quarter, with growth across all lines of business and regions.

Maintenance and repair organic sales increased 6%, including 3% maintenance growth and 12% repair growth. Mendez said repair delivered its strongest performance in the past 10 quarters. Modernization organic sales increased 24%, which she described as the highest growth rate since Otis’ spin-off.

Modernization orders rose 9% in the quarter, helped by significant growth in China and low-single-digit growth in EMEA and Asia Pacific, partly offset by a mid-single-digit decline in the Americas due to a difficult comparison with the prior year. Modernization backlog increased 26% year-over-year at constant currency.

Despite the revenue growth, service operating margin declined 170 basis points from a year earlier to 23.2%. Service operating profit rose $16 million at constant currency to $599 million, as higher volume and pricing more than offset labor costs, strategic investments, productivity headwinds, material costs and unfavorable mix.

Marks said service margins were pressured by labor and material cost increases as Otis ramps operations to execute its repair and modernization backlog. She said the company expects margins to recover in coming quarters as service revenue growth continues.

New Equipment Shows Signs of Stabilization New equipment organic sales declined 1% in the quarter, which Mendez said was the lowest rate of decline in the past nine quarters. Growth in the Americas and Asia Pacific was more than offset by lower sales in China and EMEA.

Americas new equipment sales increased 10%, supported by backlog conversion and orders growth from prior periods. Asia Pacific sales grew in the low single digits, driven by strength in Japan and India and partly offset by lower sales in Korea. EMEA sales declined 4%, primarily due to weakness in the Middle East and Southern Europe. China new equipment sales declined in the high teens, consistent with the backlog decline, though Mendez said the region showed slight sequential improvement.

New equipment orders declined 5% year-over-year. Double-digit growth in the Americas and low-single-digit growth in EMEA were more than offset by declines in Asia Pacific, due to tough comparisons, and in China. New equipment backlog increased 4% year-over-year at constant currency, or 9% excluding China.

New equipment operating profit declined $30 million at constant currency to $40 million, and margin fell 220 basis points to 3.1%. Mendez said the decline reflected lower volume, unfavorable price and mix.

Service Quality Investments Affect Outlook Otis said it is investing in service quality as part of a broader effort to improve customer retention and strengthen its operating model. Marks said the company previously outlined a plan to invest $50 million in service excellence and pricing during 2026. Otis invested $15 million in the second quarter and $30 million in the first half, with another $20 million expected in the second half.

Marks said service quality metrics improved in territories targeted by the program, with the company’s service quality index up seven points in those operating territories. She said some territories also showed retention improvement, though overall retention excluding China was down in the quarter.

Marks said the timing of retention benefits has shifted, prompting Otis to temper its AI micro-pricing implementation in maintenance. She said the company continues to see strong results from micro-pricing in repair, where pricing actions flow through more quickly because repair backlog is typically executed within one or two months.

Mendez said Otis had expected $50 million of incremental price impact this year, including $35 million from repair and $15 million from maintenance. The repair portion remains in the outlook, while the maintenance micro-pricing upside is being balanced against retention concerns.

Otis also cited productivity and cost headwinds. Mendez said the company now anticipates an additional $50 million impact versus its prior outlook, with $30 million related to temporary ramp-up costs for resources and higher labor rates to accelerate execution, and $20 million tied to material inflation and service quality investments.

Full-Year Guidance Revised Otis maintained its 2026 sales outlook, continuing to expect net sales of $15.1 billion to $15.3 billion and organic sales growth in the low- to mid-single-digit range. Marks said the company still expects the global new equipment market to stabilize, with growth in all regions except China, and expects modernization to remain robust with double-digit growth across all regions.

However, Mendez said Otis now expects adjusted operating profit to range from down $30 million to flat on an actual currency basis, and down $45 million to down $15 million at constant currency. The revised outlook reflects retention and tempered maintenance micro-pricing impacts, as well as productivity and cost headwinds.

Adjusted free cash flow is now expected to be between $1.5 billion and $1.55 billion. Adjusted EPS is expected to be in a range of $4.01 to $4.05, reflecting the lower operating profit outlook and a $0.04 negative impact from foreign exchange.

For the third quarter, Mendez said service organic sales are expected to remain strong at mid-single-digit growth, driven mainly by repair and modernization. New equipment organic sales are expected to continue improving sequentially. She said total adjusted operating profit is expected to be roughly flat year-over-year in the third quarter, while adjusted EPS is expected to decline at a level similar to the first half due to tax rate timing.

Cash Flow and Capital Returns Remain Priorities Otis generated adjusted free cash flow of $290 million in the second quarter, up 19% from a year earlier. Marks said the company’s cash generation allows it to invest in growth and strategic investments, including the acquisition of a majority stake in WeMaintain, while returning capital to shareholders.

In the first half of 2026, Otis repurchased approximately $800 million of shares and raised its dividend by 5%, returning more than $1.1 billion to shareholders.

Marks said Otis remains confident in its strategy, pointing to revenue growth, improving service quality metrics and progress on operational initiatives. She said the company is working to standardize field and sales processes across its 1,400 operating territories through a service operating model aimed at improving frontline execution.

“While the timing of retention benefits has shifted and we have observed headwinds in productivity and cost, we are as confident as ever in our strategy and our service flywheel,” Marks said.

About Otis Worldwide (NYSE:OTIS)Otis Worldwide Corporation is a manufacturer, installer and servicer of vertical transportation systems, including elevators, escalators and moving walkways. The company designs and supplies new equipment for commercial, residential and industrial buildings, and provides ongoing maintenance and repair services aimed at maximizing equipment availability and safety. Otis also offers modernization solutions to upgrade aging systems and improve performance, accessibility and energy efficiency.

In addition to new equipment sales, a significant portion of Otis's business derives from long-term service contracts and responsive maintenance work.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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Key Takeaways OTIS beat second-quarter EPS estimates, while revenues rose 7.3% year over year on Service strength.OTIS reported 9% modernization order growth and a 24% increase in modernization backlog at constant currency. OTIS reaffirmed its sales outlook but lowered adjusted operating profit, EPS and free cash flow guidance. Otis Worldwide Corporation (OTIS - Free Report) reported mixed second-quarter 2026 results, wherein earnings beat the Zacks Consensus Estimate but declined year over year. Meanwhile, net sales surpassed the consensus mark and increased from the prior year's reported figure.

Following the results, OTIS’ shares declined 1.9% during today's pre-market trading session, likely reflecting negative investor sentiment toward its reduced full-year adjusted EPS, adjusted operating profit and free cash flow guidance despite continued strength in the Service business.

Otis' second-quarter performance reflected continued momentum in its Service business, driven by strong modernization and repair activity, accelerating maintenance trends and robust backlog growth. However, higher investments in Service initiatives and continued weakness in the New Equipment business weighed on profitability.

Inside OTIS' Q2 HeadlinesOTIS reported adjusted earnings per share (EPS) of $1.01, beating the Zacks Consensus Estimate of $1.00 by 1%. In the year-ago quarter, it reported adjusted EPS of $1.05.

Net sales of $3.86 billion surpassed the consensus mark of $3.72 billion by 3.7% and increased 7.3% from $3.60 billion reported in the year-ago quarter. Organic sales increased 6% year over year, led by continued strength in the Service segment. Modernization orders increased 9% at constant currency, while modernization backlog expanded 24% year over year, highlighting healthy demand across the business.

Adjusted operating margin contracted 180 basis points (bps) year over year to 15.2%, reflecting unfavorable segment performance and ongoing investments in strategic Service growth initiatives, partly offset by a favorable business mix.

Segment Details of OTISService: Net sales from the segment increased 11% year over year to $2.58 billion. Organic sales rose 9%, driven by broad-based strength across maintenance, repair and modernization activities. Our model estimated organic sales for the segment to grow 5.4%.

Organic maintenance and repair sales increased 6%, while organic modernization sales jumped 24% from the prior-year quarter.

Segment operating profit increased to $599 million from $578 million a year ago. However, segment operating margin contracted 170 bps year over year to 23.2% as higher labor costs, ongoing investments in strategic Service initiatives, productivity headwinds, material costs and unfavorable mix more than offset higher volume and favorable pricing.

New Equipment: Net sales from the segment were $1.28 billion, flat year over year. Organic sales decreased 1%, reflecting a high-teens decline in China and a mid-single-digit decline in EMEA, partly offset by approximately 10% organic growth in the Americas and low single-digit growth in Asia Pacific. Our model predicted organic sales for the New Equipment segment to decrease 3.3%.

New Equipment orders declined 5% at constant currency, while backlog increased 3% at actual currency and 4% at constant currency.

Segment operating profit declined to $40 million from $68 million in the year-ago quarter. Segment operating margin contracted 220 bps year over year to 3.1%, primarily due to lower volume, unfavorable pricing and adverse mix.

Financial Position of OtisNet cash provided by operating activities totaled $267 million during the second quarter compared with $215 million in the prior-year period.

Free cash flow improved to $223 million from $179 million a year ago, while adjusted free cash flow increased to $290 million from $243 million. During the quarter, the company repurchased approximately $400 million of shares, underscoring its continued focus on returning capital to shareholders.

OTIS Revises 2026 GuidanceOtis reaffirmed its 2026 net sales outlook of $15.1-$15.3 billion, implying approximately 4.6-6% year-over-year growth. Organic sales growth is also still expected in the low to mid-single-digit range.

Organic New Equipment sales are now expected to range from down low single digits to flat, compared with the previous outlook of flat to low single digits. Organic Service sales guidance remained unchanged at mid to high-single-digit growth.

The company lowered its adjusted operating profit outlook to approximately $2.4 billion from the previous expectation of approximately $2.5 billion. Adjusted EPS is now expected in the range of $4.01-$4.05, down from the prior outlook of $4.20-$4.24.

Otis also reduced its adjusted free cash flow guidance to $1.50-$1.55 billion from the previous $1.60-$1.65 billion.

OTIS' Zacks Rank & Key PicksOtis currently carries a Zacks Rank #4 (Sell).

Here are some better-ranked stocks from the Industrial Products sector:

CECO Environmental Corp. (CECO - Free Report) sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company delivered a trailing four-quarter earnings surprise of 46.5%, on average. CECO stock has climbed 20% in the past six months. The Zacks Consensus Estimate for CECO Environmental’s 2026 sales and EPS indicates growth of 66.4% and 121.4%, respectively, from the prior-year levels.

W.W. Grainger, Inc. (GWW - Free Report) holds a Zacks Rank of #2 (Buy) at present. The company delivered a trailing four-quarter earnings surprise of 4.2%, on average. GWW stock has gained 28.7% in the past six months.

The Zacks Consensus Estimate for W.W. Grainger’s 2026 sales and EPS indicates growth of 8.2% and 15.2%, respectively, from the prior-year levels.

Applied Industrial Technologies, Inc. (AIT - Free Report) presently carries a Zacks Rank 2. The company delivered a trailing four-quarter earnings surprise of 4%, on average. AIT stock has jumped 21.8% in the past six months.

The Zacks Consensus Estimate for Applied Industrial Technologies’ fiscal 2026 sales and EPS indicates growth of 7.5% and 5.8%, respectively, from the year-ago period’s levels.

Otis delivers organic Service sales growth of 9% matching the highest level since spin with strong double-digit growth in modernization and repair and accelerating maintenance trends

Second quarter 2026

Net sales up 7% and organic sales up 6%, driven by Service net sales up 11% with organic sales up 9%, and New Equipment net sales flat with organic sales down (1)%, improving sequentially GAAP operating profit up $28 million and adjusted operating profit down $25 million Modernization orders up 9% at constant currency, backlog up 24%, 26% at constant currency Operating cash flow of $267 million; adjusted free cash flow of $290 million Share repurchases of approximately $400 million First half 2026

Net sales up 7% and organic sales up 4%, driven by Service net sales up 11% with organic sales up 7% GAAP operating profit up $156 million and adjusted operating profit down $35 million Operating cash flow of $680 million; adjusted free cash flow of $562 million Share repurchases of approximately $800 million , /PRNewswire/ -- Otis Worldwide Corporation (NYSE:OTIS) reported second quarter 2026 net sales of $3.9 billion with organic sales up 6% versus the prior year. GAAP earnings per share (EPS) increased 13% to $1.12 and adjusted EPS decreased 4% to $1.01.

"Otis delivered a solid quarter, with net sales up 7%, supported by growth across all Service lines and sequential improvement in New Equipment trends. Our strategy, actions and investments in Service quality are gaining traction as evidenced by double-digit growth in both modernization and repair sales with maintenance growth also accelerating, contributing to Service sales growth that matched the highest level achieved since spin," said Chair, CEO & President Judy Marks. "Strong backlog in both modernization and New Equipment provides good visibility and supports our expectation for continued growth in the quarters ahead. We remain confident in the long-term growth opportunities across our Service portfolio. An aging installed base and our customers' increasing focus on reliability, uptime and Service quality are driving favorable demand in both modernization and repair, contributing to drive sustained growth and value creation."

Judy Marks continued, "As we look to the second half of the year and take a measured approach to our outlook, we remain confident in the durability of our Service-led growth model. We are continuing to invest in our strategic priorities including Service quality, pricing initiatives, and the application of digital technology with a focus on front-line operating excellence and strong execution across the globe. This Service-driven strategy reinforces our conviction in the long-term growth potential of the business and our ability to deliver sustainable value creation for shareholders over time."

Key Figures

Quarter Ended June 30,

Six Months Ended June 30,

(dollars in millions, except per share
amounts)

2026

2025

Y/Y

Y/Y
(CFX)

2026

2025

Y/Y

Y/Y
(CFX)

Net sales

$  3,859

$  3,595

7 %

6 %

$  7,425

$  6,945

7 %

4 %

Organic sales growth

6 %

4 %

GAAP

Operating profit

$    575

$    547

$     28

$  1,114

$    958

$    156

Operating profit margin

14.9 %

15.2 %

(30) bps

15.0 %

13.8 %

120 bps

Net income

$    428

$    393

9 %

$    768

$    636

21 %

Earnings per share

$   1.12

$   0.99

13 %

$   1.99

$   1.60

24 %

Adjusted non-GAAP comparison

Operating profit

$    587

$    612

$   (25)

$  (32)

$  1,137

$  1,172

$   (35)

$  (70)

Operating profit margin

15.2 %

17.0 %

(180) bps

15.3 %

16.9 %

(160) bps

Net income

$    389

$    416

(6) %

$    736

$    784

(6) %

Earnings per share

$   1.01

$   1.05

(4) %

$   1.90

$   1.97

(4) %

Second quarter net sales of $3.9 billion, increased 7% versus the prior year, driven by Service sales with growth in all lines of business.

Second quarter GAAP operating profit of $575 million increased $28 million driven primarily by the absence of UpLift transformation costs, separation-related adjustments, and other non-recurring items in the prior year. Adjusted operating profit of $587 million decreased $25 million at actual currency and $32 million at constant currency, driven by growth in Service more than offset by a decline in New Equipment and other corporate adjustments. GAAP operating profit margin contracted 30 basis points to 14.9% and adjusted operating profit margin of 15.2% declined 180 basis points versus the prior year driven by unfavorable segment performance and other corporate adjustments, partially offset by segment mix. The performance was impacted by ongoing investment in key Service growth initiatives, which were expanded this year to capitalize on strong repair and modernization demand, enhance Service excellence, and build long-term pricing capabilities.

GAAP EPS of $1.12 increased 13% compared to the prior year primarily driven by the absence of UpLift transformation costs, separation-related adjustments, and other non-recurring items in the prior year. Adjusted EPS of $1.01 decreased 4% driven by operational performance, higher interest, and higher tax rate, partially offset by favorable foreign exchange rates, a lower share count, and lower noncontrolling interest.

Service

Quarter Ended June 30,

Six Months Ended June 30,

(dollars in millions)

2026

2025

Y/Y

Y/Y
(CFX)

2026

2025

Y/Y

Y/Y
(CFX)

Net sales

$ 2,580

$ 2,319

11 %

10 %

$ 4,997

$ 4,506

11 %

8 %

Organic sales

9 %

7 %

Segment operating profit

$   599

$   578

$     21

$     16

$ 1,155

$ 1,115

$     40

$      6

Segment operating profit margin

23.2 %

24.9 %

(170) bps

23.1 %

24.7 %

(160) bps

In the second quarter, net sales of $2.6 billion increased 11%, with a 9% increase in organic sales. Organic maintenance and repair sales increased 6% and organic modernization sales increased 24%.

Segment operating profit of $599 million increased $21 million at actual currency and increased $16 million at constant currency as higher volume and favorable pricing more than offset higher labor cost including the impact of ongoing strategic initiatives and productivity, material cost headwinds and unfavorable mix. Segment operating profit margin contracted 170 basis points to 23.2%.

New Equipment

Quarter Ended June 30,

Six Months Ended June 30,

(dollars in millions)

2026

2025

Y/Y

Y/Y
(CFX)

2026

2025

Y/Y

Y/Y
(CFX)

Net sales

$ 1,279

$ 1,276

0 %

(1) %

$ 2,428

$ 2,439

(0) %

(3) %

Organic sales

(1) %

(3) %

Segment operating profit

$     40

$     68

$   (28)

$   (30)

$     78

$   134

$   (56)

$   (57)

Segment operating profit margin

3.1 %

5.3 %

(220) bps

3.2 %

5.5 %

(230) bps

In the second quarter, net sales of $1.3 billion were flat versus the prior year, with approximately 10% organic sales growth in the Americas, and low single digit growth in Asia Pacific, offset by a high teens decline in China, and a mid-single digit decline in EMEA.

Segment operating profit of $40 million decreased $28 million at actual currency and $30 million at constant currency primarily from the impacts of lower volume, unfavorable price, and mix. Segment operating profit margin contracted 220 basis points to 3.1%.

New Equipment orders were down 5% at constant currency with low teens growth in the Americas, and a low single digit growth in EMEA, more than offset by a greater than 20% decline in Asia Pacific, and a high teens decline in China. New Equipment backlog increased 3% at actual currency and 4% at constant currency.

Cash flow

Quarter Ended June 30,

Six Months Ended June 30,

(dollars in millions)

2026

2025

Y/Y

2026

2025

Y/Y

Cash flow from operations

$        267

$        215

$        52

$        680

$        405

$       275

Free cash flow

$        223

$        179

$        44

$        603

$        335

$       268

Adjusted free cash flow

$        290

$        243

$        47

$        562

$        429

$       133

Second quarter cash flow changes were driven by an increase in net income and changes in working capital.

2026 Outlook1

Otis is revising our full year outlook:

Net sales of $15.1 to $15.3 billion Organic sales up low to mid-single digits Organic New Equipment sales down low single digits to flat Organic Service sales up mid to high single digits Adjusted operating profit of approximately $2.4 billion, down $45 to $15 million at constant currency; down $30 million to flat at actual currency Adjusted EPS of $4.01 to $4.05 Adjusted free cash flow of $1.50 to 1.55 billion 1 Note: When we provide outlook for organic sales, adjusted operating profit, adjusted EPS, adjusted effective tax rate and adjusted free cash flow on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and the corresponding GAAP measures generally is not available without unreasonable effort. See "Use and Definitions of Non-GAAP Financial Measures" below for additional information.

About Otis
Otis is the world's leading elevator and escalator manufacturing, installation, service and modernization company. We move 2.5 billion people a day and maintain approximately 2.5 million customer units worldwide, the industry's largest Service portfolio. Headquartered in Connecticut, USA, Otis is 72,000 people strong, including 45,000 field professionals, all committed to manufacturing, installing and maintaining products to meet the diverse needs of our customers and passengers in more than 200 countries and territories worldwide. For more information, visit www.otis.com and follow us on LinkedIn, YouTube, Instagram and Facebook @OtisElevatorCo.

Use and Definitions of Non-GAAP Financial Measures

Otis Worldwide Corporation ("Otis") reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). We supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial information. The non-GAAP information presented provides investors with additional useful information, but should not be considered in isolation or as substitutes for the related GAAP measures. Moreover, other companies may define non-GAAP measures differently, which limits the usefulness of these measures for comparisons with such other companies. We encourage investors to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. A reconciliation of the non-GAAP measures (referenced in this press release) to the corresponding amounts prepared in accordance with GAAP appears in the attached tables. These tables provide additional information as to the items and amounts that have been excluded from the adjusted measures. Below are our non-GAAP financial measures:

Non-GAAP measure

Definition

Organic sales

Represents consolidated net sales (a GAAP measure), excluding the impact of foreign currency translation, acquisitions and divestitures completed in the preceding twelve months and other significant items of a non-recurring and/or nonoperational nature ("other significant items"). Management believes organic sales is a useful measure in providing period-to-period comparisons of the results of the Company's ongoing operational performance.

Adjusted selling, general and administrative ("SG&A") expense

Represents SG&A expense (a GAAP measure), excluding restructuring costs and other significant items.

Adjusted operating profit

Represents income from continuing operations (a GAAP measure), excluding restructuring costs and other significant items.

Adjusted net interest expense

Represents net interest expense (a GAAP measure), adjusted for the impacts of non-recurring acquisition related financing costs and related net interest expense pending the completion of a transaction and other significant items.

Adjusted noncontrolling interest in earnings

Represents noncontrolling interest in earnings (a GAAP measure), excluding restructuring costs and other significant items, including related tax effects.

Adjusted net income

Represents net income attributable to Otis Worldwide Corporation (a GAAP measure), excluding restructuring costs and other significant items, including related tax effects.

Adjusted earnings per share ("EPS")

Represents diluted earnings per share attributable to common shareholders (a GAAP measure), adjusted for the per share impact of restructuring and other significant items, including related tax effects.

Adjusted effective tax rate

Represents the effective tax rate (a GAAP measure) adjusted for other significant items and the tax impact of restructuring costs and other significant items.

Constant currency

GAAP financial results include the impact of changes in foreign currency exchange rates ("AFX"). We use the non-GAAP measure "at constant currency" or "CFX" to show changes in our financial results without giving effect to period-to-period currency fluctuations. Under U.S. GAAP, income statement results are translated in U.S. dollars at the average exchange rate for the period presented. Management believes that this non-GAAP measure is useful in providing period-to-period comparisons of the results of the Company's ongoing operational performance.

Free cash flow

Represents cash flow from operations (a GAAP measure) less capital expenditures. Management believes free cash flow is a useful measure of liquidity and an additional basis for assessing Otis' ability to fund its activities, including the financing of acquisitions, debt service, repurchases of common stock and distribution of earnings to shareholders. Free cash flow should not be considered an alternative to, or more meaningful than, net cash flows provided by operating activities, or any other measure of liquidity presented in accordance with GAAP.

Adjusted free cash flow

Represents cash flow from operations (a GAAP measure) less capital expenditures, adjusted to exclude certain items management believes affect the comparability of operating results. Management believes adjusted free cash flow is a useful measure of liquidity that provides investors additional information regarding the Company's ability to fund its activities, including the financing of acquisitions, debt service, repurchases of common stock and distribution of earnings to shareholders. Adjusted free cash flow should not be considered an alternative to, or more meaningful than, net cash flows provided by operating activities, or any other measure of liquidity presented in accordance with GAAP.

Management believes that organic sales, adjusted SG&A expense, adjusted operating profit, adjusted net interest expense, adjusted noncontrolling interest in earnings, adjusted net income, adjusted EPS and the adjusted effective tax rate are useful measures in providing period-to-period comparisons of the results of the Company's ongoing operational performance.

When we provide our expectations for adjusted net sales, organic sales, adjusted operating profit, adjusted net interest expense, adjusted noncontrolling interest in earnings, adjusted net income, adjusted effective tax rate, adjusted EPS, free cash flow and adjusted free cash flow on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and the corresponding GAAP measures (expected diluted EPS from continuing operations, operating profit, the effective tax rate, net sales and expected cash flow from operations) generally is not available without unreasonable effort due to potentially high variability, complexity and low visibility as to the items that would be excluded from the GAAP measure in the relevant future period, such as unusual gains and losses, the ultimate outcome of pending litigation, fluctuations in foreign currency exchange rates, the impact and timing of potential acquisitions and divestitures, and other structural changes or their probable significance. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results.

Cautionary Statement

This communication contains statements which, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws. From time to time, oral or written forward-looking statements may also be included in other information released to the public. These forward-looking statements are intended to provide management's current expectations or plans for Otis' future operating and financial performance, based on assumptions currently believed to be valid. Forward-looking statements can be identified by the use of words such as "believe," "expect," "expectations," "plans," "strategy," "prospects," "estimate," "project," "target," "anticipate," "will," "should," "see," "guidance," "outlook," "medium-term," "near-term," "confident," "goals" and other words of similar meaning in connection with a discussion of future operating or financial performance. Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash flow, results of operations, uses of cash, dividends, share repurchases, tax rates, research & development spend, restructuring or transformation actions (including UpLift and related reorganization and outsourcing activities and such actions with respect to our business in China), credit ratings, net indebtedness and other measures of financial performance or potential future plans, strategies or transactions, or statements that relate to climate change and our intent to achieve certain sustainability targets or other corporate responsibility initiatives, including operational impacts and costs associated therewith, and other statements that are not historical facts. All forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. For those statements, Otis claims the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995. Such risks, uncertainties and other factors include, without limitation: (1) the effect of economic conditions in the industries and markets in which Otis and its businesses operate and any changes therein, including financial market conditions, fluctuations in commodity prices and other inflationary pressures, interest rates and foreign currency exchange rates, levels of end market demand in construction, pandemic health issues, natural disasters, whether as a result of climate change or otherwise, and the financial condition of Otis' customers and suppliers; (2) the effect of changes in political conditions in the U.S. and in other countries in which Otis and its businesses operate, including tensions between the U.S. and China and geopolitical conflicts, including the ongoing conflicts and instability in the Middle East and the conflict between Russia and Ukraine on general market conditions, commodity costs, global trade policies and related sanctions, export controls and tariffs, and currency exchange rates in the near term and beyond; (3) challenges in the development, production, delivery, support, employee adoption, performance and realization of the anticipated benefits of advanced technologies and new products and services; (4) future levels of indebtedness, capital spending and research and development spending; (5) future availability of credit and factors that may affect such availability or costs thereof, including credit market conditions and Otis' capital structure; (6) the timing and scope of future repurchases of Otis' common stock, which may be suspended at any time due to various factors, including market conditions and the level of other investing activities and uses of cash; (7) fluctuations in prices and delays and disruptions in delivery of materials and services from suppliers, whether as a result of changes in general economic conditions, geopolitical conflicts or otherwise; (8) cost reduction or containment actions, restructuring or transformation costs and related savings and other consequences thereof, including with respect to UpLift and our China business and related impacts of reorganization, change management and outsourcing activities, as applicable; (9) new business and investment opportunities and the realization of anticipated benefits, including meeting customer expectations and maintaining our competitiveness; (10) the outcome of legal proceedings, investigations and other contingencies; (11) pension plan assumptions and future contributions; (12) the impact of the negotiation of collective bargaining agreements and labor disputes, labor actions, including strikes or work stoppages, and labor inflation in the markets in which Otis and its businesses operate globally; (13) the effect of changes in laws, regulations and enforcement priorities in the U.S. and other countries in which Otis and its businesses operate; (14) the ability of Otis to retain and hire key personnel; (15) the scope, nature, impact or timing of acquisition and divestiture activity, the integration of acquired businesses into existing businesses and realization of synergies and opportunities for growth and innovation and incurrence of related costs; (16) the determination by the Internal Revenue Service (the "IRS") and other tax authorities that the distribution or certain related transactions should be treated as taxable transactions in connection with the separation (the "Separation") of Otis and Carrier Global Corporation ("Carrier") from United Technologies Corporation (now known as RTX Corporation ("RTX"); and (17) our obligations and disputes that have or may hereafter arise under the agreements we entered into with RTX and Carrier in connection with the Separation. The above list of factors is not exhaustive or necessarily in order of importance. For additional information on identifying factors that may cause actual results to vary from those stated in forward-looking statements, see Otis' registration statement on Form 10 and the reports of Otis on Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC from time to time. Any forward-looking statement speaks only as of the date on which it is made, and Otis assumes no obligation to update or revise such statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Otis Worldwide Corporation
Condensed Consolidated Statements of Operations

Quarter Ended June 30,

Six Months Ended June 30,

(Unaudited)

(Unaudited)

(dollars in millions, except per share amounts; shares in millions)

2026

2025

2026

2025

Net Sales

$        3,859

$        3,595

$       7,425

$       6,945

Costs and Expenses:

Cost of products and services sold

2,723

2,506

5,207

4,855

Research and development

39

38

77

75

Selling, general and administrative

520

499

1,030

963

Total Costs and Expenses

3,282

3,043

6,314

5,893

Other income (expense), net

(2)

(5)

3

(94)

Operating profit

575

547

1,114

958

Non-service pension cost (benefit)

2

—

2

—

Interest expense (income), net

26

26

85

71

Net income before income taxes

547

521

1,027

887

Income tax expense (benefit)

98

98

225

208

Net income

449

423

802

679

Less: Noncontrolling interest in subsidiaries' earnings

21

30

34

43

Net income attributable to Otis Worldwide Corporation

$          428

$          393

$         768

$         636

Earnings Per Share of Common Stock:

Basic

$         1.12

$         1.00

$        1.99

$        1.61

Diluted

$         1.12

$         0.99

$        1.99

$        1.60

Weighted Average Number of Shares Outstanding:

Basic shares

382.6

393.7

385.2

395.1

Diluted Shares

383.5

395.8

386.4

397.3

Otis Worldwide Corporation
Reconciliation of Reported (GAAP) to Adjusted Operating Profit & Operating Profit Margin

Quarter Ended June 30,

Six Months Ended June 30,

(Unaudited)

(Unaudited)

(dollars in millions)

2026

2025

2026

2025

Net Sales

New Equipment

$     1,279

$     1,276

$     2,428

$     2,439

Service

2,580

2,319

4,997

4,506

Total Net Sales

$     3,859

$     3,595

$     7,425

$     6,945

Operating Profit

New Equipment

$         40

$         68

$         78

$       134

Service

599

578

1,155

1,115

Total segment operating profit

639

646

1,233

1,249

Corporate and Unallocated

(64)

(99)

(119)

(291)

Total Otis GAAP Operating Profit

575

547

1,114

958

UpLift restructuring

—

25

—

45

Other restructuring

11

12

18

35

UpLift transformation costs

—

18

—

41

Separation-related adjustments 1

—

9

5

61

Litigation-related settlement costs 2

—

—

—

21

Held for sale impairment

—

—

—

10

Other, net

1

1

—

1

Total Otis Adjusted Operating Profit

$       587

$       612

$     1,137

$     1,172

Reported Total Operating Profit Margin

14.9 %

15.2 %

15.0 %

13.8 %

Adjusted Total Operating Profit Margin

15.2 %

17.0 %

15.3 %

16.9 %

1 Separation-related adjustments in the quarters and six months ended June 30, 2026 and 2025 represent estimated amounts
due to RTX Corporation (our former parent) in accordance with the Tax Matters Agreement, including those amounts related
to a favorable ruling received in August 2024 regarding a tax litigation in Germany.

2 Litigation-related settlement costs in the six months ended June 30, 2025 represent the aggregate amount of settlement costs
and increase in loss contingency accruals, excluding legal costs, for certain legal matters that are outside of the ordinary
course of business due to the size, complexity and/or unique facts of these matters.

Otis Worldwide Corporation
Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Net Income, Earnings Per Share, and Effective Tax Rate

Quarter Ended June 30,

Six Months Ended June 30,

(Unaudited)

(Unaudited)

(dollars in millions, except per share amounts)

2026

2025

2026

2025

Adjusted Operating Profit

$       587

$       612

$     1,137

$     1,172

Non-service pension cost (benefit)

2

—

2

—

Adjusted net interest expense 1, 2

68

57

127

103

Adjusted income from operations before income taxes

517

555

1,008

1,069

Income tax expense (benefit)

98

98

225

208

Tax impact on restructuring and non-recurring items

—

11

4

32

Non-recurring tax items 2

20

12

20

12

Adjusted net income from operations

399

434

759

817

Adjusted noncontrolling interest 2, 3

10

18

23

33

Adjusted net income attributable to common
shareholders

$       389

$       416

$       736

$       784

GAAP net income attributable to common shareholders

$       428

$       393

$       768

$       636

UpLift restructuring

—

25

—

45

Other restructuring

11

12

18

35

UpLift transformation costs

—

18

—

41

Separation-related adjustments

—

9

5

61

Litigation-related settlement costs

—

—

—

21

Held for sale impairment

—

—

—

10

Interest income related to non-recurring tax items 1, 2

(31)

(15)

(31)

(16)

Tax effects of restructuring, non-recurring items and other
adjustments

—

(11)

(4)

(32)

Non-recurring tax items 2

(20)

(12)

(20)

(12)

Other, net 3

1

(3)

—

(5)

Adjusted net income attributable to common
shareholders

$       389

$       416

$       736

$       784

Diluted Earnings Per Share

$      1.12

$      0.99

$      1.99

$      1.60

Impact to diluted earnings per share

(0.11)

0.06

(0.09)

0.37

Adjusted Diluted Earnings Per Share

$      1.01

$      1.05

$      1.90

$      1.97

Effective Tax Rate

17.9 %

18.8 %

21.9 %

23.4 %

Impact of adjustments on effective tax rate

4.9 %

3.0 %

2.8 %

0.2 %

Adjusted Effective Tax Rate

22.8 %

21.8 %

24.7 %

23.6 %

1 In August 2024, we received a favorable ruling regarding a tax litigation in Germany. As a result, income tax benefits and
related interest income were recorded in 2024. Net interest expense is reflected as adjusted without $7 million of interest
income for the quarter and six months ended June 30, 2026, compared to $1 million and $2 million for the same periods in
2025.

2 Certain tax reserves were adjusted in the second quarter of 2026 and 2025. As a result, Net interest expense and
Noncontrolling interest are reflected as adjusted without $35 million of interest income and $11 million of the noncontrolling
interest share of the reserves adjustments, respectively, for the quarter and six months ended June 30, 2026, compared to
$30 million and $16 million, respectively, for the same periods in 2025.

3 Noncontrolling interest is reflected as adjusted without $4 million and $6 million of the noncontrolling interest share of
Other restructuring for the quarter and six months ended June 30, 2025.

Otis Worldwide Corporation
Components of Changes in Net Sales

Quarter Ended June 30, 2026 Compared with Quarter Ended June 30, 2025

Factors Contributing to Total % Change in Net Sales

Organic

FX

Translation

Acquisitions /

Divestitures,
net and Other

Total

New Equipment

(1) %

1 %

— %

— %

Service

9 %

1 %

1 %

11 %

Maintenance and Repair

6 %

1 %

1 %

8 %

Modernization

24 %

— %

2 %

26 %

Total Net Sales

6 %

1 %

— %

7 %

Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025

Factors Contributing to Total % Change in Net Sales

Organic

FX

Translation

Acquisitions /

Divestitures,
net and Other

Total

New Equipment

(3) %

3 %

— %

— %

Service

7 %

3 %

1 %

11 %

Maintenance and Repair

5 %

3 %

1 %

9 %

Modernization

16 %

2 %

— %

18 %

Total Net Sales

4 %

3 %

— %

7 %

Components of Changes in New Equipment Backlog

June 30, 2026

Y/Y Growth %

New Equipment Backlog increase at actual currency

3 %

Foreign exchange impact to New Equipment Backlog

1 %

New Equipment Backlog increase at constant currency

4 %

Components of Changes in Modernization Backlog

June 30, 2026

Y/Y Growth %

Modernization Backlog increase at actual currency

24 %

Foreign exchange impact to Modernization Backlog

2 %

Modernization Backlog increase at constant currency

26 %

Otis Worldwide Corporation
Reconciliation of Segment and Total Adjusted Operating Profit at Constant Currency

Quarter Ended June 30, 2026 Compared with Quarter Ended June 30, 2025

(dollars in millions)

2026

2025

Y/Y

New Equipment

Segment Operating Profit

$               40

$               68

$             (28)

Impact of foreign exchange

(2)

—

(2)

Segment Operating Profit at constant currency

$               38

$               68

$             (30)

Service

Segment Operating Profit

$             599

$             578

$               21

Impact of foreign exchange

(5)

—

(5)

Segment Operating Profit at constant currency

$             594

$             578

$               16

Otis Consolidated

Adjusted Operating Profit

$             587

$             612

$             (25)

Impact of foreign exchange

(7)

—

(7)

Adjusted Operating Profit at constant currency

$             580

$             612

$             (32)

Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025

(dollars in millions)

2026

2025

Y/Y

New Equipment

Segment Operating Profit

$               78

$             134

$             (56)

Impact of foreign exchange

(1)

—

(1)

Segment Operating Profit at constant currency

$               77

$             134

$             (57)

Service

Segment Operating Profit

$           1,155

$           1,115

$               40

Impact of foreign exchange

(34)

—

(34)

Segment Operating Profit at constant currency

$           1,121

$           1,115

$                6

Otis Consolidated

Adjusted Operating Profit

$           1,137

$           1,172

$             (35)

Impact of foreign exchange

(35)

—

(35)

Adjusted Operating Profit at constant currency

$           1,102

$           1,172

$             (70)

Otis Worldwide Corporation
Condensed Consolidated Balance Sheet

June 30, 2026

December 31, 2025

(dollars in millions)

(Unaudited)

Assets

Cash and cash equivalents

$                  813

$                1,096

Accounts receivable, net

3,985

3,688

Contract assets

824

699

Inventories

686

613

Other current assets

531

405

Total Current Assets

6,839

6,501

Future income tax benefits

426

407

Fixed assets, net

755

743

Operating lease right-of-use assets

580

554

Intangible assets, net

387

343

Goodwill

1,794

1,695

Other assets

375

410

Total Assets

$              11,156

$              10,653

Liabilities and Equity (Deficit)

Short-term borrowings and current portion of long-term debt

$               1,390

$               1,056

Accounts payable

2,099

2,142

Accrued liabilities

1,713

1,847

Contract liabilities

3,023

2,611

Total Current Liabilities

8,225

7,656

Long-term debt

7,046

6,900

Future pension and postretirement benefit obligations

411

419

Operating lease liabilities

410

397

Future income tax obligations

196

223

Other long-term liabilities

322

329

Total Liabilities

16,610

15,924

Redeemable noncontrolling interest

106

75

Shareholders' Equity (Deficit):

Common Stock and additional paid-in capital

353

333

Treasury Stock

(5,005)

(4,198)

Accumulated deficit

(117)

(440)

Accumulated other comprehensive income (loss)

(979)

(1,087)

Total Shareholders' Equity (Deficit)

(5,748)

(5,392)

Noncontrolling interest

188

46

Total Equity (Deficit)

(5,560)

(5,346)

Total Liabilities and Equity (Deficit)

$              11,156

$              10,653

Otis Worldwide Corporation
Condensed Consolidated Statement of Cash Flows

Quarter Ended June 30,

Six Months Ended June 30,

(Unaudited)

(Unaudited)

(dollars in millions)

2026

2025

2026

2025

Operating Activities:

Net income from operations

$     449

$     423

$     802

$     679

Adjustments to reconcile net income to net cash flows provided by
operating activities:

Depreciation and amortization

42

44

83

86

Deferred income tax expense (benefit)

(42)

(74)

(38)

(74)

Stock compensation cost

20

23

39

44

Change in operating assets and liabilities, net of acquisitions:

Accounts receivable, net

(71)

(42)

(300)

(146)

Contract assets and liabilities, current

(148)

(190)

284

70

Inventories

(21)

3

(79)

(15)

Other current assets

(70)

12

67

10

Accounts payable

128

69

(48)

(212)

Accrued liabilities

49

11

(68)

23

Pension contributions

(10)

(9)

(21)

(27)

Other operating activities, net

(59)

(55)

(41)

(33)

Net cash flows provided by (used in) operating activities

267

215

680

405

Investing Activities:

Capital expenditures

(44)

(36)

(77)

(70)

Acquisitions of businesses and intangible assets, net of cash

(190)

(46)

(193)

(82)

Other investing activities, net

(97)

(77)

(46)

(168)

Net cash flows provided by (used in) investing activities

(331)

(159)

(316)

(320)

Financing Activities:

Increase (decrease) in short-term borrowings, net

(62)

484

(33)

473

Issuance of long-term debt, net

700

—

700

—

Payment of debt issuance costs

(5)

—

(5)

—

Repayment of long-term debt

—

(1,300)

(135)

(1,300)

Dividends paid on Common Stock

(167)

(164)

(330)

(319)

Repurchases of Common Stock

(407)

(308)

(807)

(561)

Acquisition of noncontrolling interest shares

—

—

(10)

—

Dividends paid to noncontrolling interest

(4)

(3)

(7)

(5)

Other financing activities, net

18

(3)

6

(10)

Net cash flows provided by (used in) financing activities

73

(1,294)

(621)

(1,722)

Summary of Activity:

Net cash provided by (used in) operating activities

267

215

680

405

Net cash provided by (used in) investing activities

(331)

(159)

(316)

(320)

Net cash provided by (used in) financing activities

73

(1,294)

(621)

(1,722)

Effect of exchange rate changes on cash and cash equivalents

(4)

12

1

19

Net increase (decrease) in cash, cash equivalents and restricted cash

5

(1,226)

(256)

(1,618)

Cash, cash equivalents and restricted cash, beginning of period

844

1,929

1,105

2,321

Cash, cash equivalents and restricted cash, end of period

849

703

849

703

Less: Restricted cash

36

15

36

15

Cash and cash equivalents, end of period

$     813

$     688

$     813

$     688

Otis Worldwide Corporation
Adjusted Free Cash Flow Reconciliation

Quarter Ended June 30,

Six Months Ended June 30,

(Unaudited)

(Unaudited)

(dollars in millions)

2026

2025

2026

2025

Net cash flows provided by operating activities (GAAP)

$       267

$       215

$       680

$       405

Capital expenditures

(44)

(36)

(77)

(70)

Free cash flow (Non-GAAP)

223

179

603

335

Adjustments for:

UpLift restructuring payments

6

8

14

19

UpLift transformation payments

7

14

11

33

Separation-related payments 1

57

72

63

72

German Tax Litigation refunds 2

(3)

(30)

(129)

(30)

Adjusted free cash flow (Non-GAAP)

$       290

$       243

$       562

$       429

1 These represent payments to RTX Corporation (our former parent) in accordance with the Tax Matters Agreement.

2 In August 2024, we received a favorable ruling regarding a tax litigation in Germany. The Company began receiving
refunds during 2025 and anticipates the refund process to continue through 2026.

Media Contact:
Katy Padgett
+1-860-674-3047
[email protected]

Investor Relations Contact:
Imelda Suit
+1-860-676-6011
[email protected]

SOURCE Otis Worldwide Corporation

Wall Street expects a year-over-year decline in earnings on higher revenues when Otis Worldwide (OTIS - Free Report) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 22. On the other hand, if they miss, the stock may move lower.

While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.

Zacks Consensus EstimateThis company is expected to post quarterly earnings of $1.00 per share in its upcoming report, which represents a year-over-year change of -4.8%.

Revenues are expected to be $3.72 billion, up 3.5% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 1.16% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Otis Worldwide?For Otis Worldwide, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -0.57%.

On the other hand, the stock currently carries a Zacks Rank of #4.

So, this combination makes it difficult to conclusively predict that Otis Worldwide will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Otis Worldwide would post earnings of $0.91 per share when it actually produced earnings of $0.89, delivering a surprise of -2.20%.

Over the last four quarters, the company has beaten consensus EPS estimates two times.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Otis Worldwide doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

, /PRNewswire/ -- Otis Worldwide Corporation (NYSE: OTIS) will host a conference call on Wednesday, July 22, 2026, at 8:30 a.m. ET. Otis Chair, CEO & President Judy Marks and Executive Vice President & CFO Cristina Mendez will discuss the company's second quarter results and 2026 outlook.

We encourage you to join through our webcast link. A corresponding presentation and news release will be available on www.otis.com prior to the call and a recording will be available on the website later in the day. If you are unable to join via the webcast, please contact Otis investor relations ([email protected]) for alternative dial-in information. Additional investor updates are also available on www.otis.com from time to time.

About Otis
Otis gives people freedom to connect and thrive in a taller, faster, smarter world. The global leader in the manufacture, installation, service and modernization of elevators and escalators, we move 2.5 billion people a day and maintain approximately 2.5 million customer units worldwide – the industry's largest Service portfolio. You'll find us in the world's most iconic structures, as well as residential and commercial buildings, transportation hubs and everywhere people are on the move. Headquartered in Connecticut, USA, Otis is 72,000 people strong, including 45,000 field professionals, all committed to manufacturing, installing and maintaining products to meet the diverse needs of our customers and passengers in more than 200 countries and territories. To learn more, visit www.otis.com and follow us on LinkedIn, YouTube, Instagram and Facebook @OtisElevatorCo.

Media Contact:
Katy Padgett
+1-860-674-3047
[email protected]

Investor Relations Contact:
Imelda Suit
+1-860-676-6011
[email protected]

SOURCE Otis Worldwide Corporation

We often encourage investors to think long-term, and to invest long-term, aiming to hang on to your stocks for many years, if not decades. It can be hard to think long-term, though, in this age of artificial intelligence (AI), and cloud computing, and cryptocurrencies. Everything seems to be changing so fast, it can seem hard to pinpoint businesses that are very likely to prosper for a long time.

There are some such companies, though, which should keep rewarding you until you retire -- and beyond. They're the kinds of companies that Warren Buffett would probably appreciate, as he has said that he likes to have a good idea of where the company will be in the years ahead. Here are three such companies to mull over.

Image source: Getty Images.

1. Berkshire Hathaway My first suggestion is Warren Buffett's company, Berkshire Hathaway (BRKA +0.33%) (BRKB +0.06%). It's in a new phase, as 95-year-old Buffett has stepped down and Greg Abel is the new CEO. Many expect Abel to follow in Buffett's footsteps, and he is already continuing Buffett's habit of repurchasing shares when they seem sufficiently undervalued.

I believe that Berkshire will be in good shape many years from now because it was intentionally built to last, and many of its dozens of subsidiaries are in sturdy industries -- such as transportation and energy. These businesses include GEICO, Benjamin Moore, Dairy Queen, McLane, and the entire BNSF railroad, along with sizable chunks of other companies, such as Apple, Chevron, American Express, Coca-Cola, and Bank of America. Thanks to many of Berkshire's stock holdings, it collects billions of dollars in dividend income annually.

With a recent forward-looking price-to-earnings (P/E) ratio of 21.6 a bit below the five-year average of 21.2, the stock seems slightly undervalued.

2. Otis Worldwide Next, consider Otis Worldwide (OTIS +0.76%), which is in a business that isn't likely to be replaced by AI. It has specialized in elevators since 1853, and it has grown to a recent market value of nearly $31 billion. It's a dividend-paying stock, too, recently yielding 2.2%, and its dividend payout has doubled over the past five years. This isn't a fast-growing company -- its last quarter featured net revenue up 3% year over year and adjusted earnings per share up 11% -- but it's one that can deliver a meaningful income stream now and into your retirement years.

Otis's business model doesn't just involve selling elevator systems -- it also updates them and services them, which results in considerable recurring income. (In its last quarter, maintenance and repair revenue was up 7% year over year.) Like Berkshire, Otis has also been buying back lots of shares, leading to a total yield for shareholders of 4.8%.

Otis's stock is looking appealingly priced, too, at recent levels, with a recent forward-looking price-to-earnings (P/E) ratio of 17.7, well below the five-year average of 23.3.

3. Waste Management In a similar vein, WM (WM +0.36%) -- the company formerly known as Waste Management -- is also likely to be delivering for shareholders decades from now. Changing times aren't likely to change our need for garbage collection and recycling services, and WM is America's largest solid waste services business.

WM has been growing at a good clip, averaging annual gains of nearly 14% over the past 15 years, and it's a solid dividend payer, as well. Its dividend yield was recently 1.45% -- and that payout has averaged annual increases of 10% over the past five years.

The stock seems a bit overvalued at recent levels, with a recent forward P/E ratio of 28.2, above the five-year average of 27.5. But that's not a huge premium, and this company is likely to reward shareholders for a long time.

If these companies don't interest you sufficiently, know that there are plenty of other compelling stocks out there, too.

Bank of America is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Selena Maranjian has positions in American Express, Apple, Berkshire Hathaway, and WM. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Chevron and is short shares of Apple. The Motley Fool recommends Otis Worldwide and WM. The Motley Fool has a disclosure policy.

Meets the readiness, scale and reliability demands of today's fast‑growing data center and infrastructure needs Engineered and ready now for facilities that require fast delivery of high capacity and durable elevators available with world-class Otis service, experience and expertise , /PRNewswire/ -- Otis Worldwide Corporation (NYSE: OTIS), the world leader in the manufacture, installation, service and modernization of elevators and escalators, today announced Otis Robust, a new heavy-duty elevator range engineered to meet the growing demand of multi-story data centers and other essential infrastructure, such as airports,  hospitals and industrial plants, that operate around the clock under demanding conditions.

Otis Robust elevators are designed for demanding infrastructure supporting heavy loads, frequent use and continuous operation, with up to five times the weight capacity and two times wider door openings than standard passenger elevators. The global demand for larger and more advanced facilities and infrastructure is expanding at an unprecedented rate across sectors, with the global data center pipeline alone exceeding $2.5 trillion* in anticipated investment. Advances in cloud computing and artificial intelligence (AI) are fueling this expansion, driving rapid growth in multi-story data center capacity worldwide. As these facilities scale, with strong market momentum in the United States and Canada and substantial growth potential across Asia and Europe, the Middle East and Africa (EMEA), they must be built and brought online faster, placing new demands on the performance, durability and safety of the infrastructure they support.

"As construction and investment for data centers and other infrastructure accelerates, customers are looking for partners like Otis who can move at pace without compromising on safety and reliability," said Judy Marks, Chair, CEO, and President of Otis. "The Robust elevator range reflects how we are ready to serve these fast-growing sectors, bringing ready-now, heavy-duty solutions to market that are purpose-built for high-intensity environments. By combining industrial grade engineering with our global scale and service expertise, we're helping customers build and deploy facilities faster and operate them with confidence over the long term."

Whether for individual installations or multi-site major projects, Otis leverages its global manufacturing and supply chain network, proven processes and dedicated teams of experts to provide end-to-end support that helps streamline decision making and accelerate every step—from bidding through commissioning—while maintaining consistency and quality.

Otis Robust elevators are designed for demanding infrastructure supporting heavy loads, frequent use and continuous operation, with up to five times the weight capacity and two times wider door openings than standard passenger elevators. They help customers reduce operational risk, protect valuable equipment, and maintain performance time around the clock. Combined with an Otis service plan and the Otis ONE™ IoT predictive maintenance solution, customers should benefit from high service quality and extended performance. They can also easily modernize and upgrade their equipment to scale operations and protect long-term investments as facility needs change over time.

To learn more about the range of Otis Robust heavy-duty elevators and the company's commitment to supporting the rapid development of critical infrastructure, visit www.otis.com/en/us/products/otis-robust.

Q&A

What distinguishes the Otis Robust heavy-duty elevators from other elevator solutions currently available?

The Otis Robust heavy-duty elevators are engineered for multi-story data centers and other critical infrastructure that require accelerated installation of high-capacity, dependable, and continuously operating elevators.

How does Otis move fast from bid to commissioning?

Otis leverages its global manufacturing and supply chain network, proven processes, and dedicated expert teams. Whether it's a single or multiple site deployment, its end-to-end support helps streamline decision making and accelerate every step—from bidding through commissioning—while maintaining consistency and quality.

Why has Otis launched a dedicated elevator range for data centers and mission-critical facilities now?

We are seeing unprecedented expansion across mission-critical infrastructure. Advances in cloud computing and artificial intelligence (AI) are fueling this expansion, driving rapid growth in data center capacity. The global data center pipeline alone now exceeds $2.5 trillion*, and these facilities are becoming larger, more complex and more demanding. Elevators are essential to keeping these dynamic environments running continuously. The Otis Robust elevators were engineered to meet this reality, with reliability and performance designed from the outset.

What problems are customers in data centers and other critical facilities facing today?

Customers tell us that swift delivery, performance and reliability are their top priorities, whether they are moving heavy equipment, regularly moving large numbers of passengers or striving to maintain maximum up time in 24/7 environments. With up to five times the weight capacity and two times wider door openings than standard passenger elevators, Otis Robust elevators are purpose built for heavy loads, frequent use and continuous operation, helping customers reduce operational risk and protect critical operations.

How does Otis Robust support the rapid evolution of data centers' needs?

Otis Robust elevators are purpose built for heavy loads, frequent use and continuous operation and designed for easy modernization and upgrades, allowing customers to adapt their systems as their operational needs change.

About Otis
Otis gives people freedom to connect and thrive in a taller, faster, smarter world. The global leader in the manufacture, installation, service and modernization of elevators and escalators, we move 2.5 billion people a day and maintain approximately 2.5 million customer units worldwide – the industry's largest Service portfolio. You'll find us in the world's most iconic structures, as well as residential and commercial buildings, transportation hubs and everywhere people are on the move. Headquartered in Connecticut, USA, Otis is 72,000 people strong, including 45,000 field professionals, all committed to manufacturing, installing and maintaining products to meet the diverse needs of our customers and passengers in more than 200 countries and territories. To learn more, visit www.otis.com and follow us on LinkedIn, YouTube, Instagram and Facebook @OtisElevatorCo.

*Source: Q1-2026 Global Insights report on data centers issued by GlobalData

Media Contact:
Katy Padgett
Phone: +1-860-674-3047
Email: [email protected]

SOURCE Otis Worldwide Corporation

Key Takeaways Otis Q1 EPS estimate cut to $0.92 from $0.95 in 30 days; sales seen at $3.51B, up 4.7% YoY.OTIS Service segment drives growth via maintenance, repair and modernization, with repair nearing 10% growth.OTIS Service segment drives growth via maintenance, repair and modernization, with repair nearing 10% growth. Otis Worldwide Corporation (OTIS - Free Report) is scheduled to report first-quarter 2026 results on April 22, 2026, before the opening bell.

In the last reported quarter, the company’s adjusted earnings came in line with the Zacks Consensus Estimate, but net sales missed the same. Meanwhile, on a year-over-year basis, both top and bottom lines grew 3.3% and 10.8%, respectively.

OTIS’ earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 2.3%.

Trend in Otis’ Estimate RevisionFor the quarter to be reported, the Zacks Consensus Estimate for adjusted earnings per share (EPS) has trended downward to 92 cents from 95 cents in the past 30 days. The estimated figure remains flat year over year.

The consensus mark for net sales is pegged at $3.51 billion, indicating 4.7% growth from the year-ago figure of $3.35 billion.

Key Factors to Note for OTIS’ Q1 EarningsNet SalesOtis’ first-quarter net sales are likely to have increased year over year, supported by robust operational growth in the Service segment (which contributed 65.4% of 2025 net sales). Service organic sales growth is expected to have been supported by solid execution in maintenance and repair, along with steady modernization activity backed by a strong backlog. Repair activity is likely to have shown acceleration, with management expecting growth to move toward 10% or higher, supported by rising demand linked to an aging installed base and improving execution in the field.

Modernization revenues are also expected to have contributed, driven by backlog conversion and sustained demand trends across regions. However, the pace of conversion might vary due to project timing and execution cycles, particularly in larger or multi-year projects.

In contrast, New Equipment sales (which contributed 34.6% of 2025 net sales) are expected to have remained under pressure. The segment is likely to have declined year over year, broadly in line with recent trends, as continued weakness in China offsets growth across other regions. While orders and backlog trends outside China remain supportive, lower volumes and pricing pressure in China are expected to have weighed on overall performance.

Overall, sales growth is expected to have remained modest, with service-driven expansion partially offset by continued softness in New Equipment.

For the first quarter, our model predicts the Service segment’s net sales to increase year over year by 10.2% to $2.41 billion, with the New Equipment segment’s net sales declining 5% to $1.1 billion.

MarginsOn the margin front, service mix is expected to have remained as a key support. Higher service volumes, pricing actions and productivity initiatives are likely to have supported margins, even as continued investments in service excellence and field resources limit near-term expansion.

Repair growth is expected to have supported profitability given its higher-margin nature, while modernization margins have been improving with scale. The mix between repair and modernization might have influenced overall margin performance in the quarter.

New Equipment margins are expected to have remained a headwind due to lower volumes, pricing pressure in China and tariff impacts, with only partial support from productivity and restructuring benefits.

Overall, earnings are expected to remain broadly flat year over year, reflecting steady service-driven support offset by continued pressure in New Equipment and ongoing investments.

We expect the adjusted operating margin in the New Equipment segment to decrease year over year to 5.1% from 5.7%, while the same for the Service segment is anticipated to grow 100 basis points to 25.6%.

Our model predicts adjusted EBITDA during the quarter to be up year over year by 0.8% to $606.5 million, with the adjusted EBITDA margin to contract 70 bps to 17.8%.

What Our Model Unveils for OTISOur proven model does not predict an earnings beat for Otis this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

OTIS’ Earnings ESP: OTIS has an Earnings ESP of -1.01%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank of Otis: Currently, the company carries a Zacks Rank of 3.

Stocks With the Favorable CombinationHere are some stocks from the Zacks Industrial Products sector, which, per our model, have the right combination of elements to deliver an earnings beat this time around.

ATS Corporation (ATS - Free Report) currently has an Earnings ESP of +1.05% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 9.7%. In the to-be-reported quarter, ATS Corporation’s earnings are expected to register a 14.3% year-over-year increase.

Deere & Company (DE - Free Report) currently has an Earnings ESP of +6.24% and a Zacks Rank of 3.

The company’s earnings beat estimates in three of the last four quarters and missed on the remaining one occasion, the average surprise being 11.3%. In the to-be-reported quarter, Deere’s earnings are expected to register a 12.7% year-over-year decrease.

Kennametal (KMT - Free Report) currently has an Earnings ESP of +5.88% and a Zacks Rank of 1.

The company’s earnings beat estimates in three of the last four quarters and missed on the remaining one occasion, the average surprise being 35.4%. In the to-be-reported quarter, Kennametal’s earnings are expected to register a 44.7% year-over-year increase.

Otis delivers net sales growth of 6%, driven by Service with growth in all lines of business, led by repair

Net sales up 6% and organic sales up 1%, driven by Service net sales up 11% with organic sales up 5% Repair net sales up 16% with organic repair sales up approximately 10% Modernization orders up 11% at constant currency, backlog up 32%, 30% at constant currency New Equipment orders up 1% at constant currency, backlog up 6%, 3% at constant currency Operating cash flow of $413 million; adjusted free cash flow of $272 million Share repurchases of approximately $400 million , /PRNewswire/ -- Otis Worldwide Corporation (NYSE:OTIS) reported first quarter 2026 net sales of $3.6 billion with organic sales up 1% versus the prior year. GAAP earnings per share (EPS) increased 43% to $0.87 and adjusted EPS decreased 3% to $0.89.

"Otis delivered a solid quarter, with net sales up 6%. All Service lines of business grew, led by repair which grew 16% at actual currency and 10% organically. Orders and backlog strengthened: modernization orders were up 11% and backlog was up 30% at constant currency. New Equipment orders grew 1% and backlog grew 3% at constant currency. Otis delivered operating cash flow of $413 million and adjusted free cash flow of $272 million, up significantly from a year ago," said Chair, CEO & President Judy Marks. "This performance allowed Otis to repurchase approximately $400 million of shares while also announcing an exciting majority investment in WeMaintain, a digitally native and AI enabled elevator service provider." 

Judy Marks continued, "While underlying demand remains solid as reflected in our order activity, we faced near‑term pressures, reflected in our Service margins, from cost headwinds and investments in growth. We are taking decisive actions focused on operational execution, pricing, and cost efficiency to address these pressures, while continuing our disciplined capital allocation to drive long‑term shareholder value. The combination of our increasing backlog, pricing actions, and disciplined execution give us confidence in growing momentum into the second quarter and remainder of the year."

Key Figures

Quarter Ended March 31,

(dollars in millions, except per share amounts)

2026

2025

Y/Y

Y/Y (CFX)

Net sales

$  3,566

$ 3,350

6 %

1 %

Organic sales growth

1 %

GAAP

Operating profit

$    539

$    411

$    128

Operating profit margin

15.1 %

12.3 %

280 bps

Net income

$    340

$    243

40 %

Earnings per share

$   0.87

$   0.61

43 %

Adjusted non-GAAP comparison

Operating profit

$    550

$    560

$    (10)

$   (38)

Operating profit margin

15.4 %

16.7 %

(130) bps

Net income

$    347

$    368

(6) %

Earnings per share

$   0.89

$   0.92

(3) %

First quarter net sales of $3.6 billion increased 6% versus the prior year, driven primarily by Service sales with growth in all lines of business, partially offset by a decrease in New Equipment sales in China and Asia Pacific.

First quarter GAAP operating profit of $539 million increased $128 million driven primarily by a favorable comparison due to UpLift transformation costs, separation-related adjustments, and other non-recurring items in the prior year. Adjusted operating profit of $550 million decreased $10 million at actual currency and $38 million at constant currency, driven by declines in both segments. GAAP operating profit margin expanded 280 basis points to 15.1% and adjusted operating profit margin of 15.4% declined 130 basis points versus the prior year driven by unfavorable segment performance partially offset by segment mix. The performance was impacted by an unfavorable year‑over‑year comparison due to tariff impacts versus the prior year, continued Service investments that began in the second quarter of last year and accelerated this year to support strong repair and modernization order momentum, and shipment delays in New Equipment and modernization related to the geopolitical situation in the Middle East.

GAAP EPS of $0.87 increased 43% compared to the prior year primarily driven by a favorable comparison due to UpLift transformation costs, separation-related adjustments, and other non-recurring items in the prior year. Adjusted EPS of $0.89 decreased 3% driven by operational performance, higher interest, and higher taxes, partially offset by favorable foreign exchange rates and a lower share count.

Service

Quarter Ended March 31,

(dollars in millions)

2026

2025

Y/Y

Y/Y (CFX)

Net sales

$           2,417

$           2,187

11 %

6 %

Organic sales

5 %

Segment operating profit

$              556

$              537

$              19

$            (10)

Segment operating profit margin

23.0 %

24.6 %

(160) bps

In the first quarter, net sales of $2.4 billion increased 11%, with a 5% increase in organic sales. Organic maintenance and repair sales increased 4% and organic modernization sales increased 6%.

Segment operating profit of $556 million increased $19 million at actual currency and decreased $10 million at constant currency due to higher volume and favorable pricing being more than offset by higher labor and material cost, investments, and mix. Segment operating profit margin contracted 160 basis points to 23.0%.

New Equipment

Quarter Ended March 31,

(dollars in millions)

2026

2025

Y/Y

Y/Y (CFX)

Net sales

$           1,149

$           1,163

(1) %

(5) %

Organic sales

(5) %

Segment operating profit

$                38

$                66

$            (28)

$            (27)

Segment operating profit margin

3.3 %

5.7 %

(240) bps

In the first quarter, net sales of $1.1 billion decreased 1% versus the prior year, with low single digit organic sales growth in EMEA more than offset by a greater than 20% decline in China, a mid-single digit decline in Asia Pacific, and a low single digit decline in the Americas.

Segment operating profit of $38 million decreased $28 million at actual currency and $27 million at constant currency from the impacts of lower volume, unfavorable price, and mix, partially offset by productivity. Segment operating profit margin contracted 240 basis points to 3.3%.

New Equipment orders were up 1% at constant currency with a greater than 20% growth in the Americas, and a low single digit growth in EMEA, partially offset by a greater than 20% decline in Asia Pacific, and a low teens decline in China. New Equipment backlog increased 6% at actual currency and 3% at constant currency.

Cash flow

Quarter Ended March 31,

(dollars in millions)

2026

2025

Y/Y

Cash flow from operations

$        413

$        190

$       223

Free cash flow

$        380

$        156

$       224

Adjusted free cash flow

$        272

$        186

$         86

First quarter cash flow changes were driven by an increase in net income and changes in working capital.

2026 Outlook1
Otis is revising our full year outlook:

Net sales of $15.1 to $15.3 billion Organic sales up low to mid-single digits Organic New Equipment sales down low single digits to flat Organic Service sales up mid to high single digits Adjusted operating profit of approximately $2.5 billion, up $20 to $60 million at constant currency; up $60 to $100 million at actual currency Adjusted EPS of $4.20 to $4.24 Adjusted free cash flow of $1.60 to 1.65 billion 1 Note: When we provide outlook for organic sales, adjusted operating profit, adjusted EPS, adjusted effective tax rate and adjusted free cash flow on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and the corresponding GAAP measures generally is not available without unreasonable effort. See "Use and Definitions of Non-GAAP Financial Measures" below for additional information.

About Otis
Otis is the world's leading elevator and escalator manufacturing, installation, service and modernization company. We move 2.5 billion people a day and maintain approximately 2.5 million customer units worldwide, the industry's largest Service portfolio. Headquartered in Connecticut, USA, Otis is 72,000 people strong, including 45,000 field professionals, all committed to manufacturing, installing and maintaining products to meet the diverse needs of our customers and passengers in more than 200 countries and territories worldwide. For more information, visit www.otis.com and follow us on LinkedIn, YouTube, Instagram and Facebook @OtisElevatorCo.

Use and Definitions of Non-GAAP Financial Measures
Otis Worldwide Corporation ("Otis") reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). We supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial information. The non-GAAP information presented provides investors with additional useful information, but should not be considered in isolation or as substitutes for the related GAAP measures. Moreover, other companies may define non-GAAP measures differently, which limits the usefulness of these measures for comparisons with such other companies. We encourage investors to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. A reconciliation of the non-GAAP measures (referenced in this press release) to the corresponding amounts prepared in accordance with GAAP appears in the attached tables. These tables provide additional information as to the items and amounts that have been excluded from the adjusted measures. Below are our non-GAAP financial measures:

Non-GAAP measure

Definition

Organic sales

Represents consolidated net sales (a GAAP measure), excluding the impact of foreign currency translation, acquisitions and divestitures completed in the preceding twelve months and other significant items of a non-recurring and/or nonoperational nature ("other significant items"). Management believes organic sales is a useful measure in providing period-to-period comparisons of the results of the Company's ongoing operational performance.

Adjusted selling, general and

administrative ("SG&A") expense

Represents SG&A expense (a GAAP measure), excluding restructuring costs and other significant items.

Adjusted operating profit

Represents income from continuing operations (a GAAP measure), excluding restructuring costs and other significant items.

Adjusted net interest expense

Represents net interest expense (a GAAP measure), adjusted for the impacts of non-recurring acquisition related financing costs and related net interest expense pending the completion of a transaction and other significant items.

Adjusted noncontrolling interest in

earnings

Represents noncontrolling interest in earnings (a GAAP measure), excluding restructuring costs and other significant items, including related tax effects.

Adjusted net income

Represents net income attributable to Otis Worldwide Corporation (a GAAP measure), excluding restructuring costs and other significant items, including related tax effects.

Adjusted earnings per share ("EPS")

Represents diluted earnings per share attributable to common shareholders (a GAAP measure), adjusted for the per share impact of restructuring and other significant items, including related tax effects.

Adjusted effective tax rate

Represents the effective tax rate (a GAAP measure) adjusted for other significant items and the tax impact of restructuring costs and other significant items.

Constant currency

GAAP financial results include the impact of changes in foreign currency exchange rates ("AFX"). We use the non-GAAP measure "at constant currency" or "CFX" to show changes in our financial results without giving effect to period-to-period currency fluctuations. Under U.S. GAAP, income statement results are translated in U.S. dollars at the average exchange rate for the period presented. Management believes that this non-GAAP measure is useful in providing period-to-period comparisons of the results of the Company's ongoing operational performance.

Free cash flow

Represents cash flow from operations (a GAAP measure) less capital expenditures. Management believes free cash flow is a useful measure of liquidity and an additional basis for assessing Otis' ability to fund its activities, including the financing of acquisitions, debt service, repurchases of common stock and distribution of earnings to shareholders. Free cash flow should not be considered an alternative to, or more meaningful than, net cash flows provided by operating activities, or any other measure of liquidity presented in accordance with GAAP.

Adjusted free cash flow

Represents cash flow from operations (a GAAP measure) less capital expenditures, adjusted to exclude certain items management believes affect the comparability of operating results. Management believes adjusted free cash flow is a useful measure of liquidity that provides investors additional information regarding the Company's ability to fund its activities, including the financing of acquisitions, debt service, repurchases of common stock and distribution of earnings to shareholders. Adjusted free cash flow should not be considered an alternative to, or more meaningful than, net cash flows provided by operating activities, or any other measure of liquidity presented in accordance with GAAP.

Management believes that organic sales, adjusted SG&A expense, adjusted operating profit, adjusted net interest expense, adjusted noncontrolling interest in earnings, adjusted net income, adjusted EPS and the adjusted effective tax rate are useful measures in providing period-to-period comparisons of the results of the Company's ongoing operational performance.

When we provide our expectations for adjusted net sales, organic sales, adjusted operating profit, adjusted net interest expense, adjusted noncontrolling interest in earnings, adjusted net income, adjusted effective tax rate, adjusted EPS, free cash flow and adjusted free cash flow on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and the corresponding GAAP measures (expected diluted EPS from continuing operations, operating profit, the effective tax rate, net sales and expected cash flow from operations) generally is not available without unreasonable effort due to potentially high variability, complexity and low visibility as to the items that would be excluded from the GAAP measure in the relevant future period, such as unusual gains and losses, the ultimate outcome of pending litigation, fluctuations in foreign currency exchange rates, the impact and timing of potential acquisitions and divestitures, and other structural changes or their probable significance. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results.

Cautionary Statement
This communication contains statements which, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws. From time to time, oral or written forward-looking statements may also be included in other information released to the public. These forward-looking statements are intended to provide management's current expectations or plans for Otis' future operating and financial performance, based on assumptions currently believed to be valid. Forward-looking statements can be identified by the use of words such as "believe," "expect," "expectations," "plans," "strategy," "prospects," "estimate," "project," "target," "anticipate," "will," "should," "see," "guidance," "outlook," "medium-term," "near-term," "confident," "goals" and other words of similar meaning in connection with a discussion of future operating or financial performance. Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash flow, results of operations, uses of cash, dividends, share repurchases, tax rates, research & development spend, restructuring or transformation actions (including UpLift and related reorganization and outsourcing activities and such actions with respect to our business in China), credit ratings, net indebtedness and other measures of financial performance or potential future plans, strategies or transactions, or statements that relate to climate change and our intent to achieve certain sustainability targets or other corporate responsibility initiatives, including operational impacts and costs associated therewith, and other statements that are not historical facts. All forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. For those statements, Otis claims the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995. Such risks, uncertainties and other factors include, without limitation: (1) the effect of economic conditions in the industries and markets in which Otis and its businesses operate and any changes therein, including financial market conditions, fluctuations in commodity prices and other inflationary pressures, interest rates and foreign currency exchange rates, levels of end market demand in construction, pandemic health issues, natural disasters, whether as a result of climate change or otherwise, and the financial condition of Otis' customers and suppliers; (2) the effect of changes in political conditions in the U.S. and in other countries in which Otis and its businesses operate, including tensions between the U.S. and China and geopolitical conflicts, including the ongoing conflicts and instability in the Middle East and the conflict between Russia and Ukraine on general market conditions, commodity costs, global trade policies and related sanctions, export controls and tariffs, and currency exchange rates in the near term and beyond; (3) challenges in the development, production, delivery, support, employee adoption, performance and realization of the anticipated benefits of advanced technologies and new products and services; (4) future levels of indebtedness, capital spending and research and development spending; (5) future availability of credit and factors that may affect such availability or costs thereof, including credit market conditions and Otis' capital structure; (6) the timing and scope of future repurchases of Otis' common stock, which may be suspended at any time due to various factors, including market conditions and the level of other investing activities and uses of cash; (7) fluctuations in prices and delays and disruptions in delivery of materials and services from suppliers, whether as a result of changes in general economic conditions, geopolitical conflicts or otherwise; (8) cost reduction or containment actions, restructuring or transformation costs and related savings and other consequences thereof, including with respect to UpLift and our China business and related impacts of reorganization, change management and outsourcing activities, as applicable; (9) new business and investment opportunities and the realization of anticipated benefits, including meeting customer expectations and maintaining our competitiveness; (10) the outcome of legal proceedings, investigations and other contingencies; (11) pension plan assumptions and future contributions; (12) the impact of the negotiation of collective bargaining agreements and labor disputes, labor actions, including strikes or work stoppages, and labor inflation in the markets in which Otis and its businesses operate globally; (13) the effect of changes in laws, regulations and enforcement priorities in the U.S. and other countries in which Otis and its businesses operate; (14) the ability of Otis to retain and hire key personnel; (15) the scope, nature, impact or timing of acquisition and divestiture activity, the integration of acquired businesses into existing businesses and realization of synergies and opportunities for growth and innovation and incurrence of related costs; (16) the determination by the Internal Revenue Service (the "IRS") and other tax authorities that the distribution or certain related transactions should be treated as taxable transactions in connection with the separation (the "Separation") of Otis and Carrier Global Corporation ("Carrier") from United Technologies Corporation (now known as RTX Corporation ("RTX"); and (17) our obligations and disputes that have or may hereafter arise under the agreements we entered into with RTX and Carrier in connection with the Separation. The above list of factors is not exhaustive or necessarily in order of importance. For additional information on identifying factors that may cause actual results to vary from those stated in forward-looking statements, see Otis' registration statement on Form 10 and the reports of Otis on Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC from time to time. Any forward-looking statement speaks only as of the date on which it is made, and Otis assumes no obligation to update or revise such statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Otis Worldwide Corporation

Condensed Consolidated Statements of Operations

Quarter Ended March 31,

(Unaudited)

(dollars in millions, except per share amounts; shares in millions)                                                       

2026

2025

Net Sales

$        3,566

$        3,350

Costs and Expenses:

Cost of products and services sold

2,484

2,349

Research and development

38

37

Selling, general and administrative

510

464

Total Costs and Expenses

3,032

2,850

Other income (expense), net

5

(89)

Operating profit

539

411

Non-service pension cost (benefit)

—

—

Interest expense (income), net

59

45

Net income before income taxes

480

366

Income tax expense (benefit)

127

110

Net income

353

256

Less: Noncontrolling interest in subsidiaries' earnings

13

13

Net income attributable to Otis Worldwide Corporation

$          340

$          243

Earnings Per Share of Common Stock:

Basic

$         0.88

$         0.61

Diluted

$         0.87

$         0.61

Weighted Average Number of Shares Outstanding:

Basic shares

388.1

396.6

Diluted Shares

389.6

399.1

Otis Worldwide Corporation

Reconciliation of Reported (GAAP) to Adjusted Operating Profit & Operating Profit Margin

Quarter Ended March 31,

(Unaudited)

(dollars in millions)

2026

2025

Net Sales

New Equipment

$      1,149

$      1,163

Service

2,417

2,187

Total Net Sales

$      3,566

$      3,350

Operating Profit

New Equipment

$         38

$         66

Service

556

537

Total segment operating profit

594

603

Corporate and Unallocated

(55)

(192)

Total Otis GAAP Operating Profit

539

411

UpLift restructuring

—

20

Other restructuring

7

23

UpLift transformation costs

—

23

Separation-related adjustments 1

5

52

Litigation-related settlement costs 2

—

21

Held for sale impairment

—

10

Other, net

(1)

—

Total Otis Adjusted Operating Profit

$        550

$        560

Reported Total Operating Profit Margin                                                                                                       

15.1 %

12.3 %

Adjusted Total Operating Profit Margin

15.4 %

16.7 %

1 Separation-related adjustments in the quarters ended March 31, 2026 and 2025 represent estimated amounts due to RTX Corporation

(our former parent) in accordance with the Tax Matters Agreement, including those amounts related to a favorable ruling received in

August 2024 regarding a tax litigation in Germany.

2 Litigation-related settlement costs in the quarter ended March 31, 2025 represent the aggregate amount of settlement costs and

increase in loss contingency accruals, excluding legal costs, for certain legal matters that are outside of the ordinary course of business

due to the size, complexity and/or unique facts of these matters.

Otis Worldwide Corporation

Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Net Income, Earnings Per Share, and Effective Tax Rate 

Quarter Ended March 31,

(Unaudited)

(dollars in millions, except per share amounts)

2026

2025

Adjusted Operating Profit

$        550

$        560

Adjusted net interest expense 1

59

46

Adjusted income from operations before income taxes

491

514

Income tax expense (benefit)

127

110

Tax impact on restructuring and non-recurring items

4

21

Adjusted net income from operations

360

383

Adjusted noncontrolling interest 2

13

15

Adjusted net income attributable to common shareholders

$        347

$        368

GAAP net income attributable to common shareholders

$        340

$       243

UpLift restructuring

—

20

Other restructuring

7

23

UpLift transformation costs

—

23

Separation-related adjustments

5

52

Litigation-related settlement costs

—

21

Held for sale impairment

—

10

Interest income related to non-recurring tax items 1

—

(1)

Tax effects of restructuring, non-recurring items and other adjustments

(4)

(21)

Other, net 2

(1)

(2)

Adjusted net income attributable to common shareholders                                                                 

$        347

$        368

Diluted Earnings Per Share

$       0.87

$       0.61

Impact to diluted earnings per share

0.02

0.31

Adjusted Earnings Per Share

$       0.89

$       0.92

Effective Tax Rate

26.5 %

30.1 %

Impact of adjustments on effective tax rate

0.2 %

(4.5) %

Adjusted Effective Tax Rate

26.7 %

25.6 %

1 In August 2024, we received a favorable ruling regarding a tax litigation in Germany. As a result, income tax benefits and related interest

income were recorded in 2024. Net interest expense is reflected as adjusted without $1 million of interest income for quarter ended March

31, 2025.

2 Noncontrolling interest is reflected as adjusted without $2 million of the noncontrolling interest share of Other restructuring for the quarter

ended March 31, 2025.

Otis Worldwide Corporation

Components of Changes in Net Sales

Quarter Ended March 31, 2026 Compared with Quarter Ended March 31, 2025

Factors Contributing to Total % Change in Net Sales

Organic

FX

Translation

Acquisitions /

Divestitures,

net and Other

Total

New Equipment

(5) %

4 %

— %

(1) %

Service

5 %

5 %

1 %

11 %

Maintenance and Repair

4 %

5 %

2 %

11 %

Modernization

6 %

3 %

1 %

10 %

Total Net Sales

1 %

5 %

— %

6 %

Components of Changes in New Equipment Backlog

March 31, 2026

Y/Y Growth %

New Equipment Backlog increase at actual currency

6 %

Foreign exchange impact to New Equipment Backlog

(3) %

New Equipment Backlog increase at constant currency

3 %

Components of Changes in Modernization Backlog

March 31, 2026

Y/Y Growth %

Modernization Backlog increase at actual currency

32 %

Foreign exchange impact to Modernization Backlog

(2) %

Modernization Backlog increase at constant currency

30 %

Otis Worldwide Corporation

Reconciliation of Segment and Total Adjusted Operating Profit at Constant Currency

Quarter Ended March 31, 2026 Compared with Quarter Ended March 31, 2025

(dollars in millions)

2026

2025

Y/Y

New Equipment

Segment Operating Profit

$               38

$               66

$              (28)

Impact of foreign exchange

1

—

1

Segment Operating Profit at constant currency                    

$               39

$               66

$              (27)

Service

Segment Operating Profit

$              556

$              537

$               19

Impact of foreign exchange

(29)

—

(29)

Segment Operating Profit at constant currency

$              527

$              537

$              (10)

Otis Consolidated

Adjusted Operating Profit

$              550

$              560

$              (10)

Impact of foreign exchange

(28)

—

(28)

Adjusted Operating Profit at constant currency

$              522

$              560

$              (38)

Otis Worldwide Corporation

Condensed Consolidated Balance Sheet

March 31, 2026

December 31, 2025

(dollars in millions)

(Unaudited)

Assets

Cash and cash equivalents

$                  834

$                1,096

Accounts receivable, net

3,920

3,688

Contract assets

751

699

Inventories

669

613

Other current assets

290

405

Total Current Assets

6,464

6,501

Future income tax benefits

400

407

Fixed assets, net

744

743

Operating lease right-of-use assets

552

554

Intangible assets, net

333

343

Goodwill

1,682

1,695

Other assets

367

410

Total Assets

$              10,542

$              10,653

Liabilities and Equity (Deficit)

Short-term borrowings and current portion of long-term debt           

$                   939

$                1,056

Accounts payable

1,975

2,142

Accrued liabilities

1,710

1,847

Contract liabilities

3,100

2,611

Total Current Liabilities

7,724

7,656

Long-term debt

6,879

6,900

Future pension and postretirement benefit obligations

416

419

Operating lease liabilities

400

397

Future income tax obligations

225

223

Other long-term liabilities

333

329

Total Liabilities

15,977

15,924

Redeemable noncontrolling interest

74

75

Shareholders' Equity (Deficit):

Common Stock and additional paid-in capital

332

333

Treasury Stock

(4,601)

(4,198)

Accumulated deficit

(378)

(440)

Accumulated other comprehensive income (loss)

(1,033)

(1,087)

Total Shareholders' Equity (Deficit)

(5,680)

(5,392)

Noncontrolling interest

171

46

Total Equity (Deficit)

(5,509)

(5,346)

Total Liabilities and Equity (Deficit)

$              10,542

$              10,653

Otis Worldwide Corporation

Condensed Consolidated Statement of Cash Flows

Quarter Ended

March 31,

(Unaudited)

(dollars in millions)

2026

2025

Operating Activities:

Net income from operations

$     353

$     256

Adjustments to reconcile net income to net cash flows provided by operating activities:

Depreciation and amortization

41

42

Deferred income tax expense (benefit)

4

—

Stock compensation cost

19

21

Change in:

Accounts receivable, net

(229)

(104)

Contract assets and liabilities, current

432

260

Inventories

(58)

(18)

Other current assets

137

(2)

Accounts payable

(176)

(281)

Accrued liabilities

(117)

12

Pension contributions

(11)

(18)

Other operating activities, net

18

22

Net cash flows provided by (used in) operating activities

413

190

Investing Activities:

Capital expenditures

(33)

(34)

Acquisitions of businesses and intangible assets, net of cash

(3)

(36)

Other investing activities, net

51

(91)

Net cash flows provided by (used in) investing activities

15

(161)

Financing Activities:

Increase (decrease) in short-term borrowings, net

29

(11)

Repayment of long-term debt

(135)

—

Dividends paid on Common Stock

(163)

(155)

Repurchases of Common Stock

(400)

(253)

Dividends paid to noncontrolling interest

(3)

(2)

Acquisition of noncontrolling interest shares

(10)

—

Other financing activities, net

(12)

(7)

Net cash flows provided by (used in) financing activities

(694)

(428)

Summary of Activity:

Net cash provided by (used in) operating activities

413

190

Net cash provided by (used in) investing activities

15

(161)

Net cash provided by (used in) financing activities

(694)

(428)

Effect of exchange rate changes on cash and cash equivalents

5

7

Net increase (decrease) in cash, cash equivalents and restricted cash

(261)

(392)

Cash, cash equivalents and restricted cash, beginning of period

1,105

2,321

Cash, cash equivalents and restricted cash, end of period

844

1,929

Less: Restricted cash

10

11

Cash and cash equivalents, end of period

$     834

$   1,918

Otis Worldwide Corporation

Adjusted Free Cash Flow Reconciliation

Quarter Ended March 31,

(Unaudited)

(dollars in millions)

2026

2025

Net cash flows provided by operating activities (GAAP)                                             

$       413

$       190

Capital expenditures

(33)

(34)

Free cash flow (Non-GAAP)

380

156

Adjustments for:

UpLift restructuring payments

8

11

UpLift transformation payments

4

19

Separation-related payments 1

6

—

German Tax Litigation refunds 2

(126)

—

Adjusted free cash flow (Non-GAAP)

$       272

$       186

1 These represent payments to RTX Corporation (our former parent) in accordance with the Tax Matters Agreement.

2 In August 2024, we received a favorable ruling regarding a tax litigation in Germany. The Company has started to

receive refunds and anticipates the refund process to continue through 2026.

SOURCE Otis Worldwide Corporation

Otis Worldwide (OTIS - Free Report) reported $3.57 billion in revenue for the quarter ended March 2026, representing a year-over-year increase of 6.5%. EPS of $0.89 for the same period compares to $0.92 a year ago.

The reported revenue compares to the Zacks Consensus Estimate of $3.5 billion, representing a surprise of +1.99%. The company delivered an EPS surprise of -2%, with the consensus EPS estimate being $0.91.

While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.

As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.

Here is how Otis Worldwide performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

Net Sales- Service: $2.42 billion versus the three-analyst average estimate of $2.38 billion. The reported number represents a year-over-year change of +10.5%.Net Sales- New Equipment: $1.15 billion versus $1.1 billion estimated by three analysts on average. Compared to the year-ago quarter, this number represents a -1.2% change.Segment Operating Profit- New Equipment: $38 million compared to the $41.09 million average estimate based on three analysts.Segment Operating Profit- Service: $556 million versus $586.18 million estimated by three analysts on average.Operating Profit- General corporate expenses and other: $-55 million versus $-91.1 million estimated by two analysts on average.View all Key Company Metrics for Otis Worldwide here>>>

Shares of Otis Worldwide have returned +1.1% over the past month versus the Zacks S&P 500 composite's +8.6% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term.

Key Takeaways Otis Worldwide's Q1 Service grew broadly, led by repairs, while modernization orders and backlog improved.Otis Worldwide said healthy modernization orders and a growing backlog boost visibility into future revenues.Otis Worldwide said tariffs, Service investments and Mideast delays pressured margins, trimming earnings. Otis Worldwide Corporation (OTIS - Free Report) reported mixed first-quarter 2026 results, wherein earnings missed the Zacks Consensus Estimate and declined year over year. Meanwhile, net sales surpassed the same and increased from the prior year's reported figure.

Otis Worldwide’s first-quarter results reflected broad-based momentum in Service, led by repair activity, alongside solid order and backlog improvement in the modernization business. The company has emphasized actions around operational execution, pricing and cost efficiency as it works to monetize investments and improve margin performance in the coming quarters.

However, management attributed the margin pressure to tariff impacts relative to the prior year, continued Service investments that began in the second quarter of last year and accelerated this year, and shipment delays tied to geopolitical disruption in the Middle East.

Inside OTIS’ Q1 HeadlinesOTIS reported earnings per share (EPS) of 89 cents, missing the Zacks Consensus Estimate of 91 cents by 2.2%. In the year-ago quarter, it had reported an adjusted EPS of 92 cents.

Net sales of $3.57 billion surpassed the consensus mark of $3.5 billion by 2% and increased 6.4% on a year-over-year basis. Organically, net sales were up 1% year over year. Favorable foreign exchange movement supported sales growth by 5%. A standout in the quarter was repair, with net sales up 16% at actual currency and organic repair sales up about 10%.

Adjusted operating margin contracted 130 basis points year over year to 15.4%, reflecting weaker segment performance, partially offset by a favorable segment mix. Our model predicted the adjusted operating margin to decrease 70 bps (basis points) year over year to 16%.

Segment Details of OTISService: The net sales of this segment increased 11% year over year to $2.42 billion. A 5% rise in organic sales was accompanied by a 5% favorable foreign exchange movement. Organic maintenance and repair sales increased 4%, and organic modernization sales rose 6% from the year-ago quarter. Our model estimated organic sales for the segment to grow 10.2%. The Modernization backlog at constant currency increased 30% year over year.

Segment operating margin contracted 160 bps year over year to 23% due to higher volume and favorable pricing, which were more than offset by higher labor and material costs, investments and mix effects.

New Equipment: This segment’s net sales of $1.15 billion fell 1% from the prior-year period. Organic sales declined 5%. Our model predicted organic sales for the New Equipment segment to decrease 5%.

New Equipment orders rose 1% at constant currency, with more than 20% strength in the Americas and low single-digit growth in EMEA, partially offset by more than 20% decline in the Asia Pacific and a low teens decline in China. The segment’s backlog increased 6% at actual currency and 3% at constant currency, providing some support for future revenue conversion despite near-term delivery challenges.

Segment operating margin contracted 240 bps year over year to 3.3%. The downtrend was due to the impacts of lower volume, unfavorable price, and mix, which was partially offset by productivity tailwinds.

Financial Position of OTISOtis Worldwide had cash and cash equivalents of $834 million as of March 31, 2026, down from $1.1 billion reported at 2025-end. Long-term debt decreased to $6.88 billion as of March 31, 2026, from $6.9 billion at the end of 2025.

Net cash flows provided by operating activities were $413 million as of March 31, 2026, up from $190 million a year ago.

Adjusted free cash flow (FCF) totaled $272 million as of March 31, 2026, up from $186 million a year ago.

OTIS Revises 2026 GuidanceThe company expects net sales in the range of $15.1-$15.3 billion (up from the prior outlook of $15-$15.3 billion), implying approximately 4.6%-6% year-over-year growth. Organic sales growth is still projected in the low- to mid-single-digit range.

Organic New Equipment sales are now expected to range from low single digits to flat (previously projected as flat to low single digits), while Organic Service sales are still anticipated to grow in the mid- to high-single-digit range.

Adjusted operating profit is projected at $2.5 billion (down from the prior range of $2.5-$2.6 billion), now reflecting an increase of $20-$60 million at constant currency and $60-$100 million at actual currency.

Adjusted earnings are forecast at $4.20-$4.24 per share, while adjusted free cash flow is expected to be between $1.6 billion and $1.65 billion (compared with the earlier outlook of $1.6-$1.7 billion).

OTIS' Zacks Rank & Key PicksOtis Worldwide currently carries a Zacks Rank #4 (Sell).

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The Zacks Consensus Estimate for DXP Enterprise’s fiscal 2026 sales and EPS indicates growth of 10.1% and 14.4%, respectively, from the prior-year levels.

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The Zacks Consensus Estimate for Astec’s 2026 sales and EPS indicates growth of 13% and 13.5%, respectively, from the prior-year levels.

Alcoa Corporation (AA - Free Report) presently sports a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 67.3%, on average. AA stock has jumped 64.2% in the past six months.

The Zacks Consensus Estimate for Alcoa’s 2026 sales and EPS indicates growth of 17.6% and 103.2%, respectively, from the year-ago period’s levels.

Posted by Defense World Staff on Apr 26th, 2026

Arizona State Retirement System lessened its stake in Otis Worldwide Corporation (NYSE:OTIS – Free Report) by 6.6% in the fourth quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The firm owned 107,728 shares of the company’s stock after selling 7,557 shares during the period. Arizona State Retirement System’s holdings in Otis Worldwide were worth $9,410,000 at the end of the most recent quarter.

A number of other large investors have also added to or reduced their stakes in OTIS. Root Financial Partners LLC bought a new stake in shares of Otis Worldwide during the 3rd quarter valued at $26,000. Stance Capital LLC bought a new stake in shares of Otis Worldwide during the 3rd quarter valued at $27,000. Rakuten Investment Management Inc. bought a new stake in shares of Otis Worldwide during the 3rd quarter valued at $31,000. Westside Investment Management Inc. grew its position in shares of Otis Worldwide by 100.0% during the 3rd quarter. Westside Investment Management Inc. now owns 336 shares of the company’s stock valued at $31,000 after acquiring an additional 168 shares during the period. Finally, Physician Wealth Advisors Inc. grew its position in shares of Otis Worldwide by 57.7% during the 3rd quarter. Physician Wealth Advisors Inc. now owns 339 shares of the company’s stock valued at $31,000 after acquiring an additional 124 shares during the period. Institutional investors own 88.03% of the company’s stock.

Key Stories Impacting Otis Worldwide Here are the key news stories impacting Otis Worldwide this week:

Positive Sentiment: Management highlighted strong service revenue growth and reiterated fiscal‑year EPS guidance range (FY26: 4.200–4.240), signaling durable recurring revenue that supports longer‑term cash flow. Otis Worldwide Corp (OTIS) Q1 2026 Earnings Call Highlights: Strong Service Growth and … Positive Sentiment: Company reported sales growth driven by services, and some outlets flagged that Otis lifted its sales outlook, which can support multiple expansion if margins recover. Otis tops revenue view, lifts sales outlook as shares rise Positive Sentiment: Otis remains on dividend roundups as an income name, a signal to yield‑focused investors that cash return remains part of the thesis. Dividend Roundup: Otis Worldwide, Eaton, AGNC Invest, Morgan Stanley, and more Neutral Sentiment: Royal Bank of Canada trimmed its price target from $110 to $105 but kept an “outperform” rating — a cautious vote of confidence that still signals upside versus current levels. Royal Bank Of Canada price target change Neutral Sentiment: Earnings materials and call slides provide detail on backlog, service mix and regional dynamics; useful for modeling but not a market mover by itself. Otis Worldwide Corporation 2026 Q1 – Results – Earnings Call Presentation Negative Sentiment: Analysts and commentators flagged persistent margin pressure from labor and materials; Seeking Alpha calls out lackluster margin progress as a notable headwind that could limit earnings upside. Otis Worldwide: Lackluster Margin Progress Is A Notable Headwind Negative Sentiment: Company warned of tariff exposure and shipment delays related to the Middle East conflict, which pose short‑term cost and delivery risks for equipment sales and could pressure near‑term margins. Elevator maker Otis flags tariff hit, shipment delays amid Middle East conflict Otis Worldwide Stock Down 2.1% Shares of OTIS stock opened at $77.80 on Friday. The stock has a market cap of $30.01 billion, a P/E ratio of 20.69, a PEG ratio of 2.48 and a beta of 1.05. Otis Worldwide Corporation has a 52 week low of $75.27 and a 52 week high of $101.42. The company’s fifty day simple moving average is $83.50 and its two-hundred day simple moving average is $87.26.

Otis Worldwide (NYSE:OTIS – Get Free Report) last announced its quarterly earnings results on Wednesday, April 22nd. The company reported $0.89 EPS for the quarter, missing the consensus estimate of $0.91 by ($0.02). The company had revenue of $3.57 billion during the quarter, compared to analysts’ expectations of $3.77 billion. Otis Worldwide had a negative return on equity of 29.39% and a net margin of 10.11%.The firm’s revenue for the quarter was up 6.4% compared to the same quarter last year. During the same quarter in the previous year, the firm earned $0.92 EPS. Otis Worldwide has set its FY 2026 guidance at 4.200-4.240 EPS. On average, analysts anticipate that Otis Worldwide Corporation will post 4.14 EPS for the current fiscal year.

Otis Worldwide Increases Dividend The business also recently declared a quarterly dividend, which will be paid on Friday, June 12th. Shareholders of record on Friday, May 15th will be paid a $0.44 dividend. This represents a $1.76 annualized dividend and a yield of 2.3%. The ex-dividend date is Friday, May 15th. This is an increase from Otis Worldwide’s previous quarterly dividend of $0.42. Otis Worldwide’s dividend payout ratio is presently 48.00%.

Wall Street Analyst Weigh In OTIS has been the subject of a number of recent research reports. Royal Bank Of Canada cut their price objective on shares of Otis Worldwide from $110.00 to $105.00 and set an “outperform” rating for the company in a research report on Thursday. Morgan Stanley set a $88.00 price objective on shares of Otis Worldwide in a research report on Friday. New Street Research set a $98.00 price objective on shares of Otis Worldwide in a research report on Friday, January 30th. JPMorgan Chase & Co. downgraded shares of Otis Worldwide from an “overweight” rating to a “neutral” rating and set a $98.00 price objective for the company. in a research report on Friday, January 30th. Finally, Weiss Ratings reissued a “hold (c)” rating on shares of Otis Worldwide in a research report on Friday, March 27th. Three research analysts have rated the stock with a Buy rating, seven have given a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, the stock presently has an average rating of “Hold” and a consensus target price of $97.64.

Read Our Latest Stock Analysis on Otis Worldwide

Insider Activity at Otis Worldwide In other Otis Worldwide news, CAO Michael Patrick Ryan sold 1,182 shares of the business’s stock in a transaction on Tuesday, February 10th. The shares were sold at an average price of $90.06, for a total value of $106,450.92. Following the sale, the chief accounting officer owned 3,504 shares in the company, valued at $315,570.24. The trade was a 25.22% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, insider Montlivault Stephane De sold 47,944 shares of the business’s stock in a transaction on Thursday, February 12th. The stock was sold at an average price of $92.25, for a total transaction of $4,422,834.00. Following the completion of the sale, the insider owned 29,176 shares in the company, valued at approximately $2,691,486. The trade was a 62.17% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold 158,013 shares of company stock worth $14,337,635 in the last quarter. 0.23% of the stock is owned by company insiders.

Otis Worldwide Profile (Free Report)

Otis Worldwide Corporation is a manufacturer, installer and servicer of vertical transportation systems, including elevators, escalators and moving walkways. The company designs and supplies new equipment for commercial, residential and industrial buildings, and provides ongoing maintenance and repair services aimed at maximizing equipment availability and safety. Otis also offers modernization solutions to upgrade aging systems and improve performance, accessibility and energy efficiency.

In addition to new equipment sales, a significant portion of Otis’s business derives from long-term service contracts and responsive maintenance work.

Recommended Stories Five stocks we like better than Otis Worldwide Want to see what other hedge funds are holding OTIS? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Otis Worldwide Corporation (NYSE:OTIS – Free Report).

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Otis CEO Judy Marks said the company can't hire elevator mechanics fast enough. Bloomberg/Getty Images In an era of rampant layoffs, it can feel like no job is safe.

Except, perhaps, elevator mechanics.

Judy Marks is the CEO of elevator giant Otis and oversees a workforce of roughly 72,000 employees. That includes about 45,000 mechanics — and she says the company can't hire them fast enough.

"The demand is high," Marks told Business Insider.

When Otis spun off from its parent company in April 2020, it employed about 40,000 of these field professionals. Today, that number has increased by about 12.5% to 45,000, Otis said. The Bureau of Labor Statistics projected that elevator and escalator installers and repairers will grow by 5% between 2024 and 2034, which is 2% above the average for all occupations.

Beyond installing elevators and escalators, mechanics also maintain and repair equipment, she said. In some markets, including Japan, she said a declining population combined with a boom in refurbishment and construction has made hiring a challenge.

Mechanics also don't have to worry about losing their jobs to automation in the immediate future. As a regulated industry in most countries, Marks said humans are essential to the job. The role requires years of training and physical labor, which hasn't been easily replaced by robots so far.

"This is truly a craft skill," Marks said.

A long-term careerMany skilled-trade jobs have been on the rise in recent years. LinkedIn released data last year that revealed construction was the fastest-growing industry for new college grads. In 2026, it ranked construction fifth among the fastest-growing industries for new grads.

Marks said elevator mechanics, in particular, tend to stay in the profession for decades. She said Otis has roughly as many mechanics with zero to five years of experience as it does workers who have been with the company for more than 30 years.

"We don't have this kind of 'silver cliff' that's coming," Marks said, referring to how some older workers struggle in other trades.

"Most of them stay in the trade the rest of their life, and a lot of them, their fathers or mothers or grandfathers were in it."

In the US, Otis elevator mechanics are represented through a multi-employer union. Marks said it offers an apprenticeship for people starting at 18 years old, working for Otis during the day as helpers while attending elevator service school at night. After completing a four-year apprenticeship and passing a mechanic's exam, workers achieve journeyman status in the trade.

One of the highest-paying trade jobsElevator mechanics sit at the top of the pay scale when it comes to trade jobs.

The BLS released data on Friday that found that elevator and escalator installers and repairers earned the highest average salary among construction and extraction occupations in May 2025, at $109,820, with the 90th percentile at $158,890. That's well above both the category's average wage of $65,360 and the overall US average wage of $69,770, according to the report.

Other top-paying trades in the category included first-line supervisors of construction trades and extraction workers, who earned an average of $86,450, and terrazzo workers and finishers, who made $84,920, the report said.

In addition to solid pay, elevator mechanic roles at Otis also include eligibility for paid college tuition.

"When they come out and come work for us, I'll pay if they want to go to college," Marks said.

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Job Market

­Includes options for factory preassembled modules to streamline installation time Offers modernization packages for commercial escalators that improve safety and reliability, and reduce disruption during the modernization process Flexible upgrade options allow customers to select the level of modernization that best fits their building, budget and operational needs , /PRNewswire/ -- Otis Worldwide Corporation (NYSE: OTIS), the world's leading elevator and escalator manufacturing, installation, service and modernization company, has announced the global launch of its Otis Link™ MOD suite of commercial escalator modernization solutions, giving building owners a safer, smarter and more efficient way to upgrade aging escalators.

Otis’ modernization solutions provide improved reliability, less disruption to building operations and tenants, and a clearer more manageable roadmap for long-term performance. Global populations, infrastructure and equipment continue to age. Of the more than 1 million escalators installed globally, predominantly commercial escalators, nearly 20%1 are now in the modernization window, requiring updates to keep pace with evolving safety standards, usage demands and performance expectations. Otis' modernization solutions provide improved reliability, less disruption to building operations and tenants, and a clearer more manageable roadmap for long-term performance.

Otis Link MOD offers a suite of comprehensive upgrade packages, including the new Otis Link MOD Pro package, which delivers a complete modernization of critical commercial escalator components and aesthetics while retaining the existing truss—the escalator's structural backbone. Its modular, factory‑preassembled design streamlines modernization, significantly shortening project timelines. By minimizing on‑site work, the system reduces jobsite hazards and downtime in busy commercial environments and adapts easily to a wide range of building layouts.

"Across the globe, our customers are balancing aging infrastructure with the need to keep people moving safely and reliably every day. That challenge is only intensifying as populations age and demand for buildings – and the systems that support them – continues to grow," said Claire Miller, Executive Vice President and Chief Growth Officer, Otis. "Our Otis Link MOD solutions are designed to help customers extend the life and value of their escalators while minimizing disruption to their daily operations, so passengers can continue to move with confidence. By combining advanced technology and engineering with our deep modernization expertise, we're enabling building owners to extend the life of their escalators and deliver a mobility experience that meets modern safety and performance expectations."

The Otis Link MOD suite of solutions includes four packages2 – Link MOD Prime, Link MOD Plus, Link MOD Pro and full replacement with an Otis Link escalator. All Link MOD packages are powered by Otis' industry-leading technology and designed to allow customers to choose the scope and pace of their escalator modernization.

Visit www.otis.com for full details.

What are the benefits of Otis' Link MOD packages?

Enhance Safety

Improved step stability featuring the Otis Step Safety System, engineered to keep escalator steps firmly on their tracks. Optional patented mini moving skirt, designed to help prevent objects from becoming caught (available with full replacement solution). Integrated handrail sanitizing and cleaning options that help reassure users about the cleanliness of the equipment. Minimize the unexpected

Customers are in control, making informed choices about the scope, cost and pace of their escalator modernization with guidance from Otis experts. The Otis Link MOD Pro package offers a modular, pre-assembled design that minimizes disruption on site. Improve performance with technology-driven reliability

The self-adjusting handrail system automatically adjusts the handrail tension while the escalator is running and reduces handrail-related callbacks by over 90% compared to units without this technology.3 An upgraded electronic controller minimizes shutdowns and keeps escalators available when customers need them. The Otis ONE™ IoT platform (where available4) collects and analyzes data from escalators' smart sensors to deliver performance information, proactive communication and predictive insights to Otis' customers, and the field professionals servicing their units. Available in the U.S. and Canada, Otis Link MOD escalators feature a direct drive system that eliminates the traditional drive chain, offering greater flexibility for installation in existing buildings, improved reliability and reduced lubrication needs. Operational features

An intelligent lubrication system reduces oil consumption by adjusting the amount of oil automatically at each lubrication point. A standby or intermittent use mode option reduces downtime, energy consumption and operating costs when the escalator is idle. Bring passenger experience to the next level

Options include aesthetic packages, handrail colors and customizable LED lighting. Seamless support

Otis' highly trained technicians and support teams are available to properly maintain escalators, with a focus on safety, efficiency and reliability. About Otis
Otis gives people freedom to connect and thrive in a taller, faster, smarter world. The global leader in the manufacture, installation, service and modernization of elevators and escalators, we move 2.5 billion people a day and maintain approximately 2.5 million customer units worldwide – the industry's largest Service portfolio. You'll find us in the world's most iconic structures, as well as residential and commercial buildings, transportation hubs and everywhere people are on the move. Headquartered in Connecticut, USA, Otis is 72,000 people strong, including 45,000 field professionals, all committed to manufacturing, installing and maintaining products to meet the diverse needs of our customers and passengers in more than 200 countries and territories. To learn more, visit www.otis.com and follow us on LinkedIn, YouTube, Instagram and Facebook @OtisElevatorCo.

Based on Otis internal data. Otis Link MOD package availability varies by market. Visit Otis.com or contact your Otis sales representative to learn more. Based on Otis internal data with Otis Service contract. Otis ONE features are subject to a maintenance contract and paid tiered subscription with Otis. Otis ONE for Link and Link MOD suite of offerings is available in Asia Pacific, China, Europe and the Middle East.   Media Contact:
Richard Howat
Phone: +44 7392860548
Email: [email protected]

SOURCE Otis Worldwide Corporation

T-Mobile US and OTIS Worldwide are both down over 25% in the past year, creating long-term buying opportunities. TMUS boasts the lowest leverage among peers, aggressive buybacks, and raised guidance, with a forward P/E under 17x and double-digit dividend growth expected. OTIS faces temporary inflation and China headwinds but shows stabilizing orders, cost savings, and trades at a forward P/E of 16.7x, below historical and sector averages.