Otis Worldwide (NYSE:OTIS) reported full-year 2025 results that highlighted a growing divide between its steady service business and a challenging landscape for new equipment.
While GAAP earnings took a hit from restructuring costs and currency headwinds, a 43% explosion in modernization orders has provided the company with its largest growth runway in years.
The Connecticut-based manufacturer reported total net sales of $14.4 billion for 2025, with organic growth remaining flat on an annual basis.
However, the underlying numbers suggest a business in transition: Service sales—the company’s high-margin engine—climbed 8% in the fourth quarter, while modernization orders surged as building owners globally look to upgrade aging infrastructure with digital and energy-efficient systems.
On the bottom line, GAAP earnings per share (EPS) fell 14% to $3.50, largely due to one-time charges related to the "Upward" productivity initiative.
Conversely, adjusted EPS rose 6% to $4.05, demonstrating the company’s ability to expand margins despite stagnant top-line growth.
“Our Service-led model continues to prove its resilience,” said CEO Judy Marks.
“The 30% increase in our modernization backlog is a testament to the essential nature of our products and the success of our strategy to capture the aging building cycle.”
Meanwhile, cash generation remained a core strength for the company.
Otis reported $1.6 billion in operating cash flow for the year, with adjusted free cash flow coming in at $1.58 billion.
This liquidity allowed the firm to return significant capital to investors, including $800 million in share repurchases completed in 2025.
Looking ahead to 2026, Otis management provided an optimistic outlook, projecting organic sales growth and adjusted EPS to rise in the mid-to-high single digits.