Strong Q2 Performance & Upgraded Full-Year Guidance: Carrier reported Q2 2026 total net sales of $6.35 billion, with 3% organic growth, driven by improving residential and light commercial markets. The company raised its full-year 2026 sales guidance to approximately $23 billion and also increased adjusted operating profit and adjusted EPS guidance, reflecting confidence in its outlook.
Exceptional Order Growth Driven by Data Centers: Total company orders soared 40% year-over-year in Q2, highlighted by a 65% increase in commercial HVAC orders and a more than 300% surge in data center orders. This contributed to a record backlog exceeding $8 billion, with a significant portion from data centers, indicating robust future demand. The data center revenue outlook for 2026 was raised to approximately $2 billion, doubling from 2025.
Margin Pressures Despite Strong Sales: While net sales grew, GAAP operating profit for the quarter was $825 million, and the adjusted operating margin declined to 17.2%, down 190 basis points year-over-year. This was primarily attributed to an unfavorable business mix, higher input costs, the timing of tariff mitigation, and lower joint venture income. GAAP diluted EPS from continuing operations was $0.60, a 14% decrease compared to Q2 2025.
Strategic Portfolio Enhancements and Market Recovery: Carrier completed the divestiture of Riello and announced the sale of NORESCO, optimizing its business portfolio. Concurrently, the acquisition of 75F is expected to significantly expand Carrier's cloud-native, AI-enabled building management system capabilities. Furthermore, the company observed improving residential and light commercial markets, with North American residential sales up 9% and European heat pump sales growing 20%.
Strong Free Cash Flow and Shareholder Returns: The company generated robust free cash flow of $810 million in the second quarter. Carrier also demonstrated its commitment to shareholders by returning approximately $640 million through dividends and share repurchases.

Overall Takeaway
The Q2 2026 earnings call for Carrier Global Corporation was broadly positive. Despite facing some margin pressures and a year-over-year decline in GAAP diluted EPS, the company delivered strong Q2 results, surpassing revenue and adjusted EPS expectations. The significant surge in orders, particularly in the high-growth data center and commercial HVAC segments, led to a record backlog, providing strong revenue visibility. Furthermore, Carrier raised its full-year guidance across key financial metrics, indicating confidence in its future performance, supported by strategic portfolio management and robust free cash flow generation.

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Balance Sheets Overview

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Balance Sheets