OTIS REPORTS SECOND QUARTER 2026 RESULTS (Form 8-K)

OTIS REPORTS SECOND QUARTER 2026 RESULTS

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

FARMINGTON, Conn., July 22, 2026 - 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."

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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.

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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.

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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.

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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.

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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.

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