CARR · Q2 2026 Earnings

Bullish

Carrier Global

Reported July 28, 2026

30-second summary

Carrier beat every Q2 guide — revenue $6.35B vs "just below $6B" (+$351M), adjusted EPS $0.86 vs ~$0.80, adjusted operating margin 17.2% vs ~17%, and FCF $810M vs "a few hundred million" — and used the print to raise FY26 revenue $1B to ~$23B, EPS $0.10 to ~$2.90, and upgrade the FY organic line from "flat to up LSD" to "up mid-high single digit." The margin line requires context: 17.2% beat the guide by 20bps but was down 190bps YoY, and adjusted operating profit was down 6% YoY ($1,095M vs $1,166M), so this is a revenue/EPS beat rather than a margin story. Data center orders up >300% and commercial HVAC orders up ~65% turned the H2 execution "big hill" from a stretch into a visibility story, and organic sales returned to growth at +3% one quarter earlier than management had guided. The bull thesis that was hedged three months ago is now the base case — with the caveat that YoY margin compression is the offsetting datapoint underneath the raise.

Headline numbers

EPS

Q2 FY2026

$0.86

+4.9% vs est.

Revenue

Q2 FY2026

$6.35B

+4.0% YoY

+5.3% vs est.

Free cash flow

Q2 FY2026

$0.81B

Operating margin

Q2 FY2026

13.0%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$6.35B	$6.11B	+3.9%	$5.34B	+18.9%
EPS	$0.86	$0.92	-6.5%	$0.57	+50.9%
Operating margin	13.0%	14.8%	-180bps	4.8%	+820bps
Free cash flow	$0.81B	$0.57B	+42.6%	$-0.01B	+5500.0%

Guidance

Strong Q2 beat across revenue, EPS, and margins drives full-year FY2026 guidance raise: revenue +$1B to ~$23B, EPS +$0.10 to ~$2.90, organic sales upgraded to mid-high single-digit growth.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q2 FY2026	just below $6 billion	$6.351 billion	+$0.351 billion above guide	Beat
Adjusted EPS	Q2 FY2026	~$0.80	$0.86	+$0.06 above guide	Beat
Operating Margin	Q2 FY2026	approximately 17%	17.2%	+20 bps above guide	Beat
Free Cash Flow	Q2 FY2026	a few hundred million	$810 million	materially above qualitative guide	Beat

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY2026	~$22 billion	~$23 billion	+$1 billion	Raised
Adjusted EPS	FY2026	~$2.80	~$2.90	+$0.10	Raised
Adjusted Operating Profit	FY2026	~$3.4 billion	~$3.5 billion	+$0.1 billion	Raised
Organic Sales Growth	FY2026	flat to up LSD (low single digit)	up ~M-HSD (mid-to-high single digit)	upgraded from LSD to M-HSD	Raised

Reaffirmed unchanged this quarter: Free Cash Flow (~$2 billion)

Segment KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Climate Solutions Americas	$3.372B	$3.252B	+3.7%
Climate Solutions Europe	$1.324B	$1.253B	+5.7%
Climate Solutions Asia Pacific, Middle East & Africa	$0.917B	$0.882B	+4.0%
Climate Solutions Transportation	$0.738B	$0.726B	+1.7%
CSA Residential & Light Commercial Growth	RLC +9%, Light Commercial +10%	—	—

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Organic Sales Growth	3%	—	—
Total Company Orders	up ~40%	—	—
Commercial HVAC Orders	up ~65%	—	—
Data Center Orders	up >300%	—	—
Adjusted Operating Margin	17.2%	—	—
Free Cash Flow	$810M	—	—
Shareholder Returns	~$640M	—	—

Management tone

Q4 FY25 → Q1 FY26 → Q2 FY26: "Destocking declared over, recovery engineered" → "Clean beat but explicitly hedged on macro" → "Beat wide, raise big, hedges dropped"

Note: no transcript was available for this quarter; the tone read below is inferred from press-release language and the shape of the guidance revisions.

The single most telling shift is that this is the first quarter management is raising the FY26 line rather than reaffirming or hedging it. Last quarter it beat cleanly but refused to extrapolate ("with just one quarter behind us and still a lot of macro uncertainty, we are reaffirming"). This quarter the press release language flips to "Given record backlog levels and our year-to-date performance, we are raising our full-year outlook" — the "just one quarter behind us" hedge is gone by the time management has two quarters of beats to point at.

The organic sales upgrade from "flat to up LSD" to "up M-HSD" is the second tone shift. Last quarter management characterized organic returning to growth as an H2 event; the press release now leads with "Organic sales returned to growth earlier than expected, up 3%" — the "earlier than expected" phrasing is unusually direct language from a management team that spent multiple quarters warning about second-half execution risk. Read against the CSA Residential +9%/Light Commercial +10% prints, the upgrade appears grounded rather than opportunistic.

The data center narrative has moved from "load-bearing pillar we can't lose" to a metric where the held $1.5B guide is now conspicuously conservative. Q2 data center orders up >300% follows Q1's >500%; two quarters of order growth of that magnitude in a business guided to $1.5B FY revenue means either the guide is being deliberately sandbagged or the order book is compressing FY27 setup rather than FY26 delivery. Neither reading is bad for the stock, but investors should expect the $1.5B number to be revised higher on the Q3 call.

The macro-hedge language that ran through prior quarters is absent from the press release. "Encouraging" is the operative word for RLC in both CSA and CSE. This is a real posture change on demand — though the YoY margin compression across all four segments this quarter is a countervailing datapoint the tone shift does not address.

Answers to last quarter's watch list

Q2 adjusted operating margin versus the ~17% guide — Beat the guide at 17.2%, but the margin was down 190bps YoY and adjusted operating profit fell 6% YoY. The guide was met; the underlying YoY trajectory is negative. Status: Resolved on the guide, but margin compression is a new watch item

Q2 revenue versus "just below $6B" — Beat by $351M. Revenue landed at $6.351B versus the ~$6B guide, and organic sales came in at +3% versus an implied flat-to-down guide. Organic returned to growth one quarter earlier than management had modeled.

Resolved positively

Whether April pull-forward shows up as a Q2 sellout deceleration — Not resolved on the print. Total Q2 revenue of $6.35B and CSA Residential +9%/Light Commercial +10% suggest no material pull-forward gap given the strength of through-quarter delivery, but without transcript commentary on monthly movement through May and June the pull-forward question cannot be definitively closed.

Continue monitoring

Data center revenue conversion in H2 vs the $1.5B held guide — Continue monitoring on the number, resolved positively on the trend. Data center orders up >300% in Q2 (on top of >500% in Q1) and the FY $1.5B target held on the print.

Continue monitoring

Section 232 tariff resolution — The company didn't disclose. No specific tariff commentary appeared in the press release.

Continue monitoring

CSE Q2 margin trajectory post April 1 price actions — CSE segment operating margin came in at 7.2%, down 70bps YoY, with reported revenue +6% (organic +3%, FX +3%). Management cites favorable price/cost more than offset by unfavorable mix and selling investments. The pricing appears to have stuck at the price/cost line but hasn't converted to margin expansion. Status: Partially resolved, watch continues

What to watch into next quarter

Whether the FY26 data center revenue guide is raised above $1.5B on the Q3 call — two consecutive quarters of >300% order growth make the held guide look increasingly conservative. A raise on Q3 would validate the "targeting to exceed" framing set on Q1; a hold at $1.5B would signal factory throughput has become the binding constraint.

Q3 FY26 revenue against prior-year comp — if Q3 revenue tracks in-line with the ~$23B FY implied run-rate, that confirms organic growth durability into H2. A pull-forward from Q2 into Q3 would show up as a Q3 organic figure below the +3% Q2 pace.

CSA segment operating margin trajectory — CSA revenue is inflecting on the resi side but segment op margin fell 260bps YoY on mix and input costs. Whether Q3 shows margin stabilization or further compression will determine whether the resi recovery is truly value-accretive.

APMEA margin recovery — the 350bps YoY margin compression to 11.8% and 20% op profit decline is the largest segment-level deterioration in the print. Whether this is a one-time JV/Middle East drag or a structural mix issue will show up in Q3.

CST organic growth durability — organic 0% with Container +~40% offset by low-teens Truck/Trailer declines masks a wide dispersion. Whether Truck/Trailer stabilizes will determine if CST returns to organic growth in H2.

NORESCO exit and new U.S. factory cost line disclosure — the ~$0.05 EPS headwind absorbed into the raised FY guide is new this quarter; expect Q3 to clarify whether that is a one-time drag or a run-rate factor into FY27.

Q3 organic growth vs the upgraded "M-HSD" FY line — the FY implies H2 organic materially accelerating from Q2's +3%. A Q3 organic print below +5% would put the upgraded guide under pressure.

Sources

Carrier Global Q2 2026 Earnings Release, SEC Filing: https://www.sec.gov/Archives/edgar/data/1783180/000178318026000030/a99-q22026earningsexhibit.htm
Tapebrief Q1 FY2026, Q4 FY2025, Q3 FY2025, and Q2 FY2025 CARR briefs (prior coverage)

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