Trane (TT) Q2 2026: Sales +10.6%, Record $12.1B Backlog, Gross Margin Sheds 1.9pt
Trane Technologies spent $742.0 million on acquisitions in the first half of 2026, most of it to buy its way deeper into data center cooling. The bill arrived in the margin line. Second-quarter revenue rose 10.6% to $6,353.5 million — but only 9 percentage points of that were organic — while gross profit margin fell from 37.69% to 35.77%, and half-year operating margin declined for the first time after five consecutive years of expansion. Three numbers argue the damage is transitional rather than structural: second-quarter bookings of $7.8 billion, up 39%, took backlog to a record $12.1 billion; customer advances on the balance sheet jumped 59.0%; and half-year cash conversion swung from 0.69x to 1.12x. On the same day it reported, the company raised full-year revenue and EPS guidance.
1. Consolidated Balance Sheet
1-1. Major asset movements
| Item | Dec 31, 2025 ($M) | Jun 30, 2026 ($M) | Change % |
|---|---|---|---|
| Cash and cash equivalents | 1,763.3 | 1,318.3 | -25.2 |
| Accounts and notes receivable, net | 3,235.3 | 4,234.6 | +30.9 |
| Inventories | 2,103.6 | 2,616.9 | +24.4 |
| Property, plant and equipment, net | 2,251.3 | 2,392.7 | +6.3 |
| Goodwill | 6,457.0 | 7,031.9 | +8.9 |
| Intangible assets, net | 3,236.7 | 3,518.1 | +8.7 |
| Total assets | 21,420.7 | 23,925.6 | +11.7 |
Source: Trane Technologies plc Form 10-Q for the quarter ended June 30, 2026, Condensed Consolidated Balance Sheets.
Receivables grew 30.9% and inventories 24.4% against half-year revenue growth of 8.5% ($11,322.9 million versus $10,434.9 million). Part of that gap is seasonal, since HVAC ships into the summer peak and December is the trough. Part of it is acquired. Goodwill rose $562.8 million from acquisitions alone, split $510.1 million to Americas and $52.7 million to EMEA. Stellar Energy, bought February 17 for $553.4 million gross, contributed $379.2 million of goodwill and $174.2 million of identifiable intangibles covering customer relationships, developed technology and backlog.
