01—Abstract
Summary
Summary of the 10-K filed February 5, 2026. Cited figures are marked; the original filing is the authoritative source.
Otis Worldwide Corporation's 2025 results show net sales of $14.43 billiona, up slightly from $14.26 billion in 2024, with the Service segment growing to $9.44 billion (65% of net sales) while New Equipment declined to $4.99 billion from $5.37 billion.
Service generated 91% of segment operating profit, and organic New Equipment sales fell 7%, driven by a greater than 20% decline in China. Consolidated operating profit rose to $2.13 billionb from $2.01 billion, but net income attributable to Otis fell to $1.38 billion from $1.65 billion, mainly due to a higher effective tax rate of 24.8% (versus 15.0%) and higher interest expense of $196 million, which included the absence of roughly $200 million of 2024 German tax litigation interest income. Diluted EPS was $3.50 versus $4.07.
The balance sheet remains heavily leveraged with total equity of negative $5.35 billionc, total debt of $7.96 billion and cash of $1.10 billion, down from $2.30 billion. The company returned capital through $809 million of share repurchases and $647 million of common dividends, and repaid $1.3 billion of 2.056% notes in April 2025, funded partly by new notes issued in September 2025. Approximately $1.3 billion remained authorized under the $2.0 billion repurchase program at year end.
The filing also highlights the UpLift transformation program, with total UpLift costs of $145 milliond in 2025 and run-rate savings of approximately $200 million, and the expected German tax refunds of roughly $362 million, against a remaining indemnity payable to RTX of $56 million. Management notes that new tariffs had an impact of approximately $20 million in 2025 and a similar impact is anticipated in 2026, and it does not currently expect a significant effect on liquidity.
02—Key points
Key Highlights
- Net sales of $14.43 billion in 2025, up 1% from $14.26 billion, with Service at $9.44 billion (65% of net sales) and New Equipment at $4.99 billion (35%).
- Service segment operating profit rose to $2.37 billion with a 25.1% margin, versus New Equipment operating profit of $240 million and a 4.8% margin, which fell 27% year over year.
- Net income attributable to Otis Worldwide Corporation was $1.38 billion, down from $1.65 billion, as the effective tax rate rose to 24.8% from 15.0%.
- Diluted EPS was $3.50 compared with $4.07 in 2024.
- Total debt was $7.96 billion against cash of $1.10 billion; total equity was a deficit of $5.35 billion.
- Capital returned in 2025 included $809 million of share repurchases and $647 million of common dividends, with $1.3 billion remaining on the $2.0 billion repurchase authorization.
- UpLift transformation program totaled $145 million of costs in 2025 with run-rate savings of approximately $200 million, and the company expects approximately $362 million of German tax refunds into 2026, against a $56 million remaining indemnity payable to RTX.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 5, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $14.43B$14.26B | +1.2% |
| R&D Expenses | $152.00M$152.00M | 0.0% |
| SG&A Expenses | $1.98B$1.86B | +6.3% |
| Operating Expenses | $12.19B$12.02B | +1.5% |
| Operating Income | $2.13B$2.01B | +6.2% |
| Interest Expense | $217.00M$183.00M | +18.6% |
| Net Income | $1.38B$1.65B | −15.9% |
| EPS (Basic) | $3.52$4.10 | −14.1% |
| EPS (Diluted) | $3.50$4.07 | −14.0% |
| Shares Outstanding (Basic) | 392.80M401.70M | −2.2% |
| Shares Outstanding (Diluted) | 394.90M404.40M | −2.3% |
05—Questions
Frequently Asked Questions
How did the New Equipment segment perform in 2025?
New Equipment net sales fell 7% to $4.99 billion from $5.37 billion, with the organic sales decrease of (7)% driven by a greater than (20)% decline in China and a high single-digit decline in Americas, partly offset by mid single-digit growth in EMEA and Asia Pacific. Segment operating profit decreased $89 million to $240 million, and operating margin fell to 4.8% from 6.1%.
Why did net income attributable to Otis decline despite higher operating profit?
Operating profit increased to $2.13 billion from $2.01 billion, but the filing attributes the decline in net income attributable to Otis to a higher effective tax rate of 24.8% versus 15.0% in 2024, and higher interest expense of $196 million versus net interest income of $31 million in 2024. The 2024 interest figure included approximately $200 million of interest income related to the German tax litigation ruling, which did not recur.
What is the status of the German tax litigation recovery?
The company won the case in the third quarter of 2024 and expects total refunds of approximately €308 million net of tax (about $362 million) as of December 31, 2025, with refunds continuing into 2026. The indemnity payable to RTX was estimated at $56 million at year end, down from $194 million, and the amount remains subject to an ongoing dispute resolved under the Tax Matters Agreement.
How is Otis funding its capital returns and debt obligations?
Operating cash flow was $1.60 billion in 2025. The company repaid $1.3 billion of 2.056% notes in April 2025 and issued $500 million of 5.131% notes due 2035 in September 2025. As of year end there were no commercial paper borrowings, and the company had a $1.5 billion revolving credit facility with no borrowings outstanding. Cash and cash equivalents declined to $1.10 billion from $2.30 billion.
What risks does management highlight for 2026?
Management cites macroeconomic conditions including inflationary pressures, high interest rates, tighter credit conditions and changes in global trade policies, including higher U.S. tariffs. Tariffs had an impact of approximately $20 million in 2025 with a similar impact anticipated in 2026. The filing also notes ongoing conflicts between Russia and Ukraine and instability in the Middle East, and says that it does not currently expect a significant impact to its liquidity from these conditions.
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