01—Abstract
Summary
Summary of the 10-Q filed October 29, 2026. Cited figures are marked; the original filing is the authoritative source.
Otis Worldwide Corporation reported net sales of $3,914 milliona for the quarter ended September 30, 2026, up from $3,690 million a year earlier, and net income attributable to Otis Worldwide Corporation of $414 million, compared with $374 million.
Diluted earnings per share were $1.08b, versus $0.95. For the nine months ended September 30, 2026, net sales were $11,339 million (versus $10,635 million), net income attributable to the company was $1,182 million (versus $1,010 million), and diluted earnings per share were $3.07 (versus $2.55). The filing attributes the Service segment's growth to an organic volume increase of 7% for both the quarter and nine months, with modernization growing 20% in the quarter.
New Equipment organic volume rose 3% in the quarter but declined (1)% for the nine months, with a greater than (20)% decline in China. Operating margin fell in both segments, with New Equipment at 3.2% for the nine months (5.2% a year earlier) and Service at 23.5% (25.0%). Cash flow from operations was $1,017 millionc for the nine months, up from $779 million, and cash and cash equivalents ended the period at $866 million.
The company repurchased $807 milliond of common stock in the nine months but none in the third quarter, leaving about $500 million under its $2.0 billion authorization. Cash dividends declared were $1.30 per share for the nine months. Total debt was $8,275 million, and the company reported total shareholders' deficit of $(5,430) million.
In May 2026 it issued $700 million of 4.488% notes due 2029, and the proceeds are partly earmarked to repay Euro notes due December 2026. The filing also highlights a German tax litigation win, with refunds of approximately $371 million expected, of which an indemnity payable of $55 million is owed to RTX Corporation under the Tax Matters Agreement.
Remaining performance obligations totaled approximately $19.6 billion, with about 75% expected to be recognized over the following 24 months. The filing also discloses that a French subsidiary, Otis France, provided maintenance services to an Iranian bank's Paris branch, that Otis has applied for an OFAC license to wind down the relationship, and that it has filed a voluntary self-disclosure notice.
02—Key points
Key Highlights
- Q3 2026 net sales of $3,914 million (vs. $3,690 million) and net income attributable to Otis Worldwide Corporation of $414 million (vs. $374 million); diluted EPS of $1.08 (vs. $0.95).
- Nine-month net sales of $11,339 million (vs. $10,635 million), net income attributable of $1,182 million (vs. $1,010 million), and diluted EPS of $3.07 (vs. $2.55).
- Service segment organic volume rose 7% in both the quarter and nine months, while New Equipment organic volume grew 3% in the quarter but declined (1)% for the nine months, with a greater than (20)% decline in China.
- Operating cash flow of $1,017 million for the nine months (vs. $779 million), with cash and cash equivalents of $866 million at September 30, 2026.
- No share repurchases in Q3 2026; $807 million repurchased in the nine months, with about $500 million remaining under the $2.0 billion program.
- Issued $700 million of 4.488% notes due 2029 in May 2026; total debt stood at $8,275 million.
- German tax litigation refunds of approximately €326 million (about $371 million) expected, with a $55 million indemnity payable to RTX Corporation remaining; remaining performance obligations of approximately $19.6 billion.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed October 29, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $3.91B$3.69B | +6.1% |
| R&D Expenses | $40.00M$36.00M | +11.1% |
| SG&A Expenses | $489.00M$504.00M | −3.0% |
| Operating Expenses | $3.29B$3.10B | +6.2% |
| Operating Income | $620.00M$586.00M | +5.8% |
| Interest Expense | $65.00M$53.00M | +22.6% |
| Net Income | $414.00M$374.00M | +10.7% |
| EPS (Basic) | $1.09$0.96 | +13.5% |
| EPS (Diluted) | $1.08$0.95 | +13.7% |
| Shares Outstanding (Basic) | 381.00M391.00M | −2.6% |
| Shares Outstanding (Diluted) | 381.90M392.80M | −2.8% |
05—Questions
Frequently Asked Questions
How did Otis perform in the third quarter of 2026?
Net sales rose to $3,914 million from $3,690 million, and operating profit was $620 million versus $586 million. Net income attributable to Otis Worldwide Corporation was $414 million, or $1.08 per diluted share, compared with $374 million, or $0.95, a year earlier. Organic volume grew 6% for the quarter, driven by 7% growth in Service and 3% in New Equipment.
Why did margins decline even though sales grew?
Gross margin percentage was 29.5% for the quarter versus 30.7% a year earlier, which the filing attributes to cost increases, including tariffs, labor and material costs, partly offset by the benefit of Service sales growing faster than New Equipment. New Equipment operating margin fell to 3.2% from 4.7%, citing unfavorable price, regional and product mix and organizational initiative costs, while Service operating margin fell to 24.2% from 25.5%.
Is Otis returning cash to shareholders, and how much capacity remains?
Cash dividends declared were $0.44 per common share in the quarter and $1.30 per share for the nine months. The company repurchased 9.6 million shares for $800 million during the nine months, though none in the third quarter. Approximately $500 million remains under its $2.0 billion share repurchase program.
What is the status of the German tax litigation and the RTX indemnity?
Otis won a German tax case, and it expects total refunds of approximately €326 million net of tax (about $371 million), with refunds continuing through 2026. Under the Tax Matters Agreement with RTX Corporation, the company estimates the remaining amount payable to RTX at $55 million, and the parties continue to dispute the scope of the final indemnity amount.
What did the filing disclose about sanctions-related activity?
Otis France provided elevator maintenance services to the Paris branch of Banque Sepah, an Iranian bank that OFAC has identified as associated with the Government of Iran. The filing states that aggregate revenue from the relationship from its inception through June 2026 was approximately $31,307.09, with aggregate net profit of approximately $15,653.54, and that no revenue or profit was recorded in the third quarter. Otis has applied for an OFAC license to wind down the relationship and has filed an initial voluntary self-disclosure notice.
06—Continue