Otis Worldwide — Business Overview
What does Otis do?
Otis is the world's largest elevator and escalator company, serving customers across the full lifecycle of vertical transportation equipment. The business spans designing, manufacturing, selling, and installing new elevators and escalators, as well as maintaining, repairing, and modernizing equipment already in the field. As of year-end 2025, Otis employs approximately 72,000 people globally, including 45,000 field professionals, and serves customers in over 200 countries and territories.
The company operates two segments:
| Segment | What it does | Share of Net Sales | Share of Segment Operating Profit |
|---|---|---|---|
| New Equipment | Designs, manufactures, sells, and installs elevators, escalators, and moving walkways for new construction | 35% | 9% |
| Service | Maintains, repairs, and modernizes elevators and escalators already in use — both Otis units and those made by competitors | 65% | 91% |
The profit split is striking: Service generates 91% of segment operating profit on 65% of sales, while New Equipment contributes only 9% of profit on 35% of sales. This tells you the real engine of the business is keeping equipment running, not selling new units.
How does Otis make money?
New Equipment revenue comes from selling and installing elevators and escalators into new construction projects. Customers — typically real estate developers, general contractors, and government agencies — pay in stages: an upfront deposit, progress payments tied to construction milestones, and a final payment at commissioning. Revenue is recognized using the percentage-of-completion method (meaning revenue is booked gradually as work progresses, not all at once upon delivery). Orders are generally fulfilled within 12 months of booking.
The Service segment is the profit core, built on recurring maintenance contracts with building owners and facility managers. Otis maintains a portfolio of approximately 2.5 million units globally — a base that includes not just its own equipment but also units originally installed by competitors. Contracts range from basic inspection packages up to comprehensive coverage including full component replacement. The segment also generates revenue from modernization projects, where aging equipment is upgraded with new components, finishes, or digital systems. This recurring, contract-based revenue model gives the Service segment stable, predictable cash flows and much higher margins than New Equipment.
What market does Otis operate in?
Otis competes in the global elevator and escalator (E&E) industry, which spans both new construction and aftermarket services. The New Equipment side is tied to construction activity — particularly commercial real estate, residential high-rises, and infrastructure projects like airports and metro systems. The Service side is far less cyclical, since elevators legally require regular maintenance regardless of economic conditions, making it a more defensive business.
The industry has strong secular tailwinds in urbanization and an aging installed base, but faces near-term headwinds from a slowdown in Chinese real estate. China has been the world's largest E&E market, but a prolonged property market downturn there has pressured new equipment demand. Meanwhile, the global installed base of elevators continues to grow and age, which feeds demand for both maintenance contracts and modernization — two areas where Otis is actively investing.
Who are Otis's main competitors?
The E&E industry has a concentrated top tier globally, but is fragmented at the local service level. The four dominant global players — Otis, KONE (Finland), Schindler (Switzerland), and TK Elevator (Germany) — compete across both new equipment and service worldwide. Additional regional competitors operate in the Asia Pacific market. In the Service segment specifically, thousands of independent local service providers collectively hold about 50% of units under maintenance, though they capture a smaller share of revenue because they tend to handle simpler, lower-value contracts.
Otis claims its competitive advantages lie in global scale combined with local presence, brand reputation, and a growing digital platform. Its Otis ONE IoT (Internet of Things) platform connects approximately 1.1 million units to the cloud as of December 31, 2025, enabling real-time monitoring and predictive maintenance. The company argues this technology improves elevator uptime and technician productivity, which strengthens its value proposition for service contract renewals. It also holds roughly 4,600 issued patents globally and has 1,300 engineers focused increasingly on digital and software capabilities.
Where does Otis operate?
Otis has a genuinely global footprint, with international markets accounting for 71% of net sales in 2025. The company has a direct physical presence in more than 70 countries, operating from more than 1,400 branches and offices, with 11 R&D centers and 16 factories located in China, India, Japan, France, Germany, Spain, and the United States.
China is the single most important international market and also the most significant source of geopolitical risk. Otis manufactures and sells in China through joint ventures, the largest of which — Otis China — it has majority-owned since 1998. In October 2025, Otis bought out the remaining minority partner in its Otis Electric subsidiary, bringing it to 100% ownership under Otis China. The filing explicitly flags U.S.-China tensions, trade policies, export controls, and tariffs as meaningful risks to the business.
The workforce is heavily concentrated in Asia, reflecting the region's importance to both manufacturing and field service. Of Otis's approximately 72,000 employees, 45% are in Asia, 34% in EMEA (Europe, Middle East and Africa), and 21% in the Americas.