Otis Worldwide — Financial Results
Service Segment Is Growing Steadily While New Equipment Shrinks
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Service net sales | $9,442M | $8,894M | $8,397M |
| Service operating margin | 25.1% | 24.6% | 24.0% |
| New Equipment net sales | $4,989M | $5,367M | $5,812M |
| New Equipment operating margin | 4.8% | 6.1% | 6.6% |
The higher-margin Service segment — which covers maintenance, repairs, and modernization — grew organic sales 5% in 2025 and has expanded its operating margin for three consecutive years. Meanwhile, New Equipment organic sales fell 7%, driven by a greater than 20% decline in China and high single-digit declines in the Americas. This shift toward Services is broadly positive, since Service contracts are recurring and far more profitable than equipment installation.
The UpLift Cost-Cutting Program Is Delivering, But Spending Remains Elevated
| 2025 | 2024 | 2023 | |
|---|---|---|---|
| Total UpLift costs incurred | $145M | $96M | $41M |
| Run-rate savings achieved | ~$200M | ~$120M | — |
The UpLift transformation program, launched in 2023, aims to simplify operations and procurement across the business. It has now reached its $200 million annual run-rate savings target, with roughly $70 million in pre-tax savings realized in each of 2025 and 2024. However, the program cost $145 million in 2025 alone, and around $18 million in trailing costs are still expected in 2026 before it winds down completely.
Net Income Fell in 2025 Partly Due to One-Off Items Reversing from 2024
| 2025 | 2024 | |
|---|---|---|
| Net income attributable to Otis | $1,384M | $1,645M |
| Effective tax rate | 24.8% | 15.0% |
| Interest expense (income), net | $196M | $(31M) |
A favorable German tax ruling in 2024 temporarily boosted that year's results with ~$185 million in tax benefits and ~$200 million in interest income — neither of which repeated in 2025. Stripping out those one-time items, underlying operating profit actually improved, with total segment operating profit rising from $2,514 million to $2,614 million. Investors should be careful not to read the headline net income decline as a sign the core business deteriorated.
China Weakness Is a Meaningful Drag on New Equipment
The New Equipment segment reported a greater than 20% organic sales decline in China in both 2025 and 2024, directly driving the segment's two-year revenue slide from $5,812 million to $4,989 million. China's real estate sector (property developers who are the primary buyers of new elevators) has been under severe stress. With no sign of recovery noted in the filing, this remains a key risk to watch for anyone assessing the company's near-term growth prospects.
The Company Is Returning Significant Cash to Shareholders
In 2025, Otis spent $809 million repurchasing shares and paid $647 million in dividends to common shareholders, totaling roughly $1.5 billion returned to investors. A new $2.0 billion share buyback program was approved in January 2025, with approximately $1.3 billion remaining at year-end. Operating cash flow of $1.6 billion comfortably supports this, though cash on hand dropped from $2.3 billion to $1.1 billion after debt repayments and these distributions.