Residential exceeded expectations in the second quarter, said Regnery, with Q2 bookings up in the high 20s and organic revenue up in the low teens compared with the prior year. “We expect second-half tailwinds, driven by market fundamentals and easier comparisons,” he said. 

Year to date, Trane’s residential business is up mid-single digits, and Regnery said the company expects that pace to continue through the rest of the year.  

“When we came into the year, we thought that residential could be even down a bit this year. At the end of the first quarter, we revised it to flat. We’re very confident with our guide that this will be a mid-single-digit growth number for us in 2026, and we’ll see how that carries forward for positive momentum into 2027.” 

The company remains more focused on replacement rather than residential new construction. Regnery said new construction represents a percentage “in the teens” of Trane’s residential business and is generally concentrated among smaller builders constructing custom homes. 

Distributor inventory also appears balanced, especially compared to the fourth quarter of 2025, when Trane cut residential production days by 30% to bring distributor inventory back to appropriate levels.  

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“We came into the year with the right level, and the good news is it’s still at the right level, which is reassuring for us in the back half of the year,” said Regnery. 

Chris Kuehn, executive vice president and CFO, added that, “Year to date, sell-in is really approximately equal to sell-through. Inventory is at a good spot at the end of the quarter.” 

Trane’s commercial HVAC businesses led the quarter, particularly in the Americas, where bookings reached an all-time high, rising 50% year over year, while organic revenue increased by a percentage in the low teens, said Regnery.  

“Applied bookings were up 130%, marking our fourth consecutive quarter of growth above 100%. On a two-year stack, applied bookings are up more than 4x. We are fueling robust growth for 2026 and beyond.” 

Data centers are the main driver, and Trane is working with hyperscale and colocation customers on a full portfolio of thermal management systems that includes chillers, air handlers, coolant distribution units (CDUs), and controls. 

“With our portfolio, we’re going to optimize to ensure that the data center is getting the right mix of water temperatures so that it can operate in the most efficient way possible,” said Regnery. He added that smart chillers will help manage those temperatures by shifting between free cooling, which uses ambient air, and mechanical cooling when compressors are needed to fine-tune the water temperature. 

Demand also extended beyond data centers. Trane tracks 14 commercial verticals, and Regnery said all posted second-quarter order growth above 20%.  

“Year-to-date, we had growth in 11 of 14 verticals from an order standpoint. Most of those 11 were double-digit growth,” he said. 

Trane raised its full-year organic revenue growth to approximately 9% and now expects reported revenue to increase about 11.5%. Third-quarter organic revenue is expected to rise approximately 10%. 

“Our 2026 outlook has strengthened, reflecting accelerating growth in the second half, driven by continued strong execution,” said Regnery. He added that commercial HVAC momentum remains “robust,” supported by strong bookings, pipeline activity, and backlog, while residential is expected to deliver modest growth during the second half. 

“It’s going to be not only a very strong second half for us, but we’re going to carry a lot of momentum into 2027,” said Regnery.