Good morning. Welcome to the Trane Technologies Q1 2024 earnings conference call. My name is Brianna, and I will be your operator for the call. The call will begin in a few moments with the speaker remarks and the Q&A session. At this time, all participants are in a listen-only mode. If you would like to ask a question, please press star one on your telephone keypad. We kindly ask that you limit yourself to one question and one follow-up. I will now turn the call over to Zac Nagle, Vice President of Investor Relations. Thanks, operator. Good morning, and thank you for joining us for Trane Technologies' first quarter 2024 earnings conference call. This call is being webcast on our website at tranetechnologies.com, where you'll find the accompanying presentation. We're also recording and archiving this call on our website. Please go to slide 2. Statements made in today's call that are not historical facts are considered forward-looking statements and are made pursuant to the safe harbor provisions of federal securities law. Please see our SEC filings for a description of some of the factors that may cause our actual results to differ materially from anticipated results. This presentation also includes non-GAAP measures, which are explained in the financial tables attached to our news release. Joining me on today's call are Dave Regnery, Chair and CEO, and Chris Kuehn, Executive Vice President and CFO. With that, I'll turn the call over to Dave. Thanks, Zac, and thanks everyone for joining today's call. As we begin, I'd like to spend a few minutes on our purpose-driven strategy, which drives our engaging, uplifting culture and enables our differentiated financial results over time. Our purpose is centered on creating a more sustainable world, and our strategy is aligned to powerful megatrends like energy efficiency, decarbonization, and digital transformation. Customer demand continues to increase as the need to address climate change becomes more urgent. We need creative solutions and game-changing innovation to bend the curve on global warming, and that's where Trane Technologies leads. Our relentless innovation, proven business operating system, and high-performing culture enables us to consistently deliver a leading growth profile, strong margins, and powerful free cash flow. The end result is strong value creation across the board for our customers, our shareholders, our employees, and for the planet. Please turn to slide number four. In the first quarter, we extended our track record of strong execution. Our global teams delivered robust performance across the board. Quarterly bookings of more than $5 billion were at an all-time high and up 17% organically. Organic revenues were up 14%. Adjusted operating margins were up 230 basis points, and Adjusted EPS was up 38%. First quarter booking strength was again led by our commercial HVAC businesses globally, which were up over 20%, with growth of more than 30% in equipment and mid-teens in services. Bookings in our Americas commercial HVAC business were once again a standout, up 30%, with more than 40% growth in equipment and more than 15% in services. Booking strength was broad-based, with growth in nearly all vertical markets. We delivered exceptional bookings growth across our Applied Solutions, leveraging the power of our direct sales force, deep customer relationships, and leading innovation to capitalize on increasing project complexity in high-growth verticals. Our commercial HVAC pipeline remains robust around the world, and we see tremendous growth opportunities well into the future. Our strong growth profile provides us with excellent optionality to accelerate key investments in 2024, while delivering strong leverage, EPS, and free cash flow. We put a number of high ROI investments in flight in the first quarter. With a focus on future growth, these investments include product innovation, increased capacity, sales and service excellence, digital and automation. Our bookings performance further strengthens our position for 2024 and increasingly for 2025. Q1 ending backlog of $7.7 billion is up 10% from year-end 2023, and we increased our backlog for 2025 and beyond by $800 million to a total of $1.8 billion, increasing visibility to future growth. Based on our Q1 results and expectations for continued strong performance, we're raising our full-year revenue and EPS guidance. Chris will cover the details in a few minutes. Please go to slide number 5. Demand for our innovative solutions continues to be exceptional, with a book-to-bill of 120% on strong organic revenue growth of 14%. In the Americas segment, our commercial HVAC business delivered strong performance across the board. Bookings were up 30% in the quarter and up over 60% on a 3-year stack, led by our Applied Solutions portfolio, which we estimate carries an 8-10 multiplier of higher-margin services revenue over the life of the equipment. Backlog for Applied Solutions continues to grow, which bodes well for future growth. Commercial HVAC revenues were up mid-20s, with more than 35% growth in equipment and mid-teens growth in services. The compounding of services revenue year after year provides strong growth in good times and is resilient in more challenging macro conditions. We're investing heavily in sales and services excellence programs to strengthen our business for the long term. Turning to residential, bookings were down low single digits, and revenues were up low single digits. The business performed stronger than our initial expectations for Q1, and we're cautiously optimistic moving forward. Our transport businesses performed as expected, with bookings down low single digits and revenues down mid-teens. While we see the down cycle in transport as modest overall, the business is facing tough comps from 2023. A +20% growth comp in the first half and a -20% growth comp in the second half, which impacts the optics in the near term. Net, in 2024, we expect to see a soft first half and a strong second half. Turning to EMEA, the region performed in line with our expectations. Commercial HVAC bookings and revenues were strong, up low teens and up high single digits, respectively, while transport bookings and revenues were down low single digits. The book-to-bill was very strong at approximately 120%. Turning to Asia, the team delivered strong performance consistent with our expectations for the quarter. China remains very strong, with bookings up more than 20% and revenues up high teens. Asia's book-to-bill was also very strong at approximately 120%. Now, I'd like to turn the call over to Chris. Chris? Thanks, Dave. Please turn to slide number 6. This slide provides a snapshot of our performance in the first quarter and highlights strong execution top to bottom. Organic revenues were up 14%, Adjusted EBITDA and operating margins were up 200 basis points and 230 basis points, respectively, and Adjusted EPS was up 38%. At an enterprise level, we delivered strong organic revenue growth in equipment and services, both up low teens. Our high-performance flywheel continues to pay dividends, with relentless investments in innovation, driving strong top-line growth, margin expansion, and EPS growth. Please turn to slide number 7. At the enterprise level, we delivered robust volume growth with strong incrementals, positive price realization, and productivity that more than offset inflation. In our Americas segment, we delivered about 12 points of volume and about 3 points price, with our Americas Commercial HVAC business delivering very strong volume growth of approximately 20 points. Strong adjusted operating margin expansion of 240 basis points was driven by strength in our commercial HVAC business, which more than offset the expected impact from revenue decline in our transport business. In our EMEA segment, we delivered about 3 points of volume and about 1 point of price, with stronger volume in our commercial HVAC business. Adjusted operating margins were up 30 basis points for the segment and stronger when you consider the impact of acquisitions and FX in the quarter. Excluding FX currency losses related to the devaluation in the Egyptian pound in the quarter, EMEA EBITDA margins would have been 19.5%. The Asia segment delivered mid-teens revenue growth, almost exclusively from higher volumes. Strong volume, productivity, and modest price contributed to 310 basis points of adjusted operating margin expansion. We reinvested heavily back into each business in the first quarter and expect to ramp these investments through the year to drive growth well into the future. Now, I'd like to turn the call back over to Dave. Dave? Thanks, Chris. Please turn to slide number 8. Our end market segment and business unit outlook is largely unchanged from our Q4 earnings call, with a couple of notable differences. First, our Americas Commercial HVAC business had a very strong quarter, stronger than we expected, despite a tough comp of mid-teens revenue growth in the first quarter of 2023. We're encouraged by the strong start for the business, especially when you take into account the exceptional 30% bookings growth and a 125% book-to-bill ratio on mid-twenties revenue growth in the quarter. We expect the Americas Commercial HVAC business to remain strong throughout 2024 versus increasingly tough comps from 2023 as we move throughout the year. Second, our residential business performed stronger than we expected in the first quarter. We expected the business to be down modestly on continued destocking, and we believe the EPA clarification on sell-through helped to mitigate some of the independent wholesale distributors' concern heading into the season. While we're pleased with the results, the first quarter for residential is typically a very small percentage of the year and doesn't provide a sufficient read-through to the balance of the season. We believe it's prudent to move through Q2 and gain more visibility before extrapolating too much from Q1. All other businesses performed as expected, and the outlook for the year are unchanged. We provided additional details on the slide for your reference. Now, I'd like to turn the call back over to Chris. Chris? ... Thanks, Dave. Please turn to slide number 9. Our initial 2024 guidance reflected optimism about key end markets and our ability to outperform. While we're only 1 quarter in, our exceptional bookings, revenues, and backlog in our commercial HVAC businesses strengthen our conviction that 2024 will be another year of robust top line and bottom line growth. We're raising our organic revenue guidance by 2 percentage points to 8%-9% from 6%-7% prior. We're also raising our full year adjusted earnings per share guidance by $0.30 at the midpoint, and raising the low end of our guidance range above the high end of our prior guidance range. Our new adjusted EPS guidance range is narrowed to $10.40-$10.50, up from $10-$10.30 prior. Embedded in our guidance is our philosophy around our value creation flywheel, which builds in relentless high levels of business reinvestment to drive end market outgrowth, healthy leverage, and strong free cash flow. We expect to see investments continue to ramp in the second quarter and into the back half of the year, accompanied by leading growth and strong incrementals. We continue to expect about 1 point of growth from M&A in 2024, with a negative impact of approximately $30 million to adjusted operating income for the full year, or a negative impact of about 5 points to reported leverage versus organic leverage. The impact is primarily related to the technology acquisition, Nuvolo, which carries non-cash, accelerated, intangible amortization of approximately $25 million, plus year one acquisition and integration-related costs. We also expect a negative impact to revenues of about 1 percentage point from FX in 2024. FX is expected to offset the point of M&A revenue growth on a reported basis, meaning our organic and reported revenue growth guidance is now the same at 8%-9% for 2024. There's no change to our organic leverage target of 25%+ for the year, consistent with our stated long-term target. Turning to cash, we had a strong start to free cash flow generation in the first quarter, and we expect 2024 to be another year of free cash flow conversion of 100% or greater. For the second quarter, we expect revenue growth of approximately 8.5% and Adjusted EPS of approximately $3.05. Please see page 17 for additional information that may be helpful for modeling purposes. Please go to slide number 10. We remain committed to our balanced capital allocation strategy, focused on consistently deploying excess cash opportunities with the highest returns for shareholders. First, we continue to strengthen our core business through relentless business reinvestment. Second, we're committed to maintaining a strong balance sheet that provides us with continued optionality as our markets evolve. Third, we expect to consistently deploy 100% of excess cash over time. Our balanced approach includes strategic M&A that further improves long-term shareholder returns and share repurchases as the stock trades below our calculated intrinsic value. Please turn to slide number 11, and I'll provide an update on our 2024 capital deployment. Year-to-date through April, we've deployed $540 million in cash, with $190 million to dividends and $350 million to share repurchases. We have $2.1 billion remaining under the current share repurchase authorization, providing us with strong optionality as our shares remain attractive, trading below our calculated intrinsic value. Our M&A pipeline remains active. We continue to see potential opportunities for value accretive M&A as we did in 2023, where we made key strategic investments to accelerate our progress across energy services and digital solutions, industrial process cooling, and precision temperature control technology. For 2024, we expect to deploy approximately $2.5 billion in cash. Our strong free cash flow, liquidity, and balance sheet give us excellent capital allocation optionality moving forward. Now, I'd like to turn the call back over to Dave. Dave? Thanks, Chris. Please go to slide number 13. As discussed, our transport performance in Q1 was as expected, and there's no change to our outlook for the year. The overall markets are expected to be down modestly, and we expect to outperform in both regions. We've continued to provide this slide in the deck for your reference. Please turn to slide number 14. We operate our transport business for the long term, and while we're moving through a modest downturn in 2024, this is a great business with a bright future. ACT projects a strong trailer market rebound from 2024 into 2025, up 19%, and projects continued growth through their forecast horizon in 2029. We have a diversified transport business globally, with opportunities to grow across the portfolio. With leading innovation, strong execution through our business operating system, and a world-class dealer network, we're well positioned to outperform in any market environment. Please go to slide number 15. In summary, we are well positioned to drive differentiated growth and value over time. Our leading innovation, proven business operating system, and unmatched culture enables us to consistently deliver top-quartile financial performance over the long term while continuing to reinvest in our business. I believe our best days are ahead. We have the team, the strategy, and the track record to deliver a leading performance in 2024 and differentiated shareholder returns over the long term... Now, we'd be happy to take your questions. Operator? Thank you. We will now begin the question- and- answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you'd like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. In the interest of time, we kindly ask that you limit yourself to one question and one follow-up question. Thank you. Your first question comes from Andy Kaplowitz with Citigroup. Please go ahead. Good morning, everyone. Hey, good morning, Andy. Good morning. Dave, can you give us a little more color into your order momentum and backlog growth? You obviously enjoyed significant acceleration orders, and you mentioned the strength in applied. So can you give us any more color into how much of the continued Americas orders acceleration is coming from data centers? Do you think you can continue to grow your backlog from here? And maybe your thoughts on the duration of this order cycle if it is, in fact, data center-led. Yeah. Thanks for the question, Andy. Good question. Look, in the quarter, we saw broad-based growth, and it wasn't concentrated necessarily in any one vertical. I mean, we certainly had strength in data centers, we certainly had strength in education, healthcare, high tech, industrials. It was almost hard for us to find a vertical that we didn't grow in. We did have a bit of weakness in, I guess you would say, conventional office, and some in lodging, but for the most part, it was broad-based growth, and it was really on a global level. So a lot of strength in our commercial HVAC businesses, and, you know, the good news is our pipeline is also very strong. So this would be before an order actually comes in to be a booking, this is what our sales teams are working on. That continues to be very strong as well. So look, it's a lot of innovation. I'm certainly proud of what the team's been able to deliver, and we're executing at a very high level right now. Dave, we definitely can appreciate that. So on that note, you know, organic incremental margins continue to trend higher, you know, than your 25%. Given the strength in your markets and the overall ability to execute, why isn't 30 or 35, as you've been able to record for a while now, the new 25 for, for Trane? And then where are you on, let's say, the slope of productivity projects that you've been undertaking? Because we know you've been really focused on productivity after not being able to do as much during the pandemic. Hey, Andy, it's Chris. I'll start, and then Dave may jump in. So, you know, as we think about the first quarter, investments back into the business began to ramp really stronger into February and March than, say, the start of the quarter, and our run rate exiting Q1 is stronger than when we started. The pipeline for investments continues to grow, and these are across multiple categories. So to your question, we really like the long-term framework of the 25% or better incrementals. That's what we're continuing to guide for 2024. But the investment pipeline and where we can see the market outgrow here and the order rates and the revenue rates, I think just tells us we wanna keep investing back in the business. You know, think of these investments again around innovation, sales and service investments that Dave talked about in the comments. These are upfront tools as well as people investments, making sure we've got capacity investments, automation in the factory, digital, the list goes on, and we wanna make sure we're always funding back into the business. On the productivity side, we're not there yet. We're getting better on the gross productivity, but there's still more opportunities for us going forward. Thanks for that, Chris. Great quarter. Thanks, Andy. Thank you. Your next question comes from Scott Davis with Melius Research. Please go ahead. Hey, good morning, guys. Dave, Chris, and Zac- Hi. Good morning, Scott. Hey, guys, just following up on Andy's question a little bit, but can you mark the market where you're at on, on data center capability? I know you made that investment in LiquidStack, I think it's called. Do you have kind of... Are you developing kind of soup to nuts capabilities in the data center to be able to handle some of these newer, hotter chips? Yeah, great question, Scott. I think, you know, we've been very well positioned in data center vertical for a long time, and I think you know this, but technology tends to move pretty fast in this vertical compared to others. And, and we're certainly aware of these new technologies that are being developed really at the terminal side of cooling. So think of that as, you know, direct cooling to the chip, or think of it as immersion cooling at the rack level. One of the things that we do really, really well at Trane Technologies is we think about systems. And if you think about a data center's cooling systems, you need to think about the entire system. So some of it certainly is what we would call the terminal side, and that's what we just referred to, but these systems also require sophisticated air handling. They also require high-efficiency chillers. And we look at the entire system to really help the customer think through the entire energy needs for that, for the whole data center. The other thing that's really emerging, you're gonna hear more about this, is we think of the data center, think of it as a thermal management system. So I know you know this, but when you're cooling a space, you're removing heat from it. Data centers have a lot of heat. What do you do with that heat that you're removing? Conventional thinking would be, it gets, you know, it gets emitted back out into the atmosphere, but how can you repurpose that heat? And we've done some projects-... Still early stages here, where we're creating district heating loops from the heat that would normally just be wasted and reusing it as an asset. So it's a very dynamic space. It's obviously growing at a nice clip. It will grow at a nice rate for the continued future, and we're right in the middle of it, and it's always been a very strong vertical, and it will be in the future. That makes sense, Dave. And just, you know, a little bit of a pie in the sky here, but does it make more sense to think about you guys in a data center partnering with somebody like Vertiv or explicitly competing against them? Because it seems like you both have very different capabilities, but obviously overlap on some critical apps there. So how do you guys think about that opportunity when you think about these giant data centers—like a 1 GW data center or something where the engineering capabilities would presumably almost rely on maybe more than one supplier, not just one. Is that accurate, Dave, or am I thinking about it wrong? Yeah, I wouldn't call out any particular company here, but I would tell you that we have technology partners that we work with. 'Cause you're spot on. It's a cooling system, right? It's no different than... You know, think about a system that exists within a building, right? We may not have every component, but we would have a partner that would have that component, but we would help integrate it into a system that would be operating in an efficient way for the customer. Very fair. Thank you. Best of luck, guys. Congrats on the start to the year. Thanks, Scott. Your next question comes from Julian Mitchell with Barclays. Please go ahead. Hi, good morning. Hey, Julian. How you doing? Hey. Good, thank you. Maybe just the first question on the organic sales guide for the year. So it looks like the first half, you're up maybe about 11%, based on the guidance. You know, the full year, you've got up sort of, you know, high singles, so second half is there at maybe 6% or so. Is the way to think about that and understand we haven't yet seen cooling season and so forth, but is the way to think about that revenue guide framework, it's a big slowdown in commercial HVAC versus Q1 because of the extremely tough comps. 'Cause I would've thought Resi and TK would look better year-on-year sales in the back half versus the first half. So, with the total enterprise sort of going from 11 to 6, is it just really that commercial HVAC piece just battling the tough comps? Hey, Julian, it's Chris. I'll start. It is tough comps for commercial HVAC, and especially the Americas. They're gonna have a great year on a full year basis, but when you think about go back a year in the first quarter of 2023, the growth there in commercial HVAC Americas was around mid-teens, and then by the fourth quarter of last year, the growth was mid-twenties. So think of that as a 10-point increase in terms of growth and revenue throughout last year. So the comps do get tougher as we work through 2024. But again, they're gonna have an outstanding year this year. But, you're right, it is a bit of a tough comps in commercial HVAC. Transport Americas, we do expect the second half to be stronger than the first half. That is also due to tough comps. The business was up 20% the first half of 2023, down 20% in the second half of 2023, so the comps get easier as we go throughout the year. But you're right, you've dialed it in a little bit there. And look, we feel comfortable with the guide that we've put out there now, and our ability to meet or exceed that guide on the full year. But let us get through another quarter of results here in the second quarter. As you know, the first quarter within Trane Technologies is generally our smallest quarter of the year. Let us get through the second quarter. We'll give a better insight on the second half of the year that time. We feel very confident with the guide that we just released today. Thank you, Chris. Maybe just my follow-up would be on the sort of price and price mix outlook. So I think in the first quarter, maybe price was about a 2-point tailwind to revenue. Maybe remind us kind of what you're embedding for the year as a whole. And has there been any shift in the expectations on the sort of price mix tailwind in light commercial and Resi HVAC from the refrigerant change and the sort of various, you know, EPA movements on that? Yeah, Julian. So, in the first quarter, at an enterprise level, we delivered about 3 points of price. Those comps get tougher as we move throughout the year, as we start getting to a little bit more of a normalization of price. Think of the full year now, we're guiding to about 2 points of price. It was certainly a question on the call that we had a few months ago in our full year guide on price. We thought we could maybe do a little bit better there, and delivering on Q1 gives us the confidence to raise our full-year revenue by 2 points. Think of that as a point of price and a point of volume. In the Americas, we've led with price in the Americas. That's generally been the model within the company, and within that, commercial HVAC would've been stronger. As we think about, you know, price mix and maybe inflation a bit, we're very confident in terms of delivering the, you know, 20 or 30 basis points, maybe better in terms of price cost, price versus inflation on the full year. That's one of the best parts, if I think about our business operating system, has been our ability to remain nimble with pricing. You can say that we've got the right inputs, and as we think about commodities and how they kind of play out over the next year to two years, remaining nimble in terms of pricing is something that that it was in our business operating. Your comment on residential, we're not—Dave, do you wanna cover that? Yeah. We don't have a lot of R-454B, at least in the Americas, built into our guide, okay? We're obviously ready from a product standpoint, and we'll be launching those products as we go through the year. But we're not anticipating a lot of volume in 2024, and we'll see how the year progresses for 2025. On one of the things, too, on R-454B is I saw a couple of pre-comments come out about, you know, being a new refrigerant. I just wanna make sure everyone's clear. We've been using R-454B in Europe for over two years now, so this is not a new refrigerant for Trane Technologies. We're very comfortable with the refrigerant, and we've had it in our portfolio for some time. A lot of it baked in the Americas in our time. Great. Thank you. Okay. Thanks, Julian. Thanks, Julian. Your next question comes from Gautam Khanna with TD Cowen. Please go ahead. Hey, thanks, guys, and great results. Thank you. Thanks. Good morning. I wanted to ask if you could opine again on what you think happens with Resi average Resi pricing next year, given the 454 transition? You still think it's up kind of 10%-15%, or just how would you characterize? Yeah, we have... It's a good question, Gautam. Hope all is well with you. Look, we don't anticipate a lot of 454B product in 2024, as I just said. That will obviously ramp up in 2025. We're not projecting 2025 yet. From a pricing standpoint, we're gonna. We'll announce pricing when we release the products. But I think what you've heard from others is probably in the ballpark as to what to expect from a pricing standpoint. We're gonna see how the year plays out, okay? We don't see a big pre-buy happening in at the end of the year for 410. Maybe you'll get a minor one with some high runners. So it's really gonna be... Nobody wants to get stuck with inventory, and it's just we have to watch out to see how the balance plays out, and we'll give you an update as we move through the year. Appreciate it. Thank you, guys. No problem, Gautam. Your next question comes from Joe Ritchie with Goldman Sachs. Please go ahead. Hey, guys. Good morning, and yeah, stellar results. Thanks, Joe. Just, maybe just taking it back to the data center discussion for a second. Is there a way to maybe parse out or range or on a relative basis, kind of give us, like, any sense for your dollar content on a data center and what the opportunity is? Yeah. You start talking about averages, which are always dangerous, Joe. I mean, I've read reports where people have estimated the 3%-5% range. You know, in some cases, I'd say they're in the ballpark, and then you get into some hyperscale that may have a different configuration, so... But it's not that far off. Look, we're very strong in this vertical. We have been for a while, and it's gonna have a lot of growth in the future, and which is exciting. But understand, it's one vertical of many verticals that we play in, and in the first quarter, we had broad-based strength, so it wasn't just focused on data centers. Got it. That's, that's helpful, Dave. And, and maybe that follow-on question for the other, other things that are strong, right? You had, an electrical peer throw out a, you know, $1.2 trillion mega project number today. It seems like there's just a lot of investment on the come. At the same time, like, you do have some, some other funding, like ESSER funding, as an example, that might be coming down. So just, just maybe high level, just talk to us about what you see in terms of, like, your quoting activity or what you see coming through the pipe over the next couple of years. Yeah. I'll start with mega projects. I mean, I think that, you know, mega projects are happening in verticals that we've always been very strong in, so it's always difficult to say what's additive versus what's ongoing strength in a particular vertical. That said, our team is tracking over 300 mega projects, and we've had some orders that have been received. However, the majority are still in the pipeline, as these are typically longer duration projects to close. A lot of these projects that are deemed as mega projects are global in nature, which gives us really a competitive advantage with our direct sales force because we're able to triage decision-makers and provide technical support in different parts of the world, so, well, well in tune to what's happening with mega projects. As far as ESSER goes, look, ESSER funding, the way it's designed right now, you can take an order up until September of this year, and it has to be fulfilled within the first quarter of 2026. And we've done very well with ESSER funding, but we don't believe that the whole education vertical, you know, stops after ESSER funding. There's also IRA funding that's available, and there's, of course, the municipal bond process that's always been very robust in the past. So look, the education vertical has always been strong for Trane Technologies, expected to be strong in the future as well. Super. Thank you. All right. Thanks, Joe. Your next question comes from Steve Tusa with JP Morgan. Please go ahead. Hi, good morning. Hey, good morning. Good morning. Some very nice orders. Congrats. Thank you. Thank you. Can you just talk about what you're seeing on applied versus light commercial? Just orders and revenues. Yeah. I mean, obviously, you know, in the Americas, which I think is where your question's focused, we were very strong in equipment overall. I mean, our order rate for equipment was up over 40%, and we saw strength really in both applied and unitary. And, you know, in the past, I've said applied's been a lot stronger. This time, they were pretty close. So there's a lot of strength out there, and that makes sense because if you look, we had broad-based growth across really almost all verticals. And a lot of those verticals are served with different applications, so it was very strong. I guess, are there particular verticals in, like, commercial that, you know, you think you're gaining share in? Because, you know, your main peer had orders down pretty dramatically there. Yeah, I don't, I can't speak to a competitor because you get comps from one year to another. I would just tell you that, you know, if it broad-based, you're gonna have some verticals that are more on the applied side, but some verticals are more on the, on the unitary side. So think about education, it's probably a 50/50 split. Conventional office typically tends to be more on the unitary side, not always, but tends to be. Retail will be on the, on the rooftop side. But, look, we're very happy with the performance we had in Q1, and, you know, I, I don't remember a quarter when I was talking about 40% order growth, and it was as broad-based as we saw in Q1. Right. And then just one last one. On Resi, can you just break down the in that business for the quarter, just the price, mix and volume for the quarter? Yeah, Steve. Yeah, revenues were up low single digits. Think of them as very low numbers, contributing price, volume, in terms of residential. It just, we start getting a lot of small numbers there and up low single digits. It did better than we expected, as Dave talked to earlier. You know, think of price as really de minimis. Maybe volume was up around 1 for Resi. But, you know, let's see, we're just starting the cooling season here. Let's get through another quarter, and we'll see how the year plays out for residential. Okay, great. Thanks for the color. Thanks, Steve. Yeah, thanks. Your next question comes from Deane Dray with RBC Capital Markets. Please go ahead. Thank you. Good morning, everyone. Hey, Deane, how are you? Good morning. Hey, doing real well. Thank you. So those were pretty positive comments coming out of China. So could you kind of give us a sense of where the demand is, the outlook? 'Cause we have heard some mixed signals about, you know, at best, stabilizing, but it sounds like you're seeing some pretty strong growth. Yeah, the team there continues to execute at a very high level, very seasoned team, been in place for, they have a lot of tenure with the company. A lot of strength in pharmaceutical, healthcare, high tech, data centers, which is really where our portfolio plays well with our Applied System. So, very happy with what we saw. Now, China is a small percentage of the enterprise, you know, in the 5% range, but a lot of strength there, which is encouraging. That's real helpful. And then, can you give us a sense of where you stand on your services mix? Refresh us on the targets, and how do you think that plays out for this year? Yeah, it was. It's a great question. I was telling Chris, I think we're gonna have... In the Americas, we always said our service business was 50% service and 50% equipment, but with our equipment growth, we gotta go back and look at the calculation. Look, we had a very strong services business in the Q1. At a global level, it was up in the low teens. In the Americas, it was up over 15%, and there's a compounding effect that's going on there, and this is the sixth year where we've had service growth of low single digits. So it's a. We've invested heavily in this. I think it's one of the areas that sometimes gets underappreciated in Trane Technologies, but I tell you, it's a third of our business. It's very resilient, and it is an enabler, and that team continues to execute at a very high level and, expect it in the future as well. Yeah, Deane, the six years, you know, up high single digits growth in services. Last year was up double digits, and Dave keeps pressuring us to kind of move to the double digits. But, I'll tell you, it's, you know, the resiliency, as he called out, and we like the margins there, and nice start to the year in the business. Thank you. Thanks, Deane. Your next question comes from Nigel Coe with Wolfe Research. Please go ahead. Thanks. Thanks very much for the question. Good morning, and I don't often say this, but, great quarter, fantastic results. Thanks. I guess, sorry, I've been going back and forth, the different calls here, but so maybe just step back. I mean, what surprised you to the upside this quarter? I mean, obviously, organic came in a lot better, really strong commercial HVAC trends, but specifically, what really surprised you during this quarter? Was it just backlog conversion? Anything, any color there would be helpful. ... Yeah, I think there was really two things that were to the upside. One was our commercial HVAC business in the Americas. It really performed, it performed better than expectations. Just a lot of demand for our innovative products, and the team executed extremely well. The other upside was in our residential business. Look, we thought that was a business that was gonna be down low single digits, maybe even mid-single digits in the beginning of the year for Q1, with destocking that was gonna occur. I think that where we kinda got help there was the EPA coming out with their clarification on the sell-through for 410, and gave confidence to our independent wholesale distributors that they should be stocking up and getting ready for the season, which is what we saw. So those would be the two big areas that kind of where we saw the upside. You know, the rest of the world really played out the way we thought. You know, Europe, strength in our commercial HVAC business continues. Our Thermo King business, look, it's gonna be a modest downturn in Thermo King in the year. We'll do better than the markets, but that's exactly what we saw play out in the first quarter. Asia, you know, pretty much as we thought, maybe a little bit stronger in our commercial HVAC business, but it really played out as expected in the rest of the world. And then, my follow-on is just the, you know, the standout here is the, you know, just the resilience of the commercial HVAC orders and backlog, especially in the backdrop of such, you know, weak, you know, Dodge starts, API, et cetera. So just wondering, you know, are there, you know,... Obviously, there's pockets of strength in data center, et cetera, but, you know, is there increasing evidence of just more proactive replacement demands, you know, CO2 emission targets really driving demands in any color? Yeah, I haven't... I can't get—I can't answer that specifically. I haven't looked that way, but I would tell you that we continue to see a very strong pipeline. And so this would be what our sales force is actually out working on, that they're putting in our CRM systems, and that remains very robust. So there's a lot of activity out there. And I see—I hear the disconnect, too, when you look at API or some of the other macro numbers. You just have to look at—We don't look at just one, okay? You have to look at several, and some are aligned to one vertical versus another vertical. But look, we saw very strong demand, broad-based, and the pipelines are still strong. Great. Thanks, Dave. Okay, thanks, Nigel. Your next question comes from Andrew Obin with Bank of America. Please go ahead. Andrew? Can you hear me? I can. How are you? Hey, good morning. Hi, how are you? How are you? Good morning. Just a question. As we think about, you know, cooling for semiconductor plants and data centers, right? It seems that the scale of the projects, it's going up. And the question I have for that, A, does this provide an opportunity to provide more sophisticated solution to your customers and also to capture more value, to Trane? And second, what are you doing to your aftermarket support organization to take advantage of that? Yeah, we talked a little bit about data centers earlier, but look, this is a vertical that tends to move faster from a technology adoption than others. And we're working closely with partners and data center customers to understand what the trends are, and I would tell you, we're right in the middle of it. In a data center, Andrew, look at the entire system, okay? We like to look at things at a system level, and you're hearing a lot right now on the terminal side of data centers, so that would be like direct cooling to the chip or immersion coolings. We look at the entire system, so the air handling side of it, as well as the sophisticated chillers, the high-efficiency chillers with next-gen refrigerants that are also required. I think where you're gonna hear a little bit more is on the thermal management side of a data center. They produce a lot of heat. That heat is taken out of the data center. How can you repurpose it? And that's some of the technology that we're in discussions, kind of at a thought leadership level as to how we can take an asset and heat and turn it into an asset in the future. Yeah, my question, I think, was more basic. I was just thinking that these systems are bigger and more complex, they're more energy-hungry, so more opportunity for your sales, more need for your customers to partner up with you and more opportunity for you to sort of provide these package energy-saving solutions. That's where I was going. You're right on, Andrew. All opportunities, and it's a growing vertical. Gotcha. And, and then just follow up on M&A. You know, you guys have been pretty active over the past couple of years, but, you know, looking at the market, you know, the market is on to the fact that, once again, manufacturing, clean rooms bio pharma, all the areas you guys have been focusing on, but, you know, these are, I think, are getting hot, pardon my pun. So what, what's the environment looking like for, these bolt-ons? What's your ability to sort of pursue targets at reasonable valuations? What does the pipeline look right now? What are you interested in? Thank you. I'll start, it's Chris. Yeah, pipeline remains very active. You know, it's sometimes episodic when an M&A transaction closes, so, you know, quarter by quarter may be hard to call, but over the course of a year, I think, the pipeline remains very active. We're very happy with the acquisitions we've done over, say, the last 18, 24 months, right? You'd properly describe them as a bolt-on bit of strategy. Think of that around investments in the channel and investments in technology, and in some cases, it's both. It's taking a great technology that has a limited channel and applying it to our deep channels in Europe and/or in the Americas. So we've been very successful with that strategy. As it looks at the pipeline today, you know, we're gonna remain disciplined. We've got our hurdle rates, and as we think about what's constructive to be EPS accretive in three years, ROIC accretive in three years. But I'll tell you that, we've got a great balance sheet to really deploy to not only acquisitions, but also deploy if the cash isn't available for M&A, over to share repurchases, as we see the stock trading below our calculated intrinsic value. So if you go back, you know, even six, seven years ago, with an acquisition in Europe with Thermocold, and you really started out with our multi-pipe chillers and thermal management systems and how that's grown over time now, I think, to our sixth or seventh generation of thermal management systems, it tells you that we can take that early-stage technology and really grow it over a longer period of time. We've got the people, we've got a great—we have a great sales team, we have a great service team. That's where some of those investments are going as well this year, is to make sure we have all the infrastructure and support to keep growing those businesses. I'll tell you, we've got a great team in each of our regions that can integrate acquisitions. When you think about the challenge of an acquisition, a lot of time, it's the, you know, the success is dependent on how well you integrate. And we don't think of it as Trane Technologies is acquiring, and let's take our best of Trane to the business. It really is also what are we learning from the business we've just acquired and bring it into our organization? I'll tell you, some of our recent acquisitions, it's spot on with taking the learnings of the businesses we've acquired, bring them into the Trane family, and how do we replicate that across 40, 50 plants across the globe. I'll tell you, we're bullish in this area, so, I'd just say the pipeline remains strong. Great answer. Really appreciate it. Thanks a lot. Thanks, Andrew. Thanks. Your final question comes from Noah Kaye with Oppenheimer. Please go ahead. Hey, hey, thanks. Dave, this is gonna be a broad question, but it goes to what you've discussed around the increasing complexity in Applied. When we think about the customer value proposition, and I understand there are many dimensions, it's gonna differ across verticals. How does the increasing complexity play into the customer value proposition? Maybe give us the two or three biggest dimensions that that really speaks to and where that creates some sustainable competitive differentiation for the company. Yeah, great question, Noah. I think it all starts with our direct sales force that's highly technical, right? They understand the applications, and a lot of times, helping the customer think through what the best solution is for whatever their need may be. You know, I always tell people, "We don't sell products, we sell solutions." And that's the way our account managers behave with customers. We don't... You know, it's as the sophistication of these products continue to increase, obviously, our strength shines, really on a global basis. A lot of the decision-makers on, especially some of these mega projects right now, are on a global basis. And because we have this direct sales force globally, we're able to really triage the decision-makers and help them think through the technical side. And then, of course, the downstream effect is these products are more sophisticated. They require OEM service in the future. So there's a long tail associated with these applied systems that we're selling. And we're investing heavily, too. It's not like, you know, people sometimes think about, as I say, we're investing in capacity. They think of it as, you know, just the plant. Okay, that's part of our capacity investment, but we're also investing heavily in training of our direct sales force, adding to our direct sales force, adding to our service technicians, adding to our engineer skill set, adding to our critical-to-close process, adding to our back offices to make sure we have the right customer support. So it's all inclusive, but it really, you know, the sophistication of these systems as they become more and more engineered, really just plays into the strength we have as Trane Technologies. Thanks, Dave, the follow-up is really around the attach rate of services to those projects, right? I think you've answered it in part, but just quantitatively, how do we think about services attach rates for Applied at this point, and where those grow to, as you see the increasing complexity of the projects you're working on? As I said in my opening remarks, we think about an applied system. You can think about an 8-10 times multiplier of services over the life of that system. And, you know, we wanna be connected to the system, okay? So this, you know, it's no longer just a break/fix. This is all connected solutions. And by the way, the customer wants us connected to the solution. They wanna make sure that it's their asset is always performing the way it was designed. I was telling a group earlier this week that, you know, it's no longer, the system isn't operating properly, the system is using too much energy. Well, we're able to detect that. And that's where, you know, the sophistication goes both ways. It's on the application of the system, but then how you monitor and service that system is also increasing in complexity, and we're right in the leading edge there. Appreciate that. Thanks, Dave. Okay. Thanks, Noah. There are no further questions at this time. I will now turn the call back to Zac Nagle for closing remarks. I'd like to thank everyone for joining today's call. We'll be around, as always, for any questions that you may have in the coming days and weeks. We look forward to seeing many of you on the road, or actually at our headquarters, for in some cases, in the near future here. So thanks again, and have a great day. This concludes today's conference call. You may now disconnect.