Revenue growth reaccelerated to 7.3% in Q2 2026, with gross margin holding near 30% and operating margin expanding to 14.9% from 12.3% a year earlier, indicating strong operational leverage.
Otis Worldwide Corporation (OTIS) annual income statement — 9-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 |
|---|
| Sales/Revenue | 14.91B | 14.43B | 14.26B | 14.21B | 13.69B | 14.3B | 12.76B | 13.12B | 12.91B | 12.32B |
| Revenue Growth % | 5.24% | 1.19% | 0.37% | 3.83% | -4.29% | 12.09% | -2.76% | 1.57% | 4.8% | - |
| Cost of Goods Sold | 10.41B | 10.06B | 10B | 10.02B | 9.77B | 10.11B | 8.98B | 9.29B | 9.19B | 8.62B |
| COGS % of Revenue | - | 69.72% | 70.15% | 70.49% | 71.36% | 70.67% | 70.37% | 70.83% | 71.15% | 69.96% |
| Gross Profit | 4.5B | 4.37B | 4.26B | 4.19B | 3.92B | 4.19B | 3.78B | 3.83B | 3.73B | 3.7B |
| Gross Margin % | 30.17% | 30.28% | 29.85% | 29.51% | 28.64% | 29.33% | 29.63% | 29.17% | 28.85% | 30.04% |
| Gross Profit Growth % | - | 2.65% | 1.53% | 6.96% | -6.51% | 10.96% | -1.23% | 2.68% | 0.65% | - |
| Operating Expenses | 2.21B | 2.24B | 2.25B | 2.01B | 1.89B | 2.08B | 2.14B | 2.01B | 1.89B | 1.79B |
| OpEx % of Revenue | - | 15.5% | 15.77% | 14.12% | 13.79% | 14.58% | 16.78% | 15.34% | 14.64% | 14.49% |
| Selling, General & Admin | 2.05B | 1.98B | 1.82B | 1.82B | 1.73B | 1.95B | 1.92B | 1.81B | 1.74B | 1.65B |
| SG&A % of Revenue | - | 13.71% | 12.75% | 12.83% | 12.61% | 13.62% | 15.08% | 13.8% | 13.43% | 13.37% |
| Research & Development | 154M | 152M | 152M | 144M | 150M | 159M | 152M | 163M | 181M | 175M |
| R&D % of Revenue | - | 1.05% | 1.07% | 1.01% | 1.1% | 1.11% | 1.19% | 1.24% | 1.4% | 1.42% |
| Other Operating Expenses | 2M | 106M | 279M | 40M | 12M | -22M | 64M | 39M | -25M | -37M |
| Operating Income | 2.29B | 2.13B | 2.01B | 2.19B | 2.03B | 2.11B | 1.64B | 1.81B | 1.83B | 1.92B |
| Operating Margin % | 15.35% | 14.78% | 14.08% | 15.38% | 14.86% | 14.74% | 12.85% | 13.83% | 14.21% | 15.55% |
| Operating Income Growth % | - | 6.23% | -8.14% | 7.53% | -3.56% | 28.62% | -9.65% | -1.14% | -4.23% | - |
| EBITDA | 2.42B | 2.31B | 2.19B | 2.38B | 2.22B | 2.31B | 1.83B | 1.99B | 2.02B | 2.09B |
| EBITDA Margin % | 16.21% | 15.99% | 15.35% | 16.74% | 16.25% | 16.16% | 14.35% | 15.2% | 15.68% | 16.98% |
| EBITDA Growth % | 18.83% | 5.44% | -7.99% | 6.97% | -3.76% | 26.28% | -8.22% | -1.53% | -3.25% | - |
| D&A (Non-Cash Add-back) | 130M | 175M | 181M | 193M | 191M | 203M | 191M | 180M | 190M | 177M |
| EBIT | 2.28B | 2.13B | 2.05B | 2.25B | 2.07B | 2.1B | 1.64B | 1.81B | 1.83B | 2B |
| Net Interest Income | -210M | -196M | 31M | -150M | -143M | -136M | -122M | 14M | 14M | 21M |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 53M | 51M | 61M |
| Interest Expense | 210M | 196M | -31M | 150M | 143M | 136M | 122M | 39M | 37M | 40M |
| Other Income/Expense | -215M | -199M | 31M | -155M | -145M | -147M | -128M | 47M | 58M | 41M |
| Pretax Income | 2.07B | 1.93B | 2.04B | 2.03B | 1.89B | 1.96B | 1.51B | 1.86B | 1.89B | 1.96B |
| Pretax Margin % | 13.91% | 13.4% | 14.3% | 14.29% | 13.8% | 13.72% | 11.85% | 14.19% | 14.66% | 15.88% |
| Income Tax | 496M | 479M | 305M | 533M | 519M | 541M | 455M | 594M | 683M | 1.15B |
| Effective Tax Rate % | 23.92% | 24.77% | 14.96% | 26.24% | 27.49% | 27.59% | 30.11% | 31.92% | 36.08% | 58.66% |
| Net Income | 1.52B | 1.38B | 1.65B | 1.41B | 1.25B | 1.25B | 906M | 1.12B | 1.05B | 636M |
| Net Margin % | 10.17% | 9.59% | 11.54% | 9.9% | 9.16% | 8.71% | 7.1% | 8.51% | 8.12% | 5.16% |
| Net Income Growth % | 0.2% | -15.87% | 17% | 12.21% | 0.56% | 37.53% | -18.82% | 6.39% | 64.94% | - |
| Net Income (Continuing) | 1.58B | 1.46B | 1.73B | 1.5B | 1.37B | 1.42B | 1.06B | 1.27B | 1.21B | 809M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 188M | 121M | 120M | 204M | 206M | 641M | 661M | 626M | 646M | 698M |
| EPS (Diluted) | 3.92 | 3.50 | 4.07 | 3.39 | 2.96 | 2.89 | 2.08 | 2.58 | 2.42 | 1.47 |
| EPS Growth % | 2.91% | -14% | 20.06% | 14.53% | 2.42% | 38.94% | -19.28% | 6.39% | 64.94% | - |
| EPS (Basic) | - | 3.53 | 4.10 | 3.42 | 2.98 | 2.91 | 2.09 | 2.58 | 2.42 | 1.47 |
| Diluted Shares Outstanding | 386.4M | 393.68M | 404.4M | 414.6M | 423M | 431.4M | 434.6M | 433.11M | 433.1M | 436.4M |
| Basic Shares Outstanding | 385.2M | 393.68M | 401.7M | 411.4M | 420M | 427.7M | 433.2M | 433.11M | 433.1M | 433.1M |
| Dividend Payout Ratio | - | 46.75% | 36.84% | 38.34% | 37.11% | 31.54% | 28.7% | - | - | - |
Quick answers to the most common questions about buying OTIS stock.
For fiscal year 2025, Otis Worldwide Corporation (OTIS) reported total revenue of $14.43B. This represents a 17.1% increase compared to $12.32B in 2017.
Otis Worldwide Corporation (OTIS) is profitable, generating $1.38B in net income for the fiscal year ending 2025 with a net profit margin of 9.6%.
Otis Worldwide Corporation (OTIS) reported an operating income of $2.13B, resulting in an operating profit margin of 14.8%. This margin reflects the operational efficiency of the business before interest and taxes.
Otis Worldwide Corporation (OTIS) generated $4.37B in gross profit for the year, representing a gross profit margin of 30.3%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
China new equipment weakness
Metrics are mathematically derived from official filings.
Service-Led Growth Reaccelerates
Otis's revenue growth accelerated to 7.3% in Q2 2026, the strongest in the reported period, driven by service and modernization momentum, according to recent SEC filings.
The 7.3% year-over-year revenue growth in Q2 2026 marks a clear inflection from the negative growth seen in early 2025, suggesting the company's strategic focus on high-margin service and modernization is gaining traction. This acceleration appears broad-based, with management commentary indicating double-digit growth in modernization and repair sales, while maintenance growth is also picking up. The sequential improvement in new equipment trends, despite persistent China weakness, hints that the drag from that region may be moderating, though investors should monitor whether this momentum is sustainable given the cyclical nature of new installations.
Gross Margin Resilience Amid Mix Shift
Gross margin held near 30% despite a revenue mix shift toward lower-margin new equipment, as reported in financial statements, indicating pricing discipline and service mix benefits.
Gross margin has remained remarkably stable around 30% over the past ten quarters, even as revenue growth has fluctuated. This stability suggests that the company's pricing power in the service segment is offsetting any margin dilution from new equipment, which is typically more competitive and material-intensive. The slight dip to 29.4% in Q2 2026 may reflect a higher proportion of new equipment sales or input cost pressures, but the overall trend indicates a resilient margin structure. Investors should watch for any sustained deviation below 30%, which could signal a structural shift in the business mix or increased competitive pressure.
Operating Leverage Emerging from Cost Discipline
Operating margin expanded to 14.9% in Q2 2026 from 12.3% a year earlier, as per reported figures, with SG&A growing slower than revenue, indicating improving overhead efficiency.
The operating margin improvement from 12.3% in Q1 2025 to 14.9% in Q2 2026 demonstrates that the company is leveraging its fixed cost base as revenue grows. SG&A expenses have increased only modestly relative to the revenue uptick, suggesting disciplined cost management and the benefits of scale in the service network. This operating leverage is a key driver of the earnings growth, which outpaced revenue growth in the quarter. However, the sustainability of this trend depends on the company's ability to control labor costs and continue to digitize its maintenance operations, as any acceleration in SG&A could compress margins.
Earnings Quality Solid but Tax Rate Volatile
Net income quality appears sound with minimal stock-based compensation, but effective tax rate swings caused EPS volatility, as seen in Q3 2024's 15.2% net margin.
The reported net income figures show significant quarterly volatility, particularly in Q3 2024 where net margin spiked to 15.2% and EPS reached $1.34, likely due to a one-time tax benefit or discrete item. Excluding that quarter, net margins have ranged between 7.3% and 11.5%, indicating more normalized earnings power. Stock-based compensation is minimal, which supports the quality of reported EPS. Investors should adjust for tax anomalies when forecasting future earnings, as the underlying operational performance appears more stable than the headline EPS swings suggest.
COGS and SG&A Trends Signal Efficiency
COGS as a percentage of revenue has remained stable near 70%, while SG&A grew only 15% over the period, as per financial statements, indicating cost discipline.
The cost structure is dominated by COGS, which consistently accounts for roughly 70% of revenue, reflecting the significant material and labor inputs in both new equipment and service. The stability of this ratio suggests that the company has been able to manage input cost inflation through pricing and productivity initiatives. SG&A has grown at a slower pace than revenue, indicating that the company is not adding overhead at the same rate as its top line, which is a positive sign for future margin expansion. However, the recent uptick in SG&A in Q2 2026 warrants monitoring, as it could signal increased investment in digital initiatives or sales force expansion.
Q1 2025 Marked the Trough
Q1 2025 was the operational low point with revenue down 2.5% and operating margin at 12.3%, as reported, after which growth and margins steadily recovered.
The first quarter of 2025 appears to have been the nadir of the recent cycle, with revenue contracting 2.5% year-over-year and operating margin falling to 12.3%, the lowest in the reported period. This was likely driven by the combination of China's property downturn and broader macroeconomic weakness. Since then, the company has demonstrated a clear recovery, with revenue growth turning positive and operating margins expanding to the mid-teens. This inflection suggests that the company's strategic pivot toward service and modernization is providing a more resilient earnings base, and the recovery appears to be gaining momentum into 2026.
China Exposure and Labor Inflation Risks
Despite strong service growth, sustained China weakness and labor inflation could pressure margins, as noted in recent filings, challenging the bullish narrative.
The most significant risk to the income statement narrative is the ongoing weakness in China, which remains a major market for new equipment. While the company has noted sequential improvement, a prolonged downturn could cap new equipment volumes and limit the future installed base growth, which is critical for long-term service revenue. Additionally, persistent labor inflation for skilled technicians could compress service margins if the company is unable to pass through costs via contract escalators. These factors could lead to a deceleration in the current growth trajectory and margin expansion, warranting close monitoring of quarterly trends in these areas.