Carrier Global makes the systems that heat and cool homes, offices, schools, and hospitals, and keeps food and medicine cold while they travel across the world. The company sells air conditioners, heat pumps, furnaces, smart thermostats, and refrigerated transport units under brands including Carrier, Viessmann, Toshiba, Bryant, and Carrier Transicold. It earns money two ways: first from selling new equipment, which made up 72% of net sales in 2025, and second from parts, repairs, and maintenance contracts on equipment already installed, which made up the remaining 28%. About 52% of net sales come from outside the United States, spread across Europe, Asia Pacific, the Middle East, and Africa. The diagram below traces where the money goes.
How Carrier Global Makes Money
flowchart LR
A["New Equipment Sales
$15.6B, 72% of revenue"] --> B["Four Regional
Segments"]
B --> C["Parts & Service
$6.1B, 28% of revenue"]
C --> D["Aftermarket Growth
Replacement, Maintenance,
Monitoring"]
D --> C
A --> E["Operating Profit
$2.2B, 10% margin"]
C --> E
E --> F["Free Cash Flow
$2.1B"]
F --> G["R&D & Product
Innovation"]
G --> A
F --> H["Strategic
Acquisitions"]
H --> B
D --> B
Five years of financial data tell a story of transformation, not steady growth. Revenue was $20.6 billion in 2021, dropped to $17.3 billion in 2022 after Carrier sold several businesses, climbed back to $19.0 billion in 2023, jumped to $22.5 billion in 2024 when the Viessmann climate business acquisition closed, then slipped to $21.7 billion in 2025 as end-market demand softened in residential, light commercial, and parts of Asia. The revenue line is not a clean upward trend. It reflects a company that has been reshaping itself by selling fire and security businesses, buying Viessmann, and now agreeing to sell its Riello thermal solutions unit for approximately $430 million.
Net Revenue 2021 to 2025 ($B)
Revenue swings reflect divestitures in 2022, the Viessmann acquisition in 2024, and softer end-market demand in 2025.
Gross margin tells a more concerning story. In 2021, Carrier kept about 29 cents of every dollar of revenue after covering the direct cost of making its products. By 2025, that figure had fallen to about 25.9 cents. The company points to lower volumes, product mix, and the costs of integrating Viessmann as reasons for the compression. Operating cash flow was strong in 2021 at $2.2 billion, dropped to $1.7 billion in 2022, recovered to $2.6 billion in 2023, then fell sharply to $0.6 billion in 2024, the year the Viessmann deal closed and heavy transaction costs hit the books. It recovered to $2.5 billion in 2025, which suggests the business itself generates real cash when it is not in the middle of a large acquisition.
What Is Net Debt?
Net debt is the total amount a company owes to lenders, minus the cash it has on hand. A company with $12 billion in debt but $2 billion in cash has net debt of $10 billion. Higher net debt means more of each year's cash flow must go toward paying interest and repaying loans before anything else.
The debt load is the most important number to watch right now. Net debt fell from $6.5 billion in 2021 to $4.4 billion in 2023, a healthy direction. Then the Viessmann acquisition reversed that progress sharply. Net debt jumped to $8.4 billion in 2024 and rose further to $10.3 billion in 2025. Carrier carries approximately $11.5 billion in total debt, with interest payments expected to run about $408 million per year. The company repaid $1.2 billion of debt during 2025 and says it is committed to reducing the load, but the balance sheet is heavier than it was before the Viessmann deal.
$10.3B
Net debt at end of 2025, up from $4.4B just two years earlier
2024
milestone
Viessmann Changes Everything
On January 2, 2024, Carrier paid approximately $10.8 billion net of cash to acquire the climate solutions business of Viessmann Group, a major residential and light commercial heating and cooling provider in Europe. At the same time, Carrier sold its fire and security businesses and its commercial refrigeration unit, collecting over $10 billion in total divestiture proceeds. The result was a much more focused company with a much heavier debt load.
The Viessmann deal was meant to make Carrier the dominant player in European residential heating and cooling, especially heat pumps. But the European residential market has been difficult since the deal closed. In 2025, Carrier's Climate Solutions Europe segment saw residential and light commercial volumes fall 5% organically, hurt by what the company described as economic conditions, inflationary cost pressures, and regulatory uncertainty. Carrier's largest single segment, Climate Solutions Americas, also saw residential volumes fall 9% and light commercial volumes fall 20% in 2025, with distributor destocking adding to the pain.
$2.1B
Free cash flow in 2025, recovering after near-zero in 2024
Why Refrigerant Rules Matter
Many air conditioners and refrigeration systems use chemical gases called refrigerants to move heat. Some of these gases trap heat in the atmosphere and contribute to climate change. New laws, including the Kigali Amendment and the American Innovation and Manufacturing Act, require companies to phase out certain refrigerants. This forces makers like Carrier to redesign their products, which costs money and time.
Three risks stand out from Carrier's own disclosures. First, refrigerant regulations are changing fast. New rules require phasing out certain gases used inside Carrier's products. If Carrier cannot redesign products quickly enough, or if customers resist new versions, some products could become illegal to sell or hard to move. Second, more than half of Carrier's sales happen outside the United States, with manufacturing spread across countries including China, Mexico, Brazil, and India. Tariffs and trade policy changes create real cost risk. Carrier says it fully offset tariff impacts in 2025 through supply chain moves and about $200 million of incremental product price increases, but that playbook has limits. Third, Carrier depends on some suppliers who are the only source for certain critical parts like motors and valves. A single supplier failure can stop production.
Carrier holds approximately 11,000 active patents and pending patent applications worldwide. That portfolio provides some protection against competitors copying its products, but the company itself notes those rights can be challenged or found unenforceable.
52%
Share of 2025 net sales from outside the United States
Carrier is also building a new business called Carrier Energy, which aims to connect homes to smart energy management systems, solar panels, batteries, and the power grid. The Lynx digital platform, built with Amazon Web Services, does the same for cold chain customers. These digital layers are meant to create ongoing subscription and service revenue on top of the one-time equipment sale. That model would reduce Carrier's dependence on construction cycles and new building activity, which is the main reason its revenue swings up and down with the economy. Whether that digital layer generates meaningful revenue at scale is still unproven.
The Bet
Carrier paid roughly $10.8 billion net for the Viessmann climate business on the premise that European demand for heat pumps and energy-efficient heating systems would grow fast enough, and soon enough, to justify that price and the debt it created. If European residential end-markets stay weak, if heat pump adoption slows because of high installation costs or regulatory uncertainty, or if Carrier cannot close the margin gap between its European segment and its Americas segment, the Viessmann acquisition will have loaded the balance sheet with $10-plus billion in net debt without delivering the growth that was supposed to pay for it.
Open question
Carrier has reshaped itself into a focused climate and energy company with strong brands, global reach, and a recovering cash flow. But it carries heavy debt from the Viessmann deal, faces weakening residential volumes on both sides of the Atlantic, and is betting that heat pump demand in Europe will eventually arrive in force. Can Carrier grow its way through the debt load before a prolonged downturn in residential construction or a continued slowdown in European heat pump adoption forces it to choose between investing in the business and paying down what it owes?
Compiled · 10-K · FY2025
Climate Regulations and Product Obsolescence
New environmental rules like the Kigali Amendment and the American Innovation and Manufacturing Act require reducing certain refrigerants used in many of our HVAC and refrigeration products. If we cannot redesign these products quickly enough or if customers reject new versions, our products could become illegal to sell or unmarketable, forcing expensive capital investments.
International Operations and Trade Policy
About 52 percent of our sales come from outside the United States. Tariffs, trade wars, currency changes, and political instability in countries like China, Mexico, Brazil, and India where we manufacture or sell products could increase costs, reduce sales, or disrupt our ability to do business.
Supply Chain Dependencies
We depend on suppliers worldwide for critical parts like motors and valves, and some parts come from only one or two suppliers. If suppliers go out of business, have labor strikes, face climate disasters, or refuse to deliver, we cannot make or sell our products on time, harming customer relationships and profits.
Joint Venture Risks
We own part of joint ventures in key markets through Carrier Enterprise with Watsco and partnerships with the Midea Group. If these partners face financial trouble, labor disputes, or want to pursue different goals than us, our ability to sell products and services in those regions could be severely damaged.
Debt Obligations and Leverage
We have approximately 11.5 billion dollars in debt. High debt levels reduce our flexibility to invest in new products, respond to business changes, or handle economic downturns, and could lead to credit rating downgrades that increase our borrowing costs.
10-K Item 1A · Risk Factors
