Otis Worldwide Corporation

Otis Worldwide Corporation is the world's largest elevator and escalator manufacturing, installation, service, and modernization company, serving customers in over 200 countries with a maintenance portfolio of approximately 2.5 million units and 72,000 employees as of fiscal 2025. The company generated $14.4 billion in GAAP revenue in FY2025, with roughly two-thirds coming from its Service segment and the balance from New Equipment sales.

This is a service-driven compounder wearing an industrial manufacturer's clothes. The elevator industry's economics flow from the installed base: every unit sold generates decades of recurring maintenance and repair revenue, episodic modernization projects, and a replacement cycle measured in 20-plus years. Otis commands the largest installed base in the industry, giving it a structural advantage that its smaller competitors cannot easily replicate. But that advantage is under pressure from two directions simultaneously — a severe multi-year contraction in China's new equipment market, and a service operating model in transition as the company works to translate its installed-base lead into consistent margin expansion.

The file turns on a single question: whether the service business can generate enough organic profit growth to more than offset the ongoing drag from China new equipment, while Otis simultaneously invests in the service quality and frontline operations needed to defend its portfolio. The Q2 2026 earnings call sharpened this question materially — revenue growth is accelerating, but margin delivery has slipped as the company navigates productivity headwinds, retention challenges, and the cost of ramping up to meet surging modernization and repair demand.