Why did OTIS outperform forecasts in Q4 2024?

Otis Worldwide Corporation (OTIS) outperformed forecasts in Q4 2024 primarily due to strong performance in its Service segment, which contributed to the company's overall revenue exceeding expectations. Here are the key reasons for OTIS's robust performance:

1. **Service Segment Growth**: The Service segment saw a significant increase in revenue, growing by 7.6% to $2.3 billion. This segment's performance was a key driver for the company's overall revenue growth. Otis's extensive service portfolio, which includes maintenance and modernization services for its extensive installed base of elevators and escalators, provides a stable and growing revenue stream.
2. **International Performance**: Otis's international operations contributed $1.95 billion in revenues during the quarter, constituting 56.7% of the total. This represented a positive surprise of +4.39% compared to the $1.87 billion projected by Wall Street analysts. The company's global presence and performance in international markets have been a significant contributor to its overall financial strength and growth potential.
3. **Market Leadership**: Otis's leadership position in the global elevator and escalator industry, with a market share of 18%, has allowed the company to maintain a competitive edge and command premium pricing power. The company's strong brand reputation for safety, reliability, and innovation has enabled it to secure contracts and maintain profitability in the face of competitive pressures.

In summary, Otis Worldwide's outperformance in Q4 2024 can be attributed to strong growth in its Service segment, robust international performance, and its position as a market leader in the elevator and escalator industry. These factors collectively contributed to the company's revenue exceeding forecasts for the quarter.