Carrier Residential Sales Crater 38% in Q4 as Data-Center Orders Quadruple

Carrier Global's Q4 2025 report, released February 5, 2026, told two different stories from the same company. Residential HVAC sales cratered in North America. Commercial orders exploded.

Revenue fell 6% year over year in the quarter, with adjusted earnings per share landing at $0.34. The Climate Solutions Americas residential business was down 38% on an organic basis, driven by distributor destocking as the industry works through R-410A inventory ahead of the full R-454B transition. Homeowner demand, Carrier said, also softened on higher financing costs and slower existing-home turnover.

Then CEO David Gitlin flipped the page. Commercial HVAC orders were up double digits in Q4, and data-center cooling orders came in at roughly 4x year over year. Carrier's full-year 2026 guidance implies close to a 50% lift in commercial orders for the year, and the company is now targeting $1.5 billion in 2026 data-center revenue, a number that would have sounded absurd five years ago.

That's a big swing.

A Market Splitting in Two

The residential slump isn't unique to Carrier. Distributors across the country have been managing bloated R-410A inventory since mid-2025, and most won't take new stock positions until they're confident about the A2L rollout. When distributors freeze buying, OEM revenue freezes with them, even if end-user demand is steady.

Gitlin called the destocking "largely a Q4 event" and said he expects residential shipments to stabilize in the first half of 2026. That's a forecast, not a guarantee. Contractors we've talked to in California and Texas say distributor lead times on 14.3-SEER2 R-454B systems are still bouncing between one week and four weeks depending on the model.

Commercial is a different animal. The data-center build-out is pulling every large chiller and packaged rooftop manufacturer into a multi-year order book. Carrier's 4x jump in data-center cooling orders tracks with what Trane and Daikin reported in their own Q4 calls. Hyperscalers aren't canceling projects.

What It Means for the Trade

Residential contractors should expect price holds from Carrier into the spring. With distributors sitting on inventory, list pricing isn't the lever right now; dealer rebates and financing promos are. Watch for 0% financing campaigns on Infinity heat pumps through May.

Commercial shops should lock in equipment slots early. Lead times on 50-ton and larger rooftop units are running 14 to 20 weeks at several distributors, and data-center projects are vacuuming up specialized low-temperature chillers in particular.

Gitlin said the company expects "mid-single-digit" overall revenue growth in 2026, weighted toward the second half. Residential is the variable. If the A2L transition destocking resolves by summer and mortgage rates ease at all, the residential side has a lot of pent-up demand to release.

For more on how the refrigerant transition is hitting the field, see our coverage of the EPA R-410A ban rollback under the AIM Act and the 2026 EPA refrigerant transition update.