This is Matt Reustle. Today we venture into the world of HVAC to break down Trane Technologies. Now, it's not often that I come across an industrial company with a $50 billion market cap that I just hadn't heard of. So when our guest today, Brett Larson, investor at NZS Capital, suggested Trane, it was as easy of a 'yes' as they come.
Brett and I cover the long corporate history of Trane, the dynamics that separate residential HVAC from commercial HVAC, and how Trane has helped create this unique consolidated industry. You may never look at your thermostat the same after this episode. Please enjoy this breakdown of Trane Technologies.

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Show Notes
(00:00) Show Introduction
(01:59) Brett tells us what Trane is 
(02:34) The companies corporate history and how it became Trane
(04:05) Overall size of the commercial market 
(05:18) He explains the go to market sales strategy 
(09:20) An additional breakdown of business cost
(10:12) Trane software uses
(10:55) Revenue received from Trane software
(10:11) A breakdown of the residential sales market
(14:53) Trane’s market share in the residential space
(15:52) Differentiated products available on the commercial side
(17:17) Included commercial software components
(18:16) New equipment versus replacement equipment 
(18:51) Growth expectations from aftermarket service providers
(19:15) Average life cycle for commercial units  
(19:26) He explains what a chiller is
(19:49) Comparing chiller systems to energy storage systems 
(21:19) Demand on commercial and residential sides of the market
(25:31) The cyclicality of the business and how revenue has trended over time   
(24:34) Revenue visibility being backlog versus forward facing    
(27:35) A look at share gains and industry consolidation over recent years
(31:09) How the management team is viewed by the industry
(32:48) Trending margin points for each market 
(34:10) How much net income converts to free cash flow 
(34:46) Key contributions from MNA and future consolidation    
(36:11) Relation to the reefer and life sciences transportation business
(37:02) Data center demand for HVAC units
(38:20) Framework used to evaluate this type of business
(39:40) Transport refrigerators key role in the industry market  
(41:02) Risks associated with the business
(42:52) The importance of international growth 
(43:30) What he’s learned from studying Trane
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