Carrier Global (CARR): Strong Top‑Line, Troubling Cash Flow — What the Numbers Actually Show

A startling accounting contrast: big GAAP profit, almost zero cash#

Carrier closed FY2024 with $22.49B in revenue, up +18.65% year over year, and a headline GAAP net income of $5.60B — yet the company's free cash flow for the year was only $44M and cash on the balance sheet fell by -$5.88B to $3.97B. That gulf between reported earnings and cash generation is the single most important development in Carrier’s financials and reshapes how investors should read the company’s momentum and recent M&A activity. The contrast — outsized GAAP profit versus near-zero free cash flow — creates a tension between strategic progress and the quality of reported results that demands deeper scrutiny.

What the raw numbers say (and where they conflict)#

On a simple top-line basis, Carrier delivered a materially stronger year: revenue rose from $18.95B in 2023 to $22.49B in 2024, a calculated increase of +18.65% ([(22.49 - 18.95) / 18.95] = +18.65%) according to Carrier’s FY2024 financials (Investor Relations) and the consolidated income statements. Operating income increased to $2.65B in 2024, and reported EBITDA was $3.56B. Yet when we move from accrual earnings to cash flow dynamics the story changes: net cash provided by operating activities fell to $563M in 2024 from $2.61B in 2023, and free cash flow collapsed to $44M ([(44 / 22,490) = 0.20% free cash flow margin]). These figures (cash flow and FCF) are sourced from Carrier’s FY2024 cash flow statement (Investor Relations).

There are also notable data inconsistencies inside the available dataset that materially affect common ratios. The consolidated income statement reports $5.60B in 2024 net income while the cash flow schedule shows a net income figure of $1.21B for the same period. That divergence is large and cannot be brushed aside: it implies the presence of sizable non‑cash items, one‑time gains/losses, or reporting classification differences. Because operating cash flow and free cash flow are the best measures of earnings quality and the company’s capacity to fund buybacks, dividends and debt reduction, we place heavier weight on the cash flow line items when assessing near‑term financial health and capital allocation capacity. All figures referenced here are from Carrier’s FY2024 filings (Investor Relations).

Income statement and cash flow — four‑year view#

To orient readers, the table below aggregates the core income and cash flow lines from FY2021–FY2024 and shows the inflection between 2023 and 2024 that underpins the narrative.

All numbers above are drawn from Carrier’s FY2024 consolidated income statement and cash flow statements (Investor Relations). The standout datapoints: the combination of $10.26B in acquisition outflows in 2024 and a $1.94B share repurchase program left the company with dramatically lower cash and materially weaker operating cash flow relative to reported net income.

Why operating cash flow diverged from GAAP net income in 2024#

The main drivers of the cash/earnings mismatch are visible in the cash flow statement: Carrier recorded -$10.26B of net acquisition payments in 2024 and -$1.94B of common stock repurchases, while investing and financing activities absorbed cash in the same year. Depreciation & amortization rose to $1.23B, which is a non‑cash addback that helps bridge GAAP income to cash flow. Nevertheless, the operating cash conversion ratio (net cash provided by operations / net income as reported in the cash flow statement) fell sharply. Using the cash flow net income line of $1.21B and operating cash flow of $563M, operating cash conversion is roughly 46.5% (563 / 1,210). If one instead used the income statement net income of $5.60B, conversion collapses to 10.05% (563 / 5,600), highlighting severe earnings quality questions.

These mechanics matter because Carrier completed large inorganic investments in 2024: the -$10.26B acquisitions line dwarfs prior years and explains most of the cash decline (cash fell by -$5.88B). Large acquisition spending can be strategically logical, but it changes the capital allocation calculus and temporarily depresses FCF and liquidity until synergies and integration deliver expected returns. The timing and expected payback from that deployment are therefore central to the investment case.

Balance sheet and leverage: mixed signals, but manageable on paper#

Carrier finished FY2024 with $37.4B in total assets and $14.08B in shareholders’ equity. Total debt declined to $12.71B from $14.63B a year earlier, a drop of -$1.92B ([(12.71 - 14.63) / 14.63] = -13.12%). Net debt (total debt minus cash) moved to $8.74B. Using the reported EBITDA of $3.56B, a simple net debt / EBITDA calculation yields approximately +2.46x net leverage (8.74 / 3.56 = +2.46x). That measure suggests leverage remains within typical industrial peer ranges after heavy M&A, although comparisons must account for integration risk and the one‑time cash outflows already noted. All balance sheet numbers are drawn from Carrier’s FY2024 balance sheet (Investor Relations).

A computed current ratio using 2024 current assets of $9.89B and current liabilities of $7.89B gives 1.25x (9.89 / 7.89 = 1.25x), indicating adequate short‑term liquidity on a snapshot basis. However, the steep drop in cash from $9.85B to $3.97B (-59.70%) means the company’s cushion has narrowed materially and requires monitoring, especially if operating cash generation does not normalize.

Segment and strategic dynamics: secular tailwinds with execution caveats#

Carrier’s business sits at the intersection of three secular trends: HVAC electrification and energy efficiency, the expansion of data centers and specialized cooling, and the digitization/automation of commercial buildings. Carrier’s strategic moves — including targeted acquisitions intended to fill capability gaps in building automation and bolster European footprint — are consistent with those themes. Management has emphasized data‑center cooling as a higher‑value vertical and is pushing service and aftermarket growth to steady recurring revenue.

Operationally, Carrier reported margin expansion in Climate Solutions and improving aftermarket attach rates, which support a narrative of rising profit per installed unit. That said, the company’s FY2024 operating income of $2.65B reflects a complex mix of organic performance and one‑off items. Given the cash flow weakness and large acquisition spending, the immediate question is not whether the strategic direction is sensible — it is — but whether recent M&A and working‑capital timing could delay the translation of revenue growth into durable cash‑flow expansion.

Capital allocation in 2024: an aggressive, mixed program#

Carrier returned capital aggressively in 2024 via $1.94B in share repurchases and $670M in dividends paid, while simultaneously deploying $10.26B to acquisitions. That simultaneous buyback and M&A posture signals management confidence in both the business and its growth opportunities, but it also stretched cash balances and put near‑term emphasis on deal execution. From a capital allocation lens, the key metrics to monitor are integration ROI on those acquisitions and the re‑establishment of free cash flow conversion to fund buybacks and dividends sustainably. All capital allocation flows are reported in the FY2024 cash flow statement (Investor Relations).

Below is a concise table of key capital allocation and liquidity metrics to complement the income table above.

Note: Net debt increased due to large acquisitions and simultaneous reduction in cash despite lower total debt, explaining the +83.22% change ([(8.74 - 4.77) / 4.77] = +83.22%).

Earnings quality and what to watch next quarter#

The FY2024 figures raise three tightly connected watch items for the next quarter and fiscal year: (1) operating cash flow normalization, (2) integration progress and synergies from the 2024 acquisitions that consumed $10.26B, and (3) management’s guidance cadence on backlog conversion and working capital. If operating cash flow rebounds toward historical conversion ratios (2021–2023 levels of >50% conversion historically), the capital allocation program becomes easier to justify. If cash flow remains muted while goodwill and intangible assets have grown (goodwill/intangibles were $21.03B on the balance sheet), the market will press on impairment risk and the timing of realized synergies.

Carrier’s FY2024 balance sheet shows $21.03B of goodwill and intangible assets versus $8.46B a year earlier — this step‑up is directly traceable to the 2024 acquisition activity and increases the sensitivity of reported earnings to any future impairment tests. Investors should therefore watch the trailing twelve months’ (TTM) EBITDA and revenue mix closely, because impairment risk and cash generation are the two levers that will determine whether the recent acquisitions add shareholder value or become a drag.

Valuation context and forward estimates#

Carrier’s market capitalization stands near $55.44B and consensus forward multiples compress as near‑term visibility becomes muddled by the post‑acquisition cash dynamic. Using a TTM EBITDA of $3.56B and an enterprise value implied by market cap plus net debt, enterprise value / EBITDA sits in the high‑teens (Carrier’s dataset reports 18.11x enterprise value / EBITDA TTM). Analysts’ forward EPS and revenue estimates embedded in the dataset show revenue CAGR expectations of ~6.71% and EPS CAGR of ~15.37% out to the 2025–2029 window, but those figures assume successful integration of acquisitions and normalization of cash conversion. Forward P/E compresses across the 2025–2029 horizon in the dataset (2025: 20.20x, 2026: 17.75x, 2027: 15.93x), reflecting expected EPS growth in the out years but reliant on execution.

Competitive position and secular tailwinds — strengths, not guarantees#

Carrier benefits from a century‑old brand in HVAC and refrigeration and is well positioned to capture three durable trends: energy efficiency retrofits and electrification; specialized data‑center cooling driven by rising compute intensity; and digital building controls driving recurring revenue. These secular vectors underpin management’s strategic rationale for acquisitions and product investments. However, the industrial nature of many of Carrier’s end markets means that revenue remains somewhat lumpy and regionally sensitive, which in turn stresses the importance of converting backlog and large project wins into predictable cash flows.

Key takeaways#

Carrier’s FY2024 performance is a study in contrasts. The business delivered meaningful revenue growth — +18.65% to $22.49B — and reported GAAP profit of $5.60B, yet free cash flow collapsed to $44M while cash fell $5.88B after $10.26B in acquisition spending. The core conclusions are threefold: first, Carrier’s secular positioning is intact and its revenue momentum is real; second, earnings quality and cash conversion are weaker than headline GAAP numbers imply because of large non‑cash and acquisition effects; third, the value created by 2024’s deals depends on integration execution, the pace of cost synergies and conversion of acquired revenue into recurring, cash‑generative streams.

What this means for investors#

Investors evaluating [CARR] should treat the FY2024 results as an inflection moment rather than a simple read on operating performance. The company now carries a larger intangible footprint and a temporarily thinner cash cushion due to aggressive M&A, buybacks and dividend distribution. The near‑term focus should be on verifying three data points in subsequent quarters: operating cash flow recovery, realization of acquisition synergies, and any signs of impairment charges tied to elevated goodwill. If those items trend positively, the strategic rationale — increased exposure to higher‑value verticals such as data center cooling and expanding building automation reach in Europe — would be substantiated by cash‑flow improvement. If they do not, the headline revenue growth will be harder to translate into long‑term shareholder value.

Closing synthesis#

Carrier’s FY2024 numbers deliver a mixed verdict: the company is executing a credible strategic pivot toward higher‑value, recurring revenue streams and backing that strategy with meaningful M&A, but the mechanics of execution have depressed free cash flow and increased goodwill to levels that materially increase execution risk. The most actionable signal in the data is not the high GAAP net income number but the cash flow profile — and that suggests the next several quarters of operating cash flow and integration disclosures will be decisive in determining whether Carrier’s recent investments pay off.

For primary source detail, see Carrier’s investor relations pages and filings for FY2024 (Investor Relations).

Figures in this piece are calculated from Carrier’s FY2024 consolidated income statement, balance sheet and cash flow statements as provided in the company’s FY2024 filings (Investor Relations). Where the dataset contained conflicting line items (for example, two different net income figures for 2024), I have highlighted those inconsistencies and emphasized cash‑flow metrics for assessing near‑term financial quality.