Honeywell Q3 2025 Results: Raised Guidance, Strong Organic Growth and AI-Ready Automation Strategy

Honeywell Q3 2025: Strong results and strategic momentum

Honeywell (NASDAQ: HON) reported robust Q3 2025 performance, beating prior guidance and raising full-year targets. The company highlighted broad-based demand, recurring revenue growth via the Honeywell Connected Platform, and progress on strategic portfolio actions that position it for automation and AI-driven opportunities.

Key financial highlights (Q3 2025)

• Revenue: $10.4B, +7% year-over-year; organic revenue +6% driven by double-digit growth in commercial aftermarket.
• Segment profit: $2.4B, +5%; segment margin 23.1% (at the high end of prior guidance).
• Operating income: down 6%; operating margin 16.9% (-220 bps).
• Reported EPS: $2.86, +32%; Adjusted EPS: $2.82, +9%.
• Operating cash flow: $3.3B, +65%; Free cash flow: $1.5B, -16%.

Updated 2025 guidance and spin-off impact

Management raised full-year expectations after Q3 results and included the Solstice Advanced Materials spin-off effect (expected completion Oct 30, 2025):

• Full-year revenue: $40.7B–$40.9B; organic growth ~6%.
• Segment margin: 22.9%–23.0%, up 30–40 bps year-over-year.
• Adjusted EPS: $10.60–$10.70 (midpoint up $0.10 vs prior guidance); spin-off reduces EPS by ~$0.21.
• Operating cash flow: $6.4B–$6.8B; Free cash flow: $5.2B–$5.6B (spin-off reduces FCF ~ $0.2B).

Strategic moves: automation, divestitures and quantum

Honeywell is executing a multi-step portfolio transformation to become three independent public companies by H2 2026. Key actions include an automation reorganization (Building Automation; Process Automation & Technology; Industrial Automation), legacy liability dispositions, and selective asset monetizations.

The company also completed >$1.6B in remediation-related cash inflows and secured >$600M funding for Quantinuum, supporting quantum computing scale-up (pre-money valuation ~$10B). These moves free capital and sharpen focus on core automation and aerospace franchises.

AI, IoT and investor takeaways

• Recurring revenue and connected solutions growth (Honeywell Connected Platform) support predictable cash flows—key for AI-enabled services.
• Automation segmentation and portfolio simplification aim to create purer, more scalable businesses that can deploy AI and IoT at scale.
• Quantinuum funding accelerates quantum capabilities that could materially benefit future AI workloads and industrial optimization.

Bottom line: Honeywell delivered a strong quarter, raised 2025 guidance despite an imminent spin-off, and continues to align its portfolio for automation and AI-driven growth. Investors and customers should watch recurring revenue trends, adjusted EPS cadence, and the execution of the automation carve-up through 2026.

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