How Will Honeywell AI Revenue Impact 2026?

Honeywell Technologies reported second quarter 2026 earnings on July 23, 2026, its first results after the June 29 separation from Honeywell Aerospace. Chief Executive Officer Vimal Kapur said AI-based software sold through Honeywell's Forge platform is expected to grow to just over $1 billion in annual recurring revenue (ARR) this year, up from about $900 million. Kapur said the figure is not final, noting that six months remain in the year.

According to their earnings release the total consolidated revenue for the quarter, which included both Honeywell Technologies and Honeywell Aerospace due to the timing of the separation, came in at $9.7 billion. The same materials show Honeywell Technologies alone reported standalone revenue of $5.2 billion for the quarter.

Honeywell raised its full year adjusted earnings per share guidance to $8.20 at the midpoint, up from a prior midpoint of $8.10, the company said. It also raised its organic sales growth outlook to a range of 3% to 4% for the year.

Total company orders grew 16% organically in the quarter, according to the company, with Building Automation orders up 13%. Chief Financial Officer Mike Stepniak said segment profit rose 9% for the quarter, with standalone segment margins expanded by 100 basis points to reach 19.0%

Kapur said Forge software sales are also contributing to related hardware purchases, though he said the effect applies "to a certain degree." "When we sell software on our Forge platform, that's all AI-based offerings," Kapur said. Annual recurring revenue growth is guided at roughly 15% for 2026, he added.

Data Center Opportunity

Honeywell is looking at data center growth in two main areas: construction activity expanding globally outside the United States, and on-site power generation systems being added at data center facilities. Kapur also pointed to liquid cooling systems that use Honeywell sensors as a further, longer-term opportunity.

The company said the on-site power opportunity, which includes utility automation, energy storage, and gas pipeline systems for data center power plants, has not yet appeared in its order figures. According to Kapur, data centers have grown from "almost nothing 3, 4 years back" to about 5% of the Building Automation segment's business.

Kapur said the spread of artificial intelligence, along with rising global energy demand, an aging population, and increased consumption, represents a long-term tailwind for the company's growth targets. Honeywell Technologies will report as a standalone entity beginning in the third quarter of 2026, following the completed separation of Honeywell Aerospace.

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