Climate Tech for High-Tech

Cramer:

One of my favorite things about this Dreamforce conference is that I get to catch up with some of my favorite companies. Companies like Trane Technologies, one of the leading global players in the heating, ventilation, air conditioning space. But the Federal Reserve about to start cutting interest rates. I think it's kind of exactly a modernized industrial company.  It's worth owning here, by the way, big data center exposure. Don't take it from me. Let's dig deeper with Dave Regnery. He is the chairman, CEO of Trane Technologies. Once again, all time high.

0:30 Cramer:
Mr. Regnery, welcome back to MAD MONEY.

0:32 Regnery:
Thanks, Jim. Glad to be back on your show.

0:33 Cramer:
All right, So, Dave, I think we have to understand that when we talk about buildings, we love buildings, of course, but they turn out to be a major source of pollution. And you are trying your best to stop that.

0:44 Regnery:
Yeah. About 40% of all the energy that goes to a building is for heating and cooling. And we know because we've done hundreds of thousands of energy audits within buildings. Most buildings operate inefficiently up to 30%, even sometimes higher. And what you're going to hear, and you'll hear a lot about it at the conferences is you'll hear a lot about from if I was a utility, I'd be talking about supply and I need to get more power on the grid here at you're going to hear a lot about data centers.
They use too much power and it's going to double. What nobody's talking about is what we call demand side management. And that's the fact that 30% of all the energy that's after the meter is being wasted. And that's why I'm here today because I want to talk about how an industrial company like Trane Technologies is utilizing AI.

1:32 Regnery:
If you're connected to the asset, if you're connected to the building, you could ensure that building is always operating the way it's designed. Look, we've been using structured AI data for over a decade. When you take unstructured data and you augment that data layer, it's the amount of improvement that you could have is vast.

1:53 Cramer:
Why did we build buildings that were wasteful to begin with?

1:56 Regnery:
You know, at the time, I think it was just a, it's a, it's a different time in, in history and people, It wasn't top of mind for people. And what happens is even with new buildings, right? Forget about the old, just new buildings. They'll do what we call drift. They'll they'll degradate performance over time. And within three months, six months, you start to have a building that drifts.

2:15 Regnery:
And there's a lot of reasons why. Some of it's mechanical, some of it is human interface. But if you're connected to that building, you could ensure that it's always performing the way it was designed. We say, we say an HVAC asset isn't performing not only if it's not heating or cooling properly, it's not performing if it's using too much energy.

2:35 Cramer:
So that's also part of what Jensen Wong talks about is the total cost of ownership. And what I what I get crazed about is it Oracle's 162 data centers, they said maybe we need another thousand, maybe we need another 2000. What what does that do to the planet?

2:52 Regnery:
Well, if you think about it and you keep there's different numbers that are out there, but if, if, if, if data centers use about 4% of all the energy today and it double S to 8%, if we could control the 30% that's wasted, Jim, that's the bigger opportunity, right? We need data centers. I need that intelligent layer to help us have these buildings operate the way they were designed. And the neat thing about it is this is all technology that exists today. We don't have to go out and create a new technology or you know, try to scale carbon capture. This is technology that exists today.

3:24 Regnery:
And the paybacks for our customers, because some of these buildings are performing so poorly, it's very, very accretive. Many of our paybacks are less than three years. So we tell people it's green for green, right? It's green for the planet and it's certainly green for their income statement as well.

3:39 Cramer:
Well, do you at this stage with all the demand you have, does it matter if the Fed cuts raise? Does it matter if we get a little reacceleration?

3:47 Regnery:
Will it be a stimulus, for sure. But our paybacks are so attractive right now that it's, you know, with or without that we're going to continue to be successful.

3:56 Cramer:
When you see this happening. I mean, look what I, I got to tell you for years when I heard it was an HVAC company, I yawned. I said all good. Well, it's part of some larger conglomerate. And then when you first came on, you taught me though, look, it's not HVAC the way it's not just some air conditioner duct. It's a very complex system that is trying to be able to make it so the planet is not choked on what buildings produce. But did you see it yourself when you got in this business?

4:21Regnery:
You know, we always saw that the sustainability aspect of our business had some meaning to us. And the purpose of our company is to challenge what's possible and innovate for a sustainable world.  And that's what all 45,000 of our employees really think about. And, and it, it's, it's really, it's gaining momentum for sure. But I would tell you that, you know, we've had a tremendous success over the last four years. I mean, our, our reported revenue growth on a compound annual growth rate is 12%. Our EPS growth is north of 20%.

4:49 Cramer:
No, I mean, this is a, you have a much better growth rate than almost all the technology companies that I deal with. They do not offer a product that is at level of demand that you have.

5:00 Rengery:
Yeah, Jim, I always tell our team that our best days are in front of us. So we've had great success, but our best days are in front of us.

5:06 Cramer:
OK, The last thing I, I wanted to ask you do people, I mean, you'd be busy listening, you know what I mean? I've been waiting for someone to say I want to go into HVAC. Do they know that that's where their career should be?

5:16 Regnery:
I need, I need to talk to them. We're always recruiting great people. So you're more than welcome.

5:21 Cramer:
Well, you do a great job. TT, another all time high. And it's because of, you know, how to save the planet and also make some money at it. Nothing wrong with that. That's great. Fair enough.

5:31 Cramer:
That's Dave Regnery, the CEO of Trane Technologies TT. Take a look at this. This thing is like this. Mad moneys back after the break.