Honeywell International Inc. (HON): Business Model Canvas [Dec-2025 Updated]

You're trying to make sense of Honeywell International Inc. right now, and honestly, it's a complex picture as they execute that massive three-way portfolio separation. Forget the noise; as someone who's mapped out giants for years, the core value proposition remains incredibly robust, supported by hard numbers: they are projecting 2025 sales between $40.7 billion and $40.9 billion, guiding for $5.2 billion to $5.6 billion in Free Cash Flow, all while sitting on a backlog north of $36.1 billion from aerospace and industrial clients. To see precisely how they are structuring their key activities, resources, and revenue streams to manage this transition while still delivering mission-critical components, dive into the full Business Model Canvas analysis we put together for you below.

Honeywell International Inc. (HON) - Canvas Business Model: Key Partnerships

You're looking at the critical alliances that keep Honeywell International Inc. moving, especially as they prepare for the Aerospace Technologies spinoff in the second half of $\mathbf{2026}$. These partnerships are where a lot of the near-term value is being locked in, particularly in quantum and advanced air mobility.

Aerospace OEMs and Strategic Supply Agreements

Honeywell International Inc. maintains deep, long-term relationships with major Original Equipment Manufacturers (OEMs). These agreements are foundational to the Aerospace Technologies segment, which boasted a record-high backlog of $\mathbf{\$39}$ billion as of November $\mathbf{2025}$.

A key recent development was the strategic agreement announced in February $\mathbf{2025}$ with Bombardier to supply advanced technology across avionics, propulsion, and satellite communications for current and future business jets. While specific contract values are often embedded in long-term agreements, the company noted that pricing leverage, especially around these OEM contracts, is expected to become a tailwind starting in the second half of $\mathbf{2026}$, as many contracts come up for renewal around $\mathbf{2027}$.

The segment's performance reflects this partnership strength; defense and space sales saw a $\mathbf{14\%}$ increase year-over-year in Q4 $\mathbf{2024}$. For context, in $\mathbf{2023}$, defense-related revenue was approximately $\mathbf{\$4.9}$ billion, representing about $\mathbf{14\%}$ of total revenue.

Strategic Investors in Quantum Computing: Quantinuum

The partnership with NVIDIA, channeled through its venture capital arm NVentures, is central to the Quantinuum quantum computing venture. Honeywell International Inc. announced on September 4, $\mathbf{2025}$, that Quantinuum completed an equity capital raise of approximately $\mathbf{\$600}$ million.

This funding round established a pre-money equity valuation for Quantinuum at $\mathbf{\$10}$ billion. Honeywell International Inc. remains the largest shareholder, with an estimated $\mathbf{53\%}$ stake, while Cambridge Quantum holds an estimated $\mathbf{36\%}$. The capital supports the launch of the next-generation quantum computing system, Helios, expected this year ($\mathbf{2025}$). Furthermore, a joint venture in Qatar was selected to deliver advanced quantum computing infrastructure as part of Qatar's $\mathbf{\$1}$ billion investment commitment over the next decade.

Deepened Partnership with Vertical Aerospace

The collaboration with Vertical Aerospace for the VX4 electric vertical take-off and landing (eVTOL) aircraft has been significantly reinforced. An expanded long-term agreement, announced in May $\mathbf{2025}$, projects a potential contract value up to $\mathbf{US\$1}$ billion over the next decade. Honeywell International Inc. has been an investor in Vertical Aerospace since $\mathbf{2021}$.

This partnership focuses on certifying two critical systems: the aircraft management system (using the Honeywell Anthem flight deck) and the flight controls system (using Honeywell's fly-by-wire technology). Vertical Aerospace is targeting $\mathbf{2028}$ for VX4 certification and aims to deliver at least $\mathbf{150}$ aircraft by $\mathbf{2030}$ as part of its Flightpath $\mathbf{2030}$ vision.

Government Agencies for Defense and Space Technology

Direct contracts with government agencies underpin a portion of the Aerospace Technologies segment. For instance, in February $\mathbf{2025}$, Honeywell International Inc. was awarded a multi-million dollar contract by the U.S. government's Intelligence Advanced Research Projects Activity (IARPA) for real-time speech anonymization technology under the ARTS program. While the exact figure is described as multi-million, specific contract data shows a repair contract awarded in December $\mathbf{2024}$ with a current award amount of $\mathbf{\$6.1}$ Million, obligated through December $\mathbf{2025}$. Another contract awarded in April $\mathbf{2025}$ for retrofit kits on navigational equipment had an award amount of $\mathbf{\$205,064}$.

Engineering, Procurement, and Construction (EPC) Firms

While specific dollar amounts tied directly to EPC firm contracts aren't explicitly detailed in the latest filings, these relationships are vital to the Industrial Automation and Energy Transition megatrends. The Industrial Automation segment's performance contributes to the overall company outlook. For fiscal year $\mathbf{2025}$, Honeywell International Inc. guided for total sales between $\mathbf{\$39.6}$ billion and $\mathbf{\$40.6}$ billion, with the segment margin expected to be in the range of $\mathbf{23.2\%}$ to $\mathbf{23.6\%}$.

Here is a snapshot of the quantifiable partnership investments and contract values as of late $\mathbf{2025}$:

Partner Category	Specific Partner/Venture	Financial Metric/Value	Date/Period
Strategic Investor (Quantum)	Quantinuum (NVentures/NVIDIA)	$\mathbf{\$600}$ Million Equity Raise	September $\mathbf{2025}$
Strategic Investor (Quantum)	Quantinuum	$\mathbf{\$10}$ Billion Pre-Money Valuation	September $\mathbf{2025}$
Strategic Investor (Quantum)	Honeywell International Inc. Stake in Quantinuum	Estimated $\mathbf{53\%}$ Stake	September $\mathbf{2025}$
Aerospace OEM Partner	Vertical Aerospace (VX4) Extended Agreement	Up to $\mathbf{US\$1}$ Billion Projected Value	Next Decade (from May $\mathbf{2025}$)
Government Agency Contract	IARPA (ARTS Program)	Multi-Million Dollar Contract	February $\mathbf{2025}$
Government Agency Contract	DOD - Inertial Navigation System Repairs	$\mathbf{\$6.1}$ Million Current Award Amount	Awarded Dec $\mathbf{2024}$/Active $\mathbf{2025}$
Government Agency Contract	DOD - Navigational Equipment Retrofit Kits	$\mathbf{\$205,064}$ Award Amount	April $\mathbf{2025}$
Government Agency/Sovereign Fund	Qatar Quantum Investment	$\mathbf{\$1}$ Billion Commitment	Next Decade

The Aerospace Technologies backlog, which includes defense and commercial OEM work, stood at a record $\mathbf{\$39}$ billion in November $\mathbf{2025}$.

The company's $\mathbf{2025}$ guidance for total sales is $\mathbf{\$39.6}$ billion to $\mathbf{\$40.6}$ billion, showing the scale of the businesses relying on these external relationships.

• Aerospace OEM contracts renewal timing: $\mathbf{2027}$ expiration/renewal window.
• Pricing realization from OEM contracts expected: Second half of $\mathbf{2026}$.
• Vertical Aerospace VX4 delivery target: At least $\mathbf{150}$ aircraft by $\mathbf{2030}$.
• Defense and space sales growth (Q4 $\mathbf{2024}$): $\mathbf{14\%}$.

Finance: finalize the $\mathbf{2026}$ capital allocation plan for the pre-spinoff entities by end of Q1 $\mathbf{2026}$.

Honeywell International Inc. (HON) - Canvas Business Model: Key Activities

You're looking at the core engine driving Honeywell International Inc. (HON) right now-it's all about executing massive, complex structural changes while simultaneously pushing innovation and integrating big new purchases. It's a lot to manage, but the numbers show they're making headway.

Executing the Three-Way Separation

The biggest activity is the phased breakup of the conglomerate. This isn't a quick flip; it's a deliberate, multi-year effort to create three distinct, pure-play public companies. The first major step, the spin-off of the Advanced Materials business, branded as Solstice, was set for completion on October 30, 2025. This separation is expected to reduce full-year 2025 sales by $0.7 billion and adjusted earnings per share by $0.21, though Honeywell anticipates receiving a $1.5 billion dividend from the spun-off entity. The remaining two pieces, Honeywell Automation and Honeywell Aerospace, are targeted for separation in the second half of 2026. The company is already aligning its internal reporting, planning a new, simplified structure focused on cohesive business models to take effect starting in the first quarter 2026. This whole process follows a July 2025 announcement that refined the split to focus on aerospace, building technologies, and industrial automation, while evaluating strategic alternatives for the Productivity Solutions and Services (PSS) and Warehouse and Workflow Solutions (WWS) businesses.

R&D in Automation, SAF, and Quantum Computing

Honeywell International Inc. is heavily investing in its future megatrends, particularly through its involvement with Quantinuum. The quantum computing arm recently secured a significant capital infusion, raising over $600 million at a $10 billion pre-money valuation. This funding is directly aimed at scaling quantum computing, including the anticipated launch of the next-generation system, Helios, slated for release this year. Furthermore, Honeywell is active in the energy transition space, with its technology set to fuel a Syzygy Plasmonics Renewable Energy SAF Project. The core automation strategy involves integrating deep domain expertise with AI, cloud, and edge technology to deliver connected solutions.

Manufacturing Complex, Highly-Engineered Products

The manufacturing backbone remains critical, especially for the Aerospace Technologies segment, which showed significant strength in Q3 2025. Organic sales growth in Aerospace Technologies hit 12% year-over-year in that quarter. Specifically, the commercial aftermarket within Aerospace grew by 19% in Q3 2025. Also, the defense and space business posted its seventh consecutive quarter of double-digit growth, increasing by 10% year-over-year. This production capability supports key customers like Boeing and Airbus.

Integrating Major 2025 Acquisitions

You can see the immediate impact of recent acquisitions on the portfolio transformation. Honeywell completed the $2.16 billion, all-cash acquisition of Sundyne on June 9, 2025. Sundyne, which adds approximately 1,000 skilled employees, is expected to be immediately accretive to sales growth and segment margins in its first full year of ownership. This follows a broader trend: since December 2023, Honeywell has announced approximately $13.5 billion of accretive acquisitions. Looking forward, the company agreed to purchase Johnson Matthey's catalyst technologies business for 1.8 billion pounds (about $2.4 billion), with a closing expected in 2026.

Managing a Record Long-Term Order Backlog

The demand pipeline is robust, which is key as the company navigates the separations. Orders across all four segments surged by 22% year-over-year in Q3 2025, pushing the total backlog to a new record. That record backlog stands at $39.1 billion as of the third quarter of 2025. Here's a quick look at the order momentum:

• Orders growth year-over-year (Q3 2025): 22%
• Total record backlog (Q3 2025): $39.1 billion
• Book-to-bill ratio (Q3 2025): 1.1x

This strong order intake suggests future revenue visibility, which is vital when restructuring the core business.

Honeywell International Inc. (HON) - Canvas Business Model: Key Resources

You're looking at the core assets that let Honeywell International Inc. (HON) execute its strategy, especially as it moves toward its three-way separation. These aren't just things they own; they are the engines driving future performance.

The foundation rests on a global intellectual property portfolio, which supports growth in regulatory-driven markets, like the one served by its UOP catalysts business, which saw double-digit organic sales growth in the third quarter of 2025. This IP is backed by specialized engineering talent, with Honeywell utilizing over 10,000 engineers across the world to support its core businesses. The value of this intangible foundation is reflected on the balance sheet; as of the third quarter of 2025, net other intangible assets stood at $7,149 million.

The digital backbone is the Honeywell Forge IoT software platform and its integrated AI capabilities. Management highlighted in late 2025 that they spent the last five years investing in Forge to connect their installed base and deliver high ROI productivity insights to customers, focusing on outcome services and annual recurring revenue for software. This platform, along with the Honeywell Accelerator operating system, provides the tools, processes, and best practices for continuous productivity, innovation, and end-to-end standardization across the enterprise. The Accelerator system is key to achieving margin expansion goals through productivity actions.

Physical assets include specialized manufacturing facilities critical for the Aerospace Technologies segment, which delivered strong organic sales growth of 12% year-over-year in the third quarter of 2025, driven by commercial aftermarket and defense and space. These facilities support the production of complex components and technologies underpinning the company's long-cycle businesses.

Finally, a strong balance sheet provides the financial flexibility to support operations and capital deployment, including the recent acquisition of Sundyne for approximately $2.16 billion in an all-cash transaction announced earlier in 2025. Management reaffirmed its full-year 2025 guidance for free cash flow to be in the range of $5.2 billion to $5.6 billion, which includes the impact of the Solstice Advanced Materials spin-off completed in October 2025.

Here's a quick look at the scale of some of these key resources as of the latest reported data:

Key Resource Metric	Value (as of late 2025)	Context
2025 Free Cash Flow Guidance	$5.2 billion to $5.6 billion	Updated Q3 2025 outlook
Net Other Intangible Assets	$7,149 million	Balance Sheet as of Q3 2025
Engineering Talent Pool	Over 10,000	Global resources supporting core businesses
Aerospace Technologies Organic Sales Growth	12%	Year-over-year growth in Q3 2025

Finance: draft the 13-week cash flow view incorporating the Q3 FCF guidance by Friday.

Honeywell International Inc. (HON) - Canvas Business Model: Value Propositions

You're looking at the core offerings Honeywell International Inc. (HON) delivers to its customers as of late 2025, right before major portfolio separations. These propositions are deeply tied to tangible performance improvements and financial outcomes.

Increased aircraft efficiency and safety for commercial and defense customers.

The Aerospace Technologies segment is showing significant strength, which speaks directly to the value of its high-reliability components and software. For the third quarter of 2025, Aerospace Technologies sales grew organically by 12% year over year, driven by defense and commercial aftermarket strength. This momentum follows a Q2 2025 where this division saw sales jump 10.7% to $4.31 billion. Software like Honeywell Forge Performance+ for Aerospace helps Maintenance, Repair, and Overhaul (MRO) teams prioritize tasks with the highest operational impact, aiming to decrease maintenance times and increase asset utilization. Furthermore, safety improvements are evident in the broader industry context, where the FAA is using AI to identify hotspots of potentially unsafe flight operations following incidents like the January 2025 DCA collision.

Industrial process optimization via automation and software (Honeywell Forge).

Honeywell Forge, the flagship Industrial Internet of Things (IIoT) software platform, is central to uniting real-time data across assets and processes to enable intelligent operations. This platform underpins the value across segments. For instance, in the Energy and Sustainability Solutions area, Honeywell expanded its Smart Energy portfolio in August 2025 by acquiring three utility platforms from SparkMeter, combining them with Honeywell Forge Performance+ for Utilities to optimize grid assets. While the Honeywell Forge Services suite for flight planning was discontinued by April 30, 2025, the core Forge platform remains a strategic digital pillar for the remaining businesses.

Sustainable solutions for energy transition (e.g., Solstice refrigerants, UOP).

Honeywell International Inc. is actively positioning its sustainability-focused offerings for independence, with the Solstice Advanced Materials spin-off targeted for completion on October 30, 2025. This business, including Solstice refrigerants, targets a low-GWP refrigerant market projected to reach $117 billion by 2037. The Solstice business is projected to generate $6.7 billion in revenue by 2026, supported by EBITDA margins exceeding 25%. A concrete example of this value is the partnership with Bosch, where the use of Solstice 454B refrigerant in new heat pump series reduced greenhouse gas emissions by 78% compared to traditional refrigerants. The Energy and Sustainability Solutions segment itself saw organic sales increase by 6% in Q3 2025, with UOP showing significant growth.

Integrated building management for energy savings and security.

The Building Automation segment is a clear growth driver, reporting revenue of $1.83 billion in Q2 2025, representing an increase of +16.2% compared to the previous year. This growth is fueled by demand for integrated, energy-efficient systems. Honeywell's own research from February 2025 indicated that 84% of commercial building decision-makers plan to increase their use of Artificial Intelligence (AI) to streamline energy management and improve security. The Honeywell Forge Energy Optimization system, a cloud-based solution, demonstrated its capability by achieving an initial 10% energy savings in a pilot at Hamdan Bin Mohammed Smart University, beyond savings already realized in that smart building. Furthermore, building products saw 9% growth in Q2 2025.

High-reliability, mission-critical components for demanding environments.

The overall portfolio strength is reflected in the company's financial guidance. For the full year 2025, Honeywell updated its sales expectation to a range of $40.7 billion to $40.9 billion, with an organic sales growth guidance of approximately 6%. Segment margin for the full year 2025 is anticipated to be between 23.0% to 23.2%. The company's backlog stood at a record $35.3 billion at the end of 2024, indicating strong customer commitment to long-term, high-reliability solutions. The planned separation of Aerospace and Advanced Materials is intended to simplify the remaining Honeywell portfolio around core automation and energy transition, focusing on these high-margin, mission-critical areas.

Here is a snapshot of the financial context supporting these value propositions as of late 2025:

Metric	Value/Range (Late 2025 Data)	Context/Period
FY 2025 Updated Sales Guidance	$40.7 billion to $40.9 billion	Full Year 2025
FY 2025 Organic Sales Growth Guidance	Approximately 6%	Full Year 2025
Aerospace Technologies Organic Sales Growth	12%	Three Months Ended September 30, 2025
Building Automation Q2 2025 Revenue	$1.83 billion	Second Quarter 2025
Solstice Projected Revenue	$6.7 billion	By 2026
Solstice EBITDA Margin	Greater than 25%	Expected Post-Spin-off
Total Company Backlog	$35.3 billion	End of 2024

The value proposition is also supported by the adoption of digital tools:

• 84% of commercial building decision-makers plan to increase AI use for energy management and security.
• Honeywell Forge Energy Optimization pilot delivered an initial 10% energy savings.
• Solstice 454B partnership with Bosch achieved 78% reduction in greenhouse gas emissions in specific applications.
• The company repurchased $1.7 billion of its shares in Q2 2025 as part of capital deployment ahead of separations.

Honeywell International Inc. (HON) - Canvas Business Model: Customer Relationships

You're looking at how Honeywell International Inc. manages its deep, established customer ties while actively reshaping its structure into three independent companies. The relationships are critical, especially as the Aerospace business, which historically accounted for about 40% of total revenue, prepares for its separation.

Long-term, high-touch relationships with major OEM and government clients.

Honeywell International Inc. maintains deep relationships with large defense and aerospace original equipment manufacturers (OEMs) like Boeing and Airbus, alongside significant U.S. government work. The company's backlog grew 22% organically from the previous year to $11.9 billion in the third quarter of 2025, reflecting strong commitments from these key customers.

The nature of these relationships is evidenced by contract activity:

• Total award payments seen to Honeywell International Inc. over the last year reached $580,964,273.
• A contract modification for the U.S. Army's M1 Abrams tank support (TIGER III program) was expected to finish by September 2025.
• In February 2025, Honeywell was awarded a multi-million dollar contract by the U.S. government's Intelligence Advanced Research Projects Activity (IARPA).

Here's a snapshot of recent government contract activity:

Contract/Program Example	Award Payment Amount (Last Year)	Contracting Agency Context
TIGER DO 13 ILSC	$200,897,730	Department of Defense
ENTERPRISE PERFORMANCE BASED LOGISTICS CONTRACT FOR SECONDARY POWER SUPPORT	$111,721,359	Department of the Army
TIGER III - HARDWARE DO 14 ILSC	$48,142,675	Department of Defense

Dedicated service and maintenance contracts for the large installed base.

A substantial portion of revenue comes from keeping existing equipment running, which translates directly into high-touch service relationships. Approximately 30% of Honeywell International Inc.'s revenue is derived from recurring aftermarket services. This recurring revenue stream is robust; for instance, the Aerospace division posted a 10.7% jump in sales to US$4.31 billion in the second quarter of 2025, largely driven by aircraft maintenance and repair services as airlines kept older fleets flying.

Co-development and solution selling for complex, multi-year industrial projects.

The focus on an 'outcomes-based, unified automation strategy' involves deep collaboration to solve complex customer problems across end markets. This is supported by a strong commitment to innovation, with Research and Development spending increasing to $1.54 billion in the first half of 2025, representing 4.16% of revenue. The company's overall full-year 2025 organic sales growth target was raised to approximately 6% following Q3 results.

Digital self-service and support for software-as-a-service (SaaS) users.

Honeywell International Inc. is actively transforming its automation business structure to focus on cohesive, synergetic models, which includes digital offerings. While specific user counts for Honeywell's proprietary SaaS offerings aren't public, the company operates within a market where 72% of SaaS users access platforms via mobile devices as of 2025. The strategy involves integrating deep domain expertise with AI, cloud, and edge technology to deliver connected solutions.

Investor relations focused on clear communication during the separation.

Customer relationship management extends to the investment community during the portfolio transformation. Honeywell International Inc. is on track to complete the spin-off of Solstice Advanced Materials by the end of Q4 2025. The larger separation of the Aerospace business is planned for the second half of 2026. To manage this, in November 2025, Honeywell appointed a dedicated Investor Relations lead for the upcoming Honeywell Aerospace spin-off.

Honeywell International Inc. (HON) - Canvas Business Model: Channels

You're looking at how Honeywell International Inc. gets its products and services into the hands of its customers across the globe as of late 2025. The channel strategy is clearly segmented to match the complexity and scale of each business area.

The Aerospace Technologies segment, which is a major part of the business, relies heavily on direct engagement for large original equipment manufacturer (OEM) contracts and a robust aftermarket channel. In the third quarter of 2025, commercial aftermarket sales saw a significant jump of 19% year over year, showing the strength of that service channel. The entire Aerospace Technologies segment posted organic sales growth of 12% in that same quarter.

For the direct sales approach targeting large government and industrial contracts, the scale is reflected in the segment's overall contribution. In the first quarter of fiscal 2026 (ended September 2025), the Aerospace Technologies segment accounted for 32.3% of the company's total business.

The software delivery channel, anchored by the Honeywell Forge platform, is driving digital revenue streams. Honeywell International dominated the building automation and enterprise sustainability segment with a 22% market share, reporting 30% growth specifically through its Forge platform in that market as of late 2025. Management noted encouragement by the execution of connected offerings through Honeywell Forge, driving increased recurring revenue in the portfolio.

The reliance on aftermarket and recurring revenue is a key channel strategy across the board. Based on 2023 figures, the firm was already working diligently to expand its installed base, deriving around 30% of its revenue from recurring aftermarket services.

The channel strategy for Building Products (now largely within the Building Automation segment) leans on a broad distribution network. The overall structure of the company, prior to planned separations, showed Building Automation represented 17% of 2023 company revenue.

Here's a look at the revenue scale associated with these channels based on the latest reported segment data, which gives you a sense of the channel focus:

Business Segment (Channel Focus)	2024 Revenue (Billions USD)	2023 Revenue Share Percentage
Aerospace Technologies (Direct Sales/Aftermarket)	$15.46 B	38.46%
Home And Building Technologies (Distributors)	$8.26 B	20.54%
Energy and Sustainability Solutions (Direct/Software)	$6.43 B	15.99%
Industrial Automation (Direct/Channel Mix)	Data Not Directly Available for 2024 Revenue in Search	29%

The company's overall 2025 full-year sales guidance, reflecting the combined output of all channels, was updated to be between $40.7 billion to $40.9 billion.

For smaller, standardized products, the use of e-commerce platforms is integrated, though specific revenue contribution figures aren't publicly detailed. However, the overall trend shows a push toward digital delivery, as seen with the Honeywell Forge platform. The company is moving toward a simplified structure for its automation businesses starting in the first quarter of 2026, which will include a new segment called Process Automation and Technology, suggesting a refinement of how software and technology solutions are delivered through channels.

• Commercial aftermarket sales growth (Q3 2025): 19% year over year.
• Honeywell Forge platform growth context (late 2025): 30% growth reported in its dominated segment.
• Full-year 2025 organic sales growth target: Approximately 6%.
• Total company backlog as of Q2 2025: Record $35.3 billion.

Finance: draft 13-week cash view by Friday.

Honeywell International Inc. (HON) - Canvas Business Model: Customer Segments

You're looking at the core customer base for Honeywell International Inc. as of late 2025, right in the middle of its major portfolio transformation. Honestly, understanding who buys what tells you where the real money is flowing, especially now with the planned separations underway.

The customer segments Honeywell serves are quite diverse, spanning high-tech defense to industrial maintenance. The company's Q2 2025 reported sales hit $10.4 billion, with the full-year sales guidance raised to between $40.8 billion and $41.3 billion. This revenue base is supported by these distinct customer groups.

Aerospace OEMs, Major Airlines, and Global Defense/Space Agencies

This group is the engine room, making up Honeywell International Inc.'s biggest revenue generator. Demand here has been robust, evidenced by the 10.7 per cent jump in sales to $4.31 billion for the Aerospace Technologies division in the second quarter of 2025. Defense and space specifically saw 13% year-over-year organic growth in Q2 2025. You see this strength reflected in the backlog, which grew 16% from the previous year as of Q2 2025. To be fair, the commercial aftermarket is also a huge part of this, with sales increasing 19% in Q3 2025, driven by air transport. It's worth noting that approximately 30% of Honeywell International Inc.'s total revenue is derived from recurring aftermarket services across the business.

Industrial Process Operators (Petrochemical, Refining, Gas Processing)

These customers fall largely under the Process Solutions umbrella within the broader Industrial Automation segment. While the overall Industrial Automation unit saw flat organic growth in Q2 2025, specific areas showed movement. For instance, UOP, which serves this sector, posted double-digit organic sales growth in Q2 2025. However, by the third quarter, Process Solutions sales were flat year over year, as challenging project demand offset growth in smart energy and thermal solutions. These operators rely on Honeywell International Inc. for critical operational technology.

Commercial Building Owners and Facility Managers

This segment, housed under Building Automation, has been a clear growth driver. In Q2 2025, this segment led with a 16% sales increase. The momentum carried into Q3 2025, where Building Automation added 7% organic growth. Building products within this area, like fire products, even saw double-digit growth for a fourth consecutive quarter. Growth in Building Automation was specifically cited as leading segment profit increases in Q3 2025.

Governments and Utilities Focused on Energy Transition and Sustainability

This group is served by the Energy and Sustainability Solutions business. While specific revenue figures for this segment alone aren't always broken out in the top-line reports, its performance contributes to the overall picture. This area saw 6% organic growth in Q1 2025 and was noted as a driver for segment profit growth in Q3 2025. These customers are focused on deploying solutions related to energy efficiency and cleaner processes.

Here's a quick look at the segment performance that reflects these customer groups in Q2 2025:

Segment	Q2 2025 Sales (Reported)	Q2 2025 Organic Growth	Q2 2024 Sales
Aerospace Technologies	$4.31 billion	6%	$3.891 billion
Building Automation	N/A (Led sales increase)	N/A (Reported 16% sales increase)	N/A
Industrial Automation (Total)	N/A	Flat (0%)	N/A

Logistics and Warehouse Operators (Prior to PSS/WWS Divestiture)

These customers were served by the Productivity Solutions and Services (PSS) and Warehouse and Workflow Solutions (WWS) businesses, which Honeywell International Inc. announced it was evaluating strategic alternatives for in July 2025. Before this evaluation, these units faced headwinds. PSS sales decreased 7% year over year in Q2 2025, driven by weakness in Europe. WWS sales declined 4% in Q2 2025 due to project timing. To give you context on their size before the strategic review, PSS had 2024 revenue of more than $1 billion, and WWS generated nearly $1 billion in 2024 revenue. By Q3 2025, PSS sales were down 3%, though WWS saw growth of 2%.

The company is clearly pivoting away from these logistics-focused units, with the Solstice Advanced Materials spin-off targeted for the fourth quarter of 2025. Finance: draft 13-week cash view by Friday.

Honeywell International Inc. (HON) - Canvas Business Model: Cost Structure

You're looking at the costs Honeywell International Inc. faces as it navigates a major corporate transformation, which means the cost structure isn't just about making widgets; it's about the cost of unmaking the current structure too. Here's the quick math on where the cash is going based on late 2025 figures.

High fixed costs from R&D investments are a constant, reflecting the need to stay ahead in complex industrial and aerospace tech. For the first quarter of 2025, Research & Development Expenses hit $439 million, against Net Sales of $9,822 million. This translates to an R&D intensity of about 4.47% of sales for that period, which is right in line with the expected high fixed cost base you mentioned.

The Cost of Goods Sold (COGS) remains a massive component, naturally, given the complex hardware manufacturing across its segments. Looking at the second quarter of 2025, the Cost of Sales alone was $6,329 million against Net Sales of $10,352 million. This high COGS ratio is the direct cost of producing everything from avionics to process controls.

The strategic overhaul introduces significant, non-recurring costs. Honeywell announced its intent to pursue a three-way separation, targeting completion in the second half of 2026. While specific, isolated separation costs for the full year 2025 aren't explicitly itemized in every release, the process itself drives expenses. For instance, operating income margin in one segment showed pressure, possibly linked to restructuring costs or integration expenses related to the strategic shift. Furthermore, the company is actively managing portfolio transformation, which includes the planned spin-off of the Advanced Materials business, slated for late 2025 or early 2026.

Capital deployment costs are significant, showing management's commitment to shareholder returns and growth investments. In the first quarter of 2025, Honeywell deployed a total of $2.9 billion in capital across share repurchases, dividends, and Capital Expenditures (CapEx). This deployment included $1.9 billion in share repurchases during Q1 2025 alone. The company has a commitment to deploy at least $25 billion toward these uses through 2025.

To manage external pressures, supply chain management costs are factored in, particularly due to trade uncertainty. Honeywell estimated its exposure to tariffs in place today to be about $500 million for 2025 before any mitigation measures were taken. The company is using strategies like raising prices and focusing on local markets to offset this, which impacts the overall cost base.

Here is a snapshot of key cost-related financial metrics from the first half of 2025:

Cost/Expense Category	Period/Date	Amount (Millions USD)	Context/Notes
R&D Expenses	Q1 2025	$439	Against Net Sales of $9,822 million
Cost of Sales	Q2 2025	$6,329	Against Net Sales of $10,352 million
Total Costs and Expenses	Q1 2025	$7,938	Up from $7,234 million in Q1 2024
Share Repurchases	Q1 2025	$1,902	Part of $2.9 billion total capital deployment
Acquisition Cost (Sundyne)	Q1 2025	$2,200	Announced acquisition cost
Estimated Tariff Exposure	Full Year 2025 Estimate	$500	Before mitigation efforts

The company's overall capital allocation commitment through 2025 is substantial:

• Committed capital deployment target through 2025: $25 billion.
• Capital deployed in Q1 2025: $2.9 billion.
• Interest and other financial charges increased in Q1 2025 to $286 million from $220 million.
• The company is proceeding with planned separations, targeting completion in the second half of 2026.

Finance: draft 13-week cash view by Friday.

Honeywell International Inc. (HON) - Canvas Business Model: Revenue Streams

Honeywell International Inc.'s revenue generation is heavily weighted toward its core industrial and aerospace technology segments, with a growing emphasis on recurring software and high-margin services.

Full-year 2025 sales are projected between $40.7 billion and $40.9 billion, reflecting an organic sales growth target of approximately 6% for the year, even after accounting for the Solstice Advanced Materials spin-off impact of $700 million in expected reduced 2025 sales.

The core of the revenue base comes from product and solutions sales across its operating segments, as evidenced by the third-quarter 2025 reported sales:

Segment	Q3 2025 Reported Sales
Aerospace Technologies	$4.51 billion
Industrial Automation	$2.27 billion
Building Automation	$1.88 billion
Energy and Sustainability Solutions	$1.74 billion

Licensing and technology fees from UOP process technology form a distinct, though sometimes volatile, revenue stream. In the second quarter of 2025, UOP saw growth of 16%, driven by strong petrochemical catalyst shipments and higher licensing sales volumes in gas processing. However, this trend reversed in the third quarter of 2025, where UOP sales declined 13% due to anticipated licensing delays and lower catalyst shipment volumes, which were only partially offset by growth in sustainability solutions. This segment's revenue is being strategically bolstered by the announced agreement in May 2025 to acquire Johnson Matthey's Catalyst Technologies business for approximately £1.8bn, which directly consolidates process-technology licensing under Honeywell's UOP/ESS umbrella.

Software-as-a-Service (SaaS) subscriptions from Honeywell Forge are a key component of the company's strategy to increase recurring revenue streams. Management noted encouragement from the execution of connected offerings through the Honeywell Forge platform, driving increased recurring revenue in the portfolio. While specific 2025 SaaS revenue is not explicitly detailed, the overall company reported 38% recurring revenue in 2024, indicating the significance of this model.

Long-cycle service and aftermarket revenue, which is typically high-margin, is a critical driver, particularly within Aerospace Technologies. Commercial aftermarket sales in the third quarter of 2025 increased 19% from the previous year, supported by ongoing supply chain unlock across business jet and air transport end markets. The acquisition of the catalyst manufacturing and aftermarket services unit from Johnson Matthey is also set to expand Honeywell's ability to sell integrated catalyst supply alongside licensed process technologies.

• Product sales include engines, control systems, and sensors across the four main segments.
• The backlog stood at a record high following Q3 2025, with orders rising 22% organically from the previous year to $11.9 billion.
• Aerospace Technologies saw double-digit organic sales growth in Q3 2025, increasing 12% organically year-over-year.
• Building Automation organic sales increased 7% in Q3 2025.