Watsco Inc. used its annual Investor Day to outline how artificial intelligence is being deployed across its digital, ecommerce and customer-service platforms, positioning the HVAC distributor to accelerate growth and expand margins as AI adoption increases across the industry.
Speaking at the event, Aaron (A.J.) Nahmad, president of Watsco, said the company’s AI initiatives are built on years of investment in data and digital infrastructure rather than a recent pivot toward emerging technologies.
“Now AI has all this data to use and to leverage to deliver new tools and technology to take us to that next generation of capabilities,” Nahmad said during the presentation. “We have more data, I think, than anybody else in this industry.”
Nahmad said that data—collected across ecommerce platforms, mobile applications, analytics systems and Salesforce-based customer service tools—now gives Watsco the ability to apply AI across multiple parts of the business.
AI embedded across ecommerce, analytics and service
Nahmad said Watsco is applying AI across its analytics capabilities, ecommerce platforms, mobile apps and customer-facing service tools, as well as within Watsco Ventures businesses such as OnCall Air.
“AI has all this data to use and to leverage,” Nahmad said. “It sets us up beautifully for what AI can and is doing already.”
Executives said AI is already being rolled out within customer service and technical support teams, with additional applications planned across the digital ecosystem.
Digital commerce at scale
Watsco tied its AI strategy to the scale of its existing digital operation, particularly at Carrier Enterprise, the company’s largest operating unit and a joint venture with Carrier.
According to Investor Day materials, Watsco now generates approximately $2.5 billion in annual ecommerce sales, including about $1.6 billion at Carrier Enterprise. In some Carrier Enterprise regions, roughly 80% of total sales now flow through digital channels.
Edward Gaffney, senior vice president of digital transformation at Carrier Enterprise, said the company processes approximately 350 to 450 orders per hour, or about 750,000 orders annually, volume that historically required manual handling by sales representatives and customer service teams.
“Those orders were all processed either by a customer service team or by a sales rep,” Gaffney said. “That’s all time now that the sales reps have to focus with customers on other things other than taking orders.”
Product data as a foundation for AI and margin growth
Gaffney said Watsco’s shared product information management (PIM) system—containing data on more than 900,000 SKUs—is central to both its ecommerce performance and future AI initiatives.
“PIM data is the long pole in the tent,” Gaffney said, referring to the complexity of assembling accurate product images, specifications and attributes across thousands of suppliers.
That data enables system-configuration tools, inventory-aware ordering and automated recommendations that increase line items per invoice. Executives said online orders consistently include more accessories and installation components than offline transactions, supporting margin expansion.
During the session, Aaron Nahmad, co-vice chairman and president of Watsco, underscored the advantage of automated digital prompts.
“The moniker ‘would you like fries with that’ works, especially when you ask that question digitally every time somebody is placing an order,” Aaron Nahmad said.
Barry S. Logan, executive vice president of planning and strategy, added that automation ensures consistency.
“No fatigue, no Friday afternoon lull, no after-lunch sleepiness,” Logan said. “Technology is going to do it every time.”
Workflow tools for contractors
Watsco highlighted several digital tools designed to reduce contractor downtime, including Pickup Express for scheduled branch pickup and Delivery Express for rapid jobsite delivery. These tools are integrated into Watsco’s ecommerce platform and mobile applications used by contractors in the field.
Gaffney said the company’s digital ecosystem extends beyond ordering to cover pre-sale, fulfillment and post-sale interactions.
“We want a strategic partnership with all of our customers so that when they grow, we grow,” Gaffney said.
AI applied to training and support
Executives also described how AI is being applied to technical support and training. Data from customer service interactions captured in Salesforce is being analyzed to identify common issues and guide training recommendations through Carrier Enterprise’s online education platform.
The approach is intended to reduce repeat support calls while addressing the industry’s ongoing shortage of trained technicians.
Linked to long-term growth targets
At the Investor Day, Watsco executives also tied AI and digital investments to a long-term operating framework referred to internally as “10-30-5,” targeting $10 billion in revenue, 30% gross margins and five inventory turns. The company currently generates approximately $7.5 billion in annual revenue, with gross margins around 27%, based on recent disclosures.
“This is a publicly traded company,” Albert Nahmad said. “Our valuation is driven on our rate of growth, and it is our mission every day to drive growth.”
Looking ahead
Executives said the HVAC contracting market remains early in digital adoption, leaving significant runway for AI-enabled growth.
Watsco’s message at the Investor Day was consistent: the company believes its digital foundation is already in place, and artificial intelligence will be used to extend that advantage across ecommerce, customer service and contractor operations.
