Johnson Controls Reports Q4 and FY26 Results; Initiates FY27 Guidance

• Q4 sales increased 10% and organic sales increased 12%*
• Q4 GAAP EPS of $1.60; Q4 Adjusted EPS* of $1.66*
• Q4 orders +44% organically year-over-year
• Backlog of $23.0 billion increased 43% organically year-over-year

^*  This earnings release contains non-GAAP financial measures. Definitions and reconciliations of the non-GAAP financial measures can be found in the attached footnotes. Non-GAAP measures should be considered in addition to, and not as replacements for, the most comparable GAAP measures.

CORK, Ireland, Oct. 27, 2026 /PRNewswire/ -- Johnson Controls International plc (NYSE: JCI), a global leader in thermal management, mission-critical building systems, energy efficiency, and decarbonization, is proud to announce fiscal fourth quarter 2026 GAAP earnings per share ("EPS") of $1.60. Adjusted EPS was $1.66.

Q4 sales increased 10% to $7.1 billion and organic sales increased 12%.

For the quarter, GAAP net income from continuing operations attributable to JCI was $967 million and adjusted net income from continuing operations was $1.0 billion. Cash provided by operating activities was $1.3 billion. Free cash flow was $1.1 billion and adjusted free cash flow was $1.1 billion.

"We finished fiscal 2026 with significant momentum, delivering more than 8% organic revenue growth, double-digit adjusted EPS growth and strong free cash flow conversion," said Joakim Weidemanis, Chief Executive Officer of Johnson Controls. "Our strong topline growth, combined with continued productivity and simplification improvements, led to margin expansion across all three segments. That performance reflects the strength of our differentiated technological capabilities, unmatched field presence and proprietary business system, which help us move with speed, win with customers and strengthen performance. With record backlog and sustained customer demand, we enter fiscal 2027 with confidence in our ability to continue creating value for customers and shareholders."

FISCAL Q4 SEGMENT RESULTS

The financial highlights presented in the tables below exclude discontinued operations and are in accordance with GAAP, unless otherwise indicated. All comparisons are to the fourth quarter of fiscal 2025. Orders and backlog metrics included in the release relate to the Company's Solutions and Services based businesses. Orders prior to Q1 2026 exclude certain equipment-only sales for longer cycle projects. Backlog has been restated to include this new category.

A slide presentation to accompany the results can be found in the Investor Relations section of Johnson Controls' website at http://investors.johnsoncontrols.com.

Americas

Sales in the quarter of $4.9 billion increased 14% over the prior year. Organic sales also increased 14% led by continued strength in both Applied HVAC & Controls. Products and Systems sales increased 16% and Services increased 10% organically.

Excluding acquisitions and divestitures and adjusted for foreign currency, orders increased 58% year-over-year and backlog of $17.8 billion increased 54% year-over-year. The increase in orders and backlog was supported by sustained demand for data centers and our differentiated technology and capabilities.

Segment EBIT margin increased 250 bp and adjusted Segment EBITA margin increased 210 bp compared to the prior year. The increases were primarily driven by strong operating leverage on higher revenue and favorable business mix. Adjusted Segment EBITA in both Q4 2026 and Q4 2025 excludes transformation costs.

EMEA (Europe, Middle East, Africa)

Sales in the quarter of $1.3 billion decreased 2% over the prior year. Organic sales grew 3% versus the prior year, with continued pressure in the region due to the conflicts in the Middle East. Products and Systems sales remained flat and Services increased 6% organically.

Excluding acquisitions and divestitures and adjusted for foreign currency, orders increased 12% year-over-year and backlog of $3.1 billion increased 18% year-over-year.

Segment EBIT margin increased 100 bps and adjusted Segment EBITA margin increased 80 bps compared to the prior year. The increases were primarily driven by favorable pricing and productivity improvements, partially offset by the impact of business divestitures. Adjusted Segment EBITA in both Q4 2026 and Q4 2025 excludes transformation costs.

APAC (Asia Pacific) 

Sales in the quarter of $871 million increased 12% versus the prior year. Organic sales increased 13% versus the prior year, led by 15% growth in Product and Systems and continued strength in Applied HVAC.  

Excluding acquisitions and divestitures and adjusted for foreign currency, orders increased 11% and backlog of $2.1 billion increased 12% year-over-year.

Segment EBIT margin increased 120 bps and adjusted Segment EBITA margin increased 110 bps compared to the prior year, primarily driven by productivity improvements and higher revenues.

Corporate

Adjusted Corporate expense in both Q4 2026 and Q4 2025 excludes certain transaction/separation costs and transformation costs. In addition, Q4 2025 excludes accelerated depreciation of ERP assets. The decrease year-over-year is primarily due to ongoing cost reduction actions across corporate functions and the timing of certain corporate expenses.

OTHER Q4 ITEMS

• The Company paid dividends of $242 million.

GUIDANCE

The following forward-looking statements are non-GAAP financial measures. These non-GAAP financial measures are derived by excluding certain amounts from the corresponding financial measures determined in accordance with GAAP. The determination of the amounts excluded is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period and the high variability of certain amounts, such as mark-to-market adjustments. Organic revenue growth excludes the effect of acquisitions, divestitures and foreign currency. The Company is unable to present a quantitative reconciliation of the aforementioned forward-looking non-GAAP financial measures to its most directly comparable forward-looking GAAP financial measures because such information is not available, and management cannot reliably predict the necessary components of such GAAP measures without unreasonable effort or expense. The unavailable information could have a significant impact on the Company's fiscal 2027 first quarter and full year GAAP financial results.

The Company initiated fiscal 2027 first quarter continuing operations guidance:

• Organic sales growth of 12% to 14%
• Operating leverage of 30% to 35%
• Adjusted EPS of $1.15 to $1.20

The Company initiated fiscal 2027 full year continuing operations guidance:

• Organic sales growth of 11% to 12%
• Operating leverage of 30%+
• Adjusted EPS of $6.15 to $6.30
• Adjusted free cash flow conversion of ~95%

CONFERENCE CALL & WEBCAST INFO

Johnson Controls will host a conference call to discuss this quarter's results at 8:30 a.m. ET today, which can be accessed via webcast at https://johnson-controls-q4-2026-earnings.open-exchange.net. A slide presentation will accompany the prepared remarks and has been posted on the investor relations section of the Johnson Controls website at https://investors.johnsoncontrols.com/news-and-events/events-and-presentations. A replay will be made available approximately two hours following the conclusion of the conference call.

ABOUT JOHNSON CONTROLS

Johnson Controls, a global leader in thermal management, mission-critical building systems, energy efficiency, and decarbonization, helps customers use energy more productively, reduce carbon emissions, and operate with the precision and resilience required in rapidly expanding industries such as data centers, healthcare, pharmaceuticals, advanced manufacturing, and higher education.

For more than 140 years, Johnson Controls has delivered performance where it really matters. Backed by advanced technology, lifecycle services and an industry-leading field organization, we elevate customer performance, turn goals into real-world results and help move society forward.

Visit johnsoncontrols.com for more information and follow @Johnson Controls on social platforms.

JOHNSON CONTROLS CONTACTS:

JOHNSON CONTROLS INTERNATIONAL PLC CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Johnson Controls International plc (the "Company") has made statements in this document that are forward-looking and therefore are subject to risks and uncertainties. All statements in this document other than statements of historical fact are, or could be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In this document, statements regarding the Company's future financial position, sales, costs, earnings, cash flows, other measures of results of operations, synergies and integration opportunities, capital expenditures, debt levels and market outlook are forward-looking statements. Words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "should," "forecast," "project" or "plan" and terms of similar meaning are also generally intended to identify forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. The Company cautions that these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company's control, that could cause the Company's actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to: the ability to develop or acquire new, competitively differentiated products and technologies that achieve market acceptance and meet applicable quality and regulatory requirements; the ability to manage general economic, business and capital market conditions, including the impacts of trade restrictions, recessions, economic downturns and global price inflation; the ability to manage macroeconomic and geopolitical volatility, including changes to laws or policies governing foreign trade, including tariffs, economic sanctions, foreign exchange and capital controls, import/export controls or other trade restrictions as well as any associated supply chain disruptions; fluctuations in demand in key verticals, including data centers and other mission-critical segments, as well as risks associated with customer concentration and the conversion of backlog to revenue; the ability to execute on the Company's business system and operating model to drive organizational improvement; the ability to innovate and adapt to emerging technologies, ideas and trends in the marketplace, including the incorporation of technologies such as artificial intelligence; fluctuations in the cost and availability of public and private financing for customers; the ability to manage disruptions caused by  catastrophic or geopolitical events, such as international conflicts (including the Russia-Ukraine conflict and conflicts in the Middle East), armed conflict, terrorism, political change, natural disasters, extreme weather, pandemics and outbreaks of contagious diseases and other adverse public health developments; the ability to successfully execute and complete portfolio simplification actions, as well as the possibility that the expected benefits of such actions will not be realized or will not be realized within the expected time frame; managing the risks and impacts of potential and actual security breaches, cyberattacks, privacy breaches or data breaches, maintaining and improving the capacity, reliability and security of the Company's enterprise information technology infrastructure; the ability to manage the lifecycle cybersecurity risk in the development, deployment and operation of the Company's digital platforms and services; fluctuations in currency exchange rates; the ability to hire and retain senior management and other key personnel; changes or uncertainty in laws, regulations, rates, policies, or interpretations that impact business operations or tax status; the ability to adapt to global climate change, climate change regulation and successfully meet the Company's public sustainability commitments; the outcome of litigation and governmental proceedings; the risk of infringement or expiration of intellectual property rights; the ability to manage disruptions caused by catastrophic or geopolitical events, such as natural disasters, armed conflict, political change, climate change, pandemics and outbreaks of contagious diseases and other adverse public health developments; any delay or inability of the Company to realize the expected benefits and synergies of recent portfolio transactions; the tax treatment of recent portfolio transactions; significant transaction costs and/or unknown liabilities associated with such transactions; labor shortages, work stoppages, union negotiations, labor disputes and other matters associated with the labor force; and the cancellation of or changes to commercial arrangements. A detailed discussion of risks related to Johnson Controls' business is included in the section entitled "Risk Factors" (refer to Part I, Item 1A, of this Annual Report on Form 10-K). The forward-looking statements included in this document are made only as of the date of this document, unless otherwise specified, and, except as required by law, Johnson Controls assumes no obligation, and disclaims any obligation, to update such statements to reflect events or circumstances occurring after the date of this document.

FOOTNOTES

1.   Sale of Residential and Light Commercial HVAC Business

In July 2025, the Company sold its Residential and Light Commercial ("R&LC") HVAC business, including the North America Ducted business and the global Residential joint venture with Hitachi Global Life Solutions, Inc. ("Hitachi"), of which Johnson Controls owned 60% and Hitachi owned 40%. The R&LC HVAC business met the criteria to be classified as a discontinued operation and, as a result, its historical financial results are reflected in the consolidated financial statements as a discontinued operation.

2.   Non-GAAP Measures

The Company reports various non-GAAP measures in this earnings release and the related earnings presentation.  Non-GAAP measures should be considered in addition to, and not as replacements for, the most comparable GAAP measures. Refer to the following footnotes for further information on the calculations of the non-GAAP measures and reconciliations of the non-GAAP measures to the most comparable GAAP measures.

Organic sales

Organic sales growth excludes the impact of acquisitions, divestitures and foreign currency. Management believes organic sales growth is useful to investors in understanding period-over-period sales results and trends.

Cash flow

Management believes free cash flow and adjusted free cash flow measures are useful to investors in understanding the strength of the Company and its ability to generate cash. These non-GAAP measures can also be used to evaluate the Company's ability to generate cash flow from operations and the impact that this cash flow has on its liquidity. Management also believes adjusted free cash flows are useful to investors in understanding period-over-period cash flows, cash trends and ongoing cash flows of the Company.

Adjusted free cash flow and adjusted free cash flow conversion are non-GAAP measures which exclude the impacts of the following:

• JC Capital cash flows primarily include activity associated with finance/notes receivables and inventory and/or capital expenditures related to lease arrangements. JC Capital net income is primarily related to interest income on the finance/notes receivable and profit recognized on arrangements with sales-type lease components.

• The impact of the accounts receivables factoring program which was discontinued in March 2024.

• Cash payments related to the water systems AFFF settlement and cash receipts for AFFF-related insurance recoveries.

• Prepayment of royalty fees associated with certain IP licensed to divested businesses.

• Discrete tax payments are non-recurring tax settlements for certain non-US jurisdictions.

Adjusted financial measures

Adjusted financial measures are non-GAAP measures that are derived by excluding certain amounts from the corresponding financial measures determined in accordance with GAAP. The determination of the excluded amounts is a matter of management judgment and depends upon the nature and variability of the underlying expense or income amounts and other factors.

As detailed in the tables included in footnotes four through seven, the following items were excluded from certain financial measures:

• Net mark-to-market adjustments are the result of adjusting restricted asbestos investments and pension and postretirement plan assets to their current market value. These adjustments may have a favorable or unfavorable impact on results. 

• Restructuring and impairment costs represents restructuring costs attributable to Johnson Controls including costs associated with exit plans or other restructuring plans that will have a more significant impact on the underlying cost structure of the organization. Impairment costs primarily relate to write-downs of goodwill, intangible assets and assets held for sale to their fair value.

• Water systems AFFF settlement and insurance recoveries include amounts related to a settlement with a nationwide class of public water systems concerning the use of AFFF manufactured and sold by a subsidiary of the Company, and AFFF-related insurance recoveries.

• Transaction/separation costs include costs associated with significant mergers and acquisitions.

• Transformation costs represent incremental expenses incurred in association with strategic growth initiatives and cost saving opportunities in order to realize the benefits of portfolio simplification and the Company's lifecycle solutions strategy.

• ERP asset - accelerated depreciation represents a change in ERP strategy within the EMEA segment, which led to certain assets being abandoned and the useful lives reduced.

• Gain on divestiture relates to the sale of the ADT Mexico Security business.  

• Discrete tax items, net includes the net impact of discrete tax items within the period, including the following types of items: changes in estimates associated with valuation allowances, changes in estimates associated with reserves for uncertain tax positions, withholding taxes recorded upon changes in indefinite re-investment assertions for businesses to be disposed of and impacts from statutory rate changes.

• Related tax impact includes the tax impact of the various excluded items.

Management believes the exclusion of these items is useful to investors due to the unusual nature and/or magnitude of the amounts. When considered together with unadjusted amounts, adjusted financial measures are useful to investors in understanding period-over-period operating results, business trends and ongoing operations of the Company. Management may also use these metrics as guides in forecasting, budgeting and long-term planning processes and for compensation purposes.

Operating leverage

Operating leverage is defined as the change in adjusted EBIT for the period, divided by the corresponding change in net revenues. Management believes operating leverage is a useful metric to reflect enterprise value creation, capturing the impact of scale and cost discipline across the organization.

Debt ratios

Management believes that net debt to adjusted EBITDA, a non-GAAP measure, is useful to understanding the Company's financial condition as the ratio provides an overview of the extent to which the Company relies on external debt financing for its funding and also is a measure of risk to its shareholders.

3.   Sales

The following tables detail the changes in sales from continuing operations attributable to organic growth, foreign currency, acquisitions, divestitures and other (unaudited):

4.   Cash Flow, Free Cash Flow and Free Cash Flow Conversion

The following table includes operating cash flow conversion, free cash flow and free cash flow conversion (unaudited):

The following table includes adjusted free cash flow and adjusted free cash flow conversion (unaudited):

5.   EBIT, Segment Profitability and Corporate Expense

The following table reconciles income from continuing operations before income taxes to EBIT and adjusted EBIT (unaudited):

The following tables reconcile Segment EBIT to Segment EBITA (non-GAAP) as reported and reconcile Segment EBIT and Segment EBITA (non-GAAP) as reported to adjusted Segment EBIT and Segment EBITA (non-GAAP) and adjusted Segment EBIT and Segment EBITA (non-GAAP) margin (unaudited):