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Johnson Controls: Fiscal Q4 Results and FY26 Guidance

Johnson Controls International plc, a leader in smart, healthy, and sustainable buildings, has reported its fiscal fourth quarter 2025 earnings, revealing a solid performance against a backdrop of increasing demand across its core sectors. The company’s net sales for Q4 rose by 3% to $6.4 billion, and organic sales showed an impressive increase of 4%. Full-year sales also grew by 3%, reaching $23.6 billion, with organic sales climbing 6% for the entire year.

CEO Joakim Weidemanis expressed confidence in the company’s trajectory, highlighting significant EPS growth and the company’s robust order backlog, which expanded to a record $15 billion, an increase of 13% year-over-year. This growth reflects Johnson Controls' strength in advanced data center cooling and decarbonization solutions, areas where the company continues to lead with innovative technologies.

Q4 Financial Highlights

• - GAAP EPS: Q4 EPS stood at $0.42, while the adjusted EPS was reported at $1.26.
• - Net Income: The net income from continuing operations attributable to Johnson Controls was $267 million, with adjusted net income hitting $798 million.
• - Operating Leveraging: The operating leverage for the quarter stood firmly at approximately 55%, a testament to the company’s commitment to optimizing operational efficiency.

Geographical Performance:

• - Americas: Sales reached $4.3 billion, growing by 1%, with organic sales rising by 3%. Adjusted EBITA increased by 4% to $862 million.
• - EMEA Region: The region reported a remarkable 13% sales growth year-over-year, reaching $1.3 billion, driven by a 9% increase in organic sales. EBITA also soared by 23%.
• - Asia Pacific (APAC): APAC saw a decline of 3% in sales, totaling $780 million, largely due to lower demand in key markets like China.

Corporate Initiatives and Cash Flow

In addition to its sales growth, Johnson Controls managed to generate significant cash flow, providing $968 million from operations, and achieving an adjusted free cash flow of $710 million. The company remains committed to returning value to shareholders, having entered into accelerated share repurchase agreements totaling $5 billion.

Johnson Controls has also successfully completed the sale of its Residential and Light Commercial HVAC business to Bosch Group for $8.3 billion, further streamlining its operations while simultaneously enhancing its focus on more profitable segments.

Looking Ahead: FY26 Guidance

The company has initiated its guidance for fiscal 2026, predicting organic sales growth in the mid-single digits and an adjusted EPS target of approximately $4.55. The company emphasizes its resilience in managing market fluctuations and maintaining a strong operational focus that prioritizes innovation and sustainability.

Johnson Controls continues its trajectory of growth in a complex and evolving marketplace, demonstrating value creation for shareholders and positioning itself as a leader in the sustainable building sector. As the world shifts towards more environmentally friendly solutions, Johnson Controls stands ready to meet this demand with its comprehensive digital offering, OpenBlue.

For further information, investors can access resources and the current presentation on the Investor Relations section of Johnson Controls’ website.