Johnson Controls Reports Strong Q3 Results; Raises FY25 Guidance
Johnson Controls (NYSE:JCI) reported strong fiscal Q3 2025 results, with sales reaching $6.1 billion, up 3% as reported and 6% organically year-over-year. The company achieved GAAP EPS of $0.94 and adjusted EPS of $1.05.
Key highlights include a record systems and services backlog of $14.6 billion, representing an 11% organic increase year-over-year. Regional performance showed strength across all segments, with EMEA sales up 8%, APAC sales increasing 7%, and Americas maintaining stable performance with strong organic growth of 7%.
The company has raised its full-year fiscal 2025 guidance, now projecting adjusted EPS of $3.65 to $3.68 (up from ~$3.60) and adjusted free cash flow conversion of >100%. Q4 2025 guidance indicates continued growth with expected adjusted EPS of $1.14 to $1.17.
Johnson Controls (NYSE:JCI) ha riportato risultati solidi per il terzo trimestre fiscale 2025, con vendite che hanno raggiunto 6,1 miliardi di dollari, in aumento del 3% su base segnalata e del 6% su base organica rispetto all'anno precedente. L'azienda ha registrato un utile per azione GAAP di 0,94 dollari e un utile per azione rettificato di 1,05 dollari.
I punti salienti includono un record di ordini di sistemi e servizi pari a 14,6 miliardi di dollari, con un incremento organico dell'11% anno su anno. La performance regionale ha mostrato forza in tutti i segmenti, con vendite in aumento dell'8% in EMEA, del 7% in APAC e una performance stabile nelle Americhe, con una crescita organica robusta del 7%.
L'azienda ha rivisto al rialzo le previsioni per l'intero anno fiscale 2025, prevedendo ora un utile per azione rettificato tra 3,65 e 3,68 dollari (in aumento rispetto a circa 3,60 dollari) e una conversione del flusso di cassa libero rettificato superiore al 100%. Le previsioni per il quarto trimestre 2025 indicano una crescita continua con un utile per azione rettificato atteso tra 1,14 e 1,17 dollari.
Johnson Controls (NYSE:JCI) reportó sólidos resultados en el tercer trimestre fiscal de 2025, con ventas que alcanzaron los 6.1 mil millones de dólares, un aumento del 3% reportado y del 6% orgánico año tras año. La compañía logró un EPS GAAP de 0.94 dólares y un EPS ajustado de 1.05 dólares.
Los aspectos más destacados incluyen un récord en la cartera de sistemas y servicios de 14.6 mil millones de dólares, que representa un aumento orgánico del 11% interanual. El desempeño regional mostró fortaleza en todos los segmentos, con ventas en EMEA aumentando un 8%, en APAC un 7%, y en América manteniendo un rendimiento estable con un fuerte crecimiento orgánico del 7%.
La compañía ha elevado su guía para todo el año fiscal 2025, proyectando ahora un EPS ajustado de 3.65 a 3.68 dólares (desde aproximadamente 3.60) y una conversión del flujo de caja libre ajustado superior al 100%. La guía para el cuarto trimestre de 2025 indica un crecimiento continuo con un EPS ajustado esperado de 1.14 a 1.17 dólares.
Johnson Controls (NYSE:JCI)는 2025 회계연도 3분기에 강력한 실적을 보고했으며, 매출은 전년 동기 대비 3% 증가한 61억 달러, 유기적 성장률은 6%를 기록했습니다. 회사는 GAAP 주당순이익(EPS) 0.94달러와 조정 주당순이익 1.05달러를 달성했습니다.
주요 하이라이트로는 전년 대비 11% 유기적 증가한 146억 달러의 시스템 및 서비스 수주 잔고 기록이 포함됩니다. 지역별 실적은 모든 부문에서 강세를 보였으며, EMEA 매출은 8%, APAC 매출은 7% 증가했고, 미주 지역은 안정적인 실적을 유지하며 7%의 강한 유기적 성장을 기록했습니다.
회사는 2025 회계연도 전체 가이던스를 상향 조정하여, 조정 주당순이익을 3.65달러에서 3.68달러로(기존 약 3.60달러에서 상향) 예상하고 조정된 자유현금흐름 전환율은 100% 이상으로 전망했습니다. 2025년 4분기 가이던스는 조정 주당순이익 1.14달러에서 1.17달러로 지속적인 성장을 예상합니다.
Johnson Controls (NYSE:JCI) a publié de solides résultats pour le troisième trimestre fiscal 2025, avec des ventes atteignant 6,1 milliards de dollars, en hausse de 3 % rapporté et de 6 % en organique d'une année sur l'autre. La société a réalisé un BPA GAAP de 0,94 $ et un BPA ajusté de 1,05 $.
Les points forts incluent un carnet de commandes record de systèmes et services de 14,6 milliards de dollars, représentant une augmentation organique de 11 % d'une année sur l'autre. La performance régionale a montré une solidité dans tous les segments, avec des ventes en hausse de 8 % en EMEA, de 7 % en APAC, et une performance stable dans les Amériques avec une forte croissance organique de 7 %.
La société a relevé ses prévisions pour l'ensemble de l'exercice fiscal 2025, prévoyant désormais un BPA ajusté de 3,65 à 3,68 $ (contre environ 3,60 $ auparavant) et une conversion du flux de trésorerie disponible ajusté supérieure à 100 %. Les prévisions pour le quatrième trimestre 2025 indiquent une croissance continue avec un BPA ajusté attendu entre 1,14 et 1,17 $.
Johnson Controls (NYSE:JCI) meldete starke Ergebnisse für das dritte Fiskalquartal 2025, mit einem Umsatz von 6,1 Milliarden US-Dollar, was einem Anstieg von 3 % gemeldet und 6 % organisch im Jahresvergleich entspricht. Das Unternehmen erzielte ein GAAP-Gewinn je Aktie (EPS) von 0,94 US-Dollar und ein bereinigtes EPS von 1,05 US-Dollar.
Zu den wichtigsten Highlights zählt ein Rekord-Auftragsbestand für Systeme und Dienstleistungen von 14,6 Milliarden US-Dollar, was einem organischen Anstieg von 11 % im Jahresvergleich entspricht. Die regionale Leistung zeigte Stärke in allen Segmenten, mit einem Umsatzanstieg von 8 % in EMEA, 7 % in APAC und stabiler Performance in Amerika mit starkem organischem Wachstum von 7 %.
Das Unternehmen hat seine Prognose für das Gesamtjahr 2025 angehoben und erwartet nun ein bereinigtes EPS von 3,65 bis 3,68 US-Dollar (vorher ca. 3,60 US-Dollar) sowie eine bereinigte Free-Cashflow-Konversionsrate von über 100 %. Die Prognose für das vierte Quartal 2025 deutet auf weiteres Wachstum hin, mit einem erwarteten bereinigten EPS von 1,14 bis 1,17 US-Dollar.
- Record systems and services backlog of $14.6 billion, up 11% organically year-over-year
- Q3 organic sales growth of 6% with total sales reaching $6.1 billion
- Raised full-year 2025 EPS guidance to $3.65-$3.68 from ~$3.60
- Strong free cash flow of $693 million with adjusted free cash flow of $725 million
- Margin improvements in EMEA (up 80bp) and APAC (up 70bp) segments
- Americas segment GAAP EBITA margin declined 150 basis points to 18.4%
- APAC orders decreased 8% year-over-year
- Corporate expenses increased 10% on a GAAP basis
Insights
JCI delivered strong Q3 results with 6% organic growth, improved margins, and raised FY25 guidance, demonstrating operational momentum.
Johnson Controls has delivered robust Q3 performance across key metrics, showcasing operational strength in a challenging macro environment. The 6% organic sales growth demonstrates healthy demand for JCI's building solutions, particularly in service businesses which showed strong performance across all regions. Most notably, the company has built significant momentum in its backlog, which reached $14.6 billion - an 11% organic increase year-over-year, providing excellent revenue visibility for future quarters.
The regional performance tells an important story about JCI's execution. While Americas revenue was flat on a reported basis, organic growth reached 7%, indicating strong core business performance offset by strategic divestitures. EMEA showed balanced growth with 8% service revenue expansion driving margin improvements. APAC's performance was particularly impressive with strong double-digit service growth and a 14% backlog increase, suggesting accelerating momentum in the region.
Profitability metrics show disciplined execution, with adjusted segment EBITA margins expanding in all regions except Americas (which held steady at 18.5%). The corporate expense reduction of 22% on an adjusted basis reflects effective cost controls. Free cash flow generation was solid at $693 million, supporting $243 million in dividends and $310 million in share repurchases.
Most significantly, management's decision to raise full-year EPS guidance to $3.65-3.68 (previously ~$3.60) and improve free cash flow conversion guidance to >100% (from ~100%) signals increasing confidence in the business trajectory for the remainder of fiscal 2025. The company's strategic focus on empowering frontline employees and R&D investments appears to be translating into tangible financial results, with significant potential for continued margin expansion.
- Q3 sales increased
3% and organic sales increased6% * - Q3 GAAP EPS of
$0.94 $1.05 - Q3 orders increased
2% organically year-over-year - Systems and Services backlog of
$14.6 billion 11% organically year-over-year - Initiates fiscal Q4 and raises full year fiscal 2025 guidance*
* This news 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.
Sales in the quarter of
"As we celebrate 140 years of innovation and customer commitment, our strong third quarter results and record backlog reflect the momentum we've built and the opportunities ahead," said Joakim Weidemanis, CEO. "By prioritizing our customers, empowering our 40,000 frontline colleagues, and investing in R&D, we are strengthening our capabilities to win – both now and in the future. Looking ahead, we believe implementing the right business system will allow us to accelerate performance, drive consistency, and deliver sustained long-term value for our shareholders."
FISCAL Q3 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 third quarter of fiscal 2024. Orders and backlog metrics included in the release relate to the Company's Systems and Services based businesses.
A slide presentation to accompany the results can be found in the Investor Relations section of Johnson Controls' website at investors.johnsoncontrols.com.
Fiscal Q3 | ||||||
(in millions) | 2025 | 2024 | Change | |||
Sales | $ 4,042 | $ 4,035 | — % | |||
Segment EBITA | ||||||
GAAP | 742 | 804 | (8 %) | |||
Adjusted (non-GAAP) | 746 | 743 | — % | |||
Segment EBITA Margin % | ||||||
GAAP | 18.4 % | 19.9 % | (150 bp) | |||
Adjusted (non-GAAP) | 18.5 % | 18.4 % | 10 bp | |||
Sales in the quarter of
Excluding M&A and adjusted for foreign currency, orders increased
Segment EBITA margin of
EMEA (
Fiscal Q3 | ||||||
(in millions) | 2025 | 2024 | Change | |||
Sales | $ 1,273 | $ 1,177 | 8 % | |||
Segment EBITA | ||||||
GAAP | 177 | 154 | 15 % | |||
Adjusted (non-GAAP) | 179 | 154 | 16 % | |||
Segment EBITA Margin % | ||||||
GAAP | 13.9 % | 13.1 % | 80 bp | |||
Adjusted (non-GAAP) | 14.1 % | 13.1 % | 100 bp | |||
Sales in the quarter of
Excluding M&A and adjusted for foreign currency, orders increased
Segment EBITA margin of
APAC (
Fiscal Q3 | ||||||
(in millions) | 2025 | 2024 | Change | |||
Sales | $ 737 | $ 686 | 7 % | |||
Segment EBITA | ||||||
GAAP | 143 | 128 | 12 % | |||
Adjusted (non-GAAP) | 143 | 128 | 12 % | |||
Segment EBITA Margin % | ||||||
GAAP | 19.4 % | 18.7 % | 70 bp | |||
Adjusted (non-GAAP) | 19.4 % | 18.7 % | 70 bp | |||
Sales in the quarter of
Excluding M&A and adjusted for foreign currency, orders decreased
Segment EBITA margin of
Corporate
Fiscal Q3 | ||||||
(in millions) | 2025 | 2024 | Change | |||
Corporate Expense | ||||||
GAAP | $ 141 | $ 128 | 10 % | |||
Adjusted (non-GAAP) | 93 | 119 | (22 %) | |||
Adjusted Corporate expense in Q3 2025 excludes certain transaction/separation costs and transformation costs. Adjusted Corporate expense in Q3 2024 excludes certain transaction/separation costs.
OTHER Q3 ITEMS
- Cash provided by operating activities was
$787 million $693 million $725 million - The Company paid dividends of
$243 million - The Company repurchased 3.8 million shares of common stock for
$310 million
GUIDANCE
The following forward-looking statements regarding organic sales growth, adjusted segment EBITA margin, adjusted segment EBITA margin improvement, adjusted EPS and adjusted free cash flow conversion are non-GAAP financial measures and are presented on a continuing operations basis excluding the Residential and Light Commercial HVAC business, which was classified as discontinued operations beginning in the fiscal fourth quarter of 2024. 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 2025 fourth quarter and full year GAAP financial results from continuing operations.
The Company initiated fiscal 2025 fourth quarter guidance:
- Organic sales growth of low single digits
- Adjusted segment EBITA margin of ~
18.6% - Adjusted EPS before special items of
$1.14 $1.17
The Company raised fiscal 2025 full year guidance:
- Organic sales growth of mid-single digits (unchanged)
- Adjusted segment EBITA margin improvement of ~90 basis points year-over-year (unchanged)
- Adjusted EPS before special items of
$3.65 $3.68 ~ )$3.60 - Adjusted free cash flow conversion of >
100% (previously ~100% )
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 by dialing 855-979-6654 (in
ABOUT JOHNSON CONTROLS
At Johnson Controls (NYSE:JCI), we transform the environments where people live, work, learn and play. As the global leader in smart, healthy and sustainable buildings, our mission is to reimagine the performance of buildings to serve people, places and the planet.
Building on a proud history of nearly 140 years of innovation, we deliver the blueprint of the future for industries such as healthcare, schools, data centers, airports, stadiums, manufacturing and beyond through OpenBlue, our comprehensive digital offering.
Today, Johnson Controls offers the world`s largest portfolio of building technology and software as well as service solutions from some of the most trusted names in the industry.
Visit johnsoncontrols.com for more information and follow @Johnsoncontrols on social platforms.
JOHNSON CONTROLS CONTACTS:
INVESTOR CONTACTS: | MEDIA CONTACT: |
Jim Lucas | Danielle Canzanella |
Direct: +1 414.340.1752 | Direct: +1 203.499.8297 |
Email: jim.lucas@jci.com | Email: danielle.canzanella@jci.com |
Michael Gates | |
Direct: +1 414.524.5785 | |
Email: michael.j.gates@jci.com |
JOHNSON CONTROLS INTERNATIONAL PLC CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Johnson Controls International plc has made statements in this communication 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 communication, statements regarding Johnson Controls' 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. Johnson Controls cautions that these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond its control, that could cause its actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to: Johnson Controls' 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; the ability of Johnson Controls to manage general economic, business and capital market conditions, including the impacts of trade restrictions, recessions, economic downturns and global price inflation; Johnson Controls' ability to develop or acquire new products and technologies that achieve market acceptance and meet applicable quality and regulatory requirements; the ability of Johnson Controls to execute on its operating model and drive organizational improvement; Johnson Controls' 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; 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 Johnson Controls' customers; the ability to manage disruptions caused by international conflicts, including
FINANCIAL STATEMENTS | |||||||
Johnson Controls International plc Consolidated Statements of Income (in millions, except per share data; unaudited) | |||||||
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Net sales | |||||||
Products and systems | $ 4,122 | $ 4,089 | $ 11,672 | $ 11,576 | |||
Services | 1,930 | 1,809 | 5,482 | 5,128 | |||
6,052 | 5,898 | 17,154 | 16,704 | ||||
Cost of sales | |||||||
Products and systems | 2,656 | 2,698 | 7,635 | 7,805 | |||
Services | 1,150 | 1,091 | 3,278 | 3,090 | |||
3,806 | 3,789 | 10,913 | 10,895 | ||||
Gross profit | 2,246 | 2,109 | 6,241 | 5,809 | |||
Selling, general and administrative expenses | 1,417 | 895 | 4,243 | 4,293 | |||
Restructuring and impairment costs | 51 | 103 | 146 | 377 | |||
Net financing charges | 77 | 70 | 243 | 246 | |||
Equity income (loss) | 4 | (16) | 5 | (19) | |||
Income from continuing operations before income taxes | 705 | 1,025 | 1,614 | 874 | |||
Income tax provision | 87 | 174 | 160 | 1 | |||
Income from continuing operations | 618 | 851 | 1,454 | 873 | |||
Income from discontinued operations, net of tax | 160 | 201 | 301 | 349 | |||
Net income | 778 | 1,052 | 1,755 | 1,222 | |||
Income (loss) attributable to noncontrolling interests | |||||||
Continuing operations | — | (1) | — | 2 | |||
Discontinued operations | 77 | 78 | 157 | 148 | |||
Net income attributable to Johnson Controls | $ 701 | $ 975 | $ 1,598 | $ 1,072 | |||
Income attributable to Johnson Controls | |||||||
Continuing operations | $ 618 | $ 852 | $ 1,454 | $ 871 | |||
Discontinued operations | 83 | 123 | 144 | 201 | |||
Total | $ 701 | $ 975 | $ 1,598 | $ 1,072 | |||
Basic earnings per share attributable to Johnson Controls | |||||||
Continuing operations | $ 0.94 | $ 1.27 | $ 2.21 | $ 1.28 | |||
Discontinued operations | 0.13 | 0.18 | 0.22 | 0.30 | |||
Total | $ 1.07 | $ 1.45 | $ 2.43 | $ 1.58 | |||
Diluted earnings per share attributable to Johnson Controls | |||||||
Continuing operations | $ 0.94 | $ 1.27 | $ 2.20 | $ 1.28 | |||
Discontinued operations | 0.13 | 0.18 | 0.22 | 0.30 | |||
Total | $ 1.07 | $ 1.45 | $ 2.42 | $ 1.58 | |||
Johnson Controls International plc Condensed Consolidated Statements of Financial Position (in millions; unaudited) | |||
June 30, 2025 | September 30, 2024 | ||
Assets | |||
Cash and cash equivalents | $ 731 | $ 606 | |
Accounts receivable - net | 6,151 | 6,051 | |
Inventories | 1,829 | 1,774 | |
Current assets held for sale | 1,993 | 1,595 | |
Other current assets | 1,145 | 1,153 | |
Current assets | 11,849 | 11,179 | |
Property, plant and equipment - net | 2,455 | 2,403 | |
Goodwill | 16,709 | 16,725 | |
Other intangible assets - net | 3,856 | 4,130 | |
Noncurrent assets held for sale | 3,174 | 3,210 | |
Other noncurrent assets | 5,350 | 5,048 | |
Total assets | $ 43,393 | $ 42,695 | |
Liabilities and Equity | |||
Short-term debt | $ 1,277 | $ 953 | |
Current portion of long-term debt | 570 | 536 | |
Accounts payable | 3,421 | 3,389 | |
Accrued compensation and benefits | 1,070 | 1,048 | |
Deferred revenue | 2,428 | 2,160 | |
Current liabilities held for sale | 1,662 | 1,431 | |
Other current liabilities | 1,922 | 2,438 | |
Current liabilities | 12,350 | 11,955 | |
Long-term debt | 8,446 | 8,004 | |
Pension and postretirement benefit obligations | 179 | 217 | |
Noncurrent liabilities held for sale | 398 | 405 | |
Other noncurrent liabilities | 4,975 | 4,753 | |
Long-term liabilities | 13,998 | 13,379 | |
Shareholders' equity attributable to Johnson Controls | 15,830 | 16,098 | |
Noncontrolling interests | 1,215 | 1,263 | |
Total equity | 17,045 | 17,361 | |
Total liabilities and equity | $ 43,393 | $ 42,695 | |
Consolidated Statements of Cash Flows (in millions; unaudited) | |||||||
Three Months | Nine Months | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Operating Activities of Continuing Operations | |||||||
Income from continuing operations attributable to Johnson Controls | $ 618 | $ 852 | $ 871 | ||||
Income (loss) from continuing operations attributable to noncontrolling interests | — | (1) | — | 2 | |||
Income from continuing operations | 618 | 851 | 1,454 | 873 | |||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||
Depreciation and amortization | 190 | 201 | 585 | 624 | |||
Pension and postretirement income and contributions | (15) | (18) | (52) | (49) | |||
Deferred income taxes | (39) | 16 | (146) | (403) | |||
Noncash restructuring and impairment charges | 23 | 80 | 56 | 333 | |||
Equity-based compensation | 48 | 27 | 107 | 81 | |||
Other - net | (24) | (69) | 8 | (106) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable | (172) | 18 | (79) | (491) | |||
Inventories | (52) | (50) | (79) | (185) | |||
Other assets | (76) | (370) | (289) | (560) | |||
Restructuring reserves | 5 | (21) | 2 | (81) | |||
Accounts payable and accrued liabilities | 258 | (23) | 31 | 179 | |||
Accrued income taxes | 23 | 11 | (12) | 1 | |||
Cash provided by operating activities from continuing operations | 787 | 653 | 1,586 | 216 | |||
Investing Activities of Continuing Operations | |||||||
Capital expenditures | (94) | (89) | (304) | (299) | |||
Other - net | 9 | (1) | 2 | 13 | |||
Cash used by investing activities from continuing operations | (85) | (90) | (302) | (286) | |||
Financing Activities of Continuing Operations | |||||||
Net proceeds (payments) from borrowings with maturities less than three months | (75) | (840) | 283 | 703 | |||
Proceeds from debt | — | 859 | 775 | 1,281 | |||
Repayments of debt | — | (275) | (502) | (438) | |||
Stock repurchases and retirements | (310) | (402) | (970) | (876) | |||
Payment of cash dividends | (243) | (249) | (733) | (753) | |||
Proceeds from the exercise of stock options | 4 | 13 | 109 | 33 | |||
Employee equity-based compensation withholding taxes | (2) | (2) | (33) | (26) | |||
Other - net | (11) | (34) | (40) | (114) | |||
Cash used by financing activities from continuing operations | (637) | (930) | (1,111) | (190) | |||
Discontinued Operations | |||||||
Cash provided by operating activities | 208 | 368 | 255 | 356 | |||
Cash used by investing activities | (25) | (9) | (52) | (24) | |||
Cash used by financing activities | (109) | (69) | (174) | (132) | |||
Cash provided by discontinued operations | 74 | 290 | 29 | 200 | |||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (201) | 10 | (216) | 29 | |||
Change in cash, cash equivalents and restricted cash held for sale | — | 1 | 3 | 2 | |||
Decrease in cash, cash equivalents and restricted cash | (62) | (66) | (11) | (29) | |||
Cash, cash equivalents and restricted cash at beginning of period | 818 | 954 | 767 | 917 | |||
Cash, cash equivalents and restricted cash at end of period | 756 | 888 | 756 | 888 | |||
Less: Restricted cash | 25 | 30 | 25 | 30 | |||
Cash and cash equivalents at end of period | $ 731 | $ 858 | $ 731 | $ 858 | |||
FOOTNOTES
1. Sale of Residential and Light Commercial HVAC Business
The Company signed a definitive agreement in July 2024 to sell its Residential and Light Commercial ("R&LC") HVAC business, which includes the North America Ducted businesses and the global Residential joint venture with Hitachi Global Life Solutions, Inc. ("Hitachi"), of which Johnson Controls owns
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 footnotes three through eight 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.
- Effective January 1, 2024, the Company has excluded the impact of discontinuing its accounts receivables factoring programs from adjusted free cash flow and adjusted free cash flow conversion. The Company has also re-baselined the prior year adjusted free cash flow measures to present a more comparative measure without the impact of factoring.
- Cash payments related to the water systems AFFF settlement and cash receipts for AFFF-related insurance recoveries.
Adjusted financial measures
Adjusted financial measures include adjusted segment EBITA, adjusted segment EBITA margin, adjusted net income, adjusted earnings per share, adjusted EBIT, adjusted EBITDA and adjusted corporate expenses. These non-GAAP measures 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 five through eight, 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, net of NCI 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.
- Earn-out adjustments relate to earn-out liabilities associated with certain significant acquisitions and may have a favorable or unfavorable impact on results.
- Cyber incident costs primarily represent expenses, net of insurance recoveries, associated with the response to, and remediation of, a cybersecurity incident which occurred in September 2023.
- Product quality costs are costs related to a product quality issue that is unusual due to the magnitude of the expected cost to remediate in comparison to typical product quality issues experienced by the Company.
- Loss on divestiture relates to the sale of the ADTi business.
- EMEA joint venture loss relates to certain non-recurring losses associated with the equity method accounting of a joint venture company.
- 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, impacts from statutory rate changes, and the recording of significant tax credits.
- 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.
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):
Net sales | Three Months Ended June 30 | Nine Months Ended June 30 | |||||||||||||
(in millions) | EMEA | APAC | Total | EMEA | APAC | Total | |||||||||
Net sales - 2024 | $ 686 | ||||||||||||||
Base year adjustments | |||||||||||||||
Divestitures and other | (243) | (7) | — | (250) | (714) | (12) | — | (726) | |||||||
Foreign currency | (9) | 52 | 12 | 55 | (40) | (2) | (5) | (47) | |||||||
Adjusted base net sales | 3,783 | 1,222 | 698 | 5,703 | 10,587 | 3,426 | 1,918 | 15,931 | |||||||
Acquisitions | — | 6 | — | 6 | — | 18 | — | 18 | |||||||
Organic growth | 259 | 45 | 39 | 343 | 919 | 187 | 99 | 1,205 | |||||||
Net sales - 2025 | $ 737 | ||||||||||||||
Growth %: | |||||||||||||||
Net sales | — % | 8 % | 7 % | 3 % | 1 % | 6 % | 5 % | 3 % | |||||||
Organic growth | 7 % | 4 % | 6 % | 6 % | 9 % | 5 % | 5 % | 8 % | |||||||
Products and systems | Three Months Ended June 30 | Nine Months Ended June 30 | |||||||||||||
(in millions) | EMEA | APAC | Total | EMEA | APAC | Total | |||||||||
Products and systems | $ 710 | $ 492 | |||||||||||||
Base year adjustments | |||||||||||||||
Divestitures and other | (243) | (7) | — | (250) | (714) | (12) | — | (726) | |||||||
Foreign currency | (8) | 42 | 10 | 44 | (30) | 18 | (3) | (15) | |||||||
Adjusted products and | 2,636 | 745 | 502 | 3,883 | 7,370 | 2,092 | 1,373 | 10,835 | |||||||
Acquisitions | — | 4 | — | 4 | — | 13 | — | 13 | |||||||
Organic growth | 211 | 7 | 17 | 235 | 724 | 72 | 28 | 824 | |||||||
Products and systems | $ 756 | $ 519 | |||||||||||||
Growth %: | |||||||||||||||
Products and systems | (1) % | 6 % | 5 % | 1 % | — % | 4 % | 2 % | 1 % | |||||||
Organic growth | 8 % | 1 % | 3 % | 6 % | 10 % | 3 % | 2 % | 8 % | |||||||
Service revenue | Three Months Ended June 30 | Nine Months Ended June 30 | |||||||||||||
(in millions) | EMEA | APAC | Total | EMEA | APAC | Total | |||||||||
Service revenue - 2024 | $ 467 | $ 194 | $ 547 | ||||||||||||
Base year adjustments | |||||||||||||||
Foreign currency | (1) | 10 | 2 | 11 | (10) | (20) | (2) | (32) | |||||||
Adjusted base service revenue | 1,147 | 477 | 196 | 1,820 | 3,217 | 1,334 | 545 | 5,096 | |||||||
Acquisitions | — | 2 | — | 2 | — | 5 | — | 5 | |||||||
Organic growth | 48 | 38 | 22 | 108 | 195 | 115 | 71 | 381 | |||||||
Service revenue - 2025 | $ 517 | $ 218 | $ 616 | ||||||||||||
Growth %: | |||||||||||||||
Service revenue | 4 % | 11 % | 12 % | 7 % | 6 % | 7 % | 13 % | 7 % | |||||||
Organic growth | 4 % | 8 % | 11 % | 6 % | 6 % | 9 % | 13 % | 7 % | |||||||
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):
Three Months | Nine Months | ||||||
(in millions) | 2025 | 2024 | 2025 | 2024 | |||
Cash provided by operating activities from continuing operations | $ 787 | $ 653 | $ 1,586 | $ 216 | |||
Income from continuing operations attributable to Johnson Controls | 618 | 852 | 1,454 | 871 | |||
Operating cash flow conversion | 127 % | 77 % | 109 % | 25 % | |||
Cash provided by operating activities from continuing operations | 787 | 653 | 1,586 | 216 | |||
Capital expenditures | (94) | (89) | (304) | (299) | |||
Free cash flow (non-GAAP) | $ 693 | $ 564 | $ 1,282 | $ (83) | |||
Income from continuing operations attributable to Johnson Controls | 618 | 852 | 1,454 | 871 | |||
Free cash flow conversion from net income (non-GAAP) | 112 % | 66 % | 88 % | * | |||
* Measure not meaningful | |||||||
The following table includes adjusted free cash flow and adjusted free cash flow conversion (unaudited):
Three Months Ended | Nine Months Ended | ||||||
(in millions) | 2025 | 2024 | 2025 | 2024 | |||
Free cash flow (non-GAAP) | $ 693 | $ 564 | $ 1,282 | $ (83) | |||
Adjustments: | |||||||
JC Capital cash used by operating activities | 34 | 50 | 111 | 170 | |||
Water systems AFFF settlement cash payments and insurance | (3) | 243 | 383 | 243 | |||
Impact from discontinuation of factoring programs | 1 | — | 15 | — | |||
Adjusted free cash flow (non-GAAP) | 725 | 857 | 1,791 | 330 | |||
Prior year impact from factoring programs | — | 48 | — | 582 | |||
Re-baselined adjusted free cash flow (non-GAAP) | $ 725 | $ 905 | $ 1,791 | $ 912 | |||
Adjusted net income attributable to JCI (non-GAAP) | $ 693 | $ 639 | $ 1,664 | $ 1,425 | |||
JC Capital net income | (8) | (3) | (4) | (8) | |||
Adjusted net income attributable to JCI, excluding JC Capital | $ 685 | $ 636 | $ 1,660 | $ 1,417 | |||
Adjusted free cash flow conversion (non-GAAP) | 106 % | 142 % | 108 % | 64 % | |||
5. EBITA, EBIT and Corporate Expense
The Company evaluates the performance of its business units primarily on segment EBITA. The following table includes continuing operations (unaudited):
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
Actual | Adjusted (Non-GAAP) | Actual | Adjusted (Non-GAAP) | ||||||||||||
(in millions) | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||
Segment EBITA | |||||||||||||||
$ 742 | $ 804 | $ 746 | $ 743 | ||||||||||||
EMEA | 177 | 154 | 179 | 154 | 448 | 397 | 450 | 401 | |||||||
APAC | 143 | 128 | 143 | 128 | 337 | 320 | 337 | 323 | |||||||
EBIT (non-GAAP) | |||||||||||||||
Income from continuing operations: | |||||||||||||||
Attributable to Johnson Controls | $ 618 | $ 852 | $ 693 | $ 639 | $ 871 | ||||||||||
Attributable to noncontrolling interests | — | (1) | — | (1) | — | 2 | — | 2 | |||||||
Income from continuing operations | 618 | 851 | 693 | 638 | 1,454 | 873 | 1,664 | 1,427 | |||||||
Less: Income tax provision (1) | 87 | 174 | 95 | 82 | 160 | 1 | 227 | 187 | |||||||
Income before income taxes | 705 | 1,025 | 788 | 720 | 1,614 | 874 | 1,891 | 1,614 | |||||||
Net financing charges | 77 | 70 | 77 | 70 | 243 | 246 | 243 | 246 | |||||||
EBIT (non-GAAP) | $ 782 | $ 865 | $ 790 | ||||||||||||
(1) Adjusted income tax provision excludes the related tax impacts of pre-tax adjusting items. | |||||||||||||||
The following tables include the reconciliations of segment EBITA as reported to adjusted segment EBITA and adjusted segment EBITA margin (unaudited):
Three Months Ended June 30, | |||||||||||
(in millions) | EMEA | APAC | |||||||||
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | ||||||
Sales | $ 737 | ||||||||||
Segment EBITA | $ 742 | $ 804 | $ 177 | $ 154 | $ 143 | ||||||
Adjusting items: | |||||||||||
Transformation costs | 4 | — | 2 | — | — | — | |||||
Earn-out adjustments | — | (61) | — | — | — | — | |||||
Adjusted segment EBITA (non-GAAP) | $ 746 | $ 743 | $ 179 | $ 154 | $ 143 | ||||||
Segment EBITA Margin % | 18.4 % | 19.9 % | 13.9 % | 13.1 % | 19.4 % | 18.7 % | |||||
Adjusted segment EBITA Margin % (non-GAAP) | 18.5 % | 18.4 % | 14.1 % | 13.1 % | 19.4 % | 18.7 % | |||||
Nine Months Ended June 30, | |||||||||||
(in millions) | EMEA | APAC | |||||||||
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | ||||||
Sales | |||||||||||
Segment EBITA | $ 448 | $ 397 | $ 337 | $ 320 | |||||||
Adjusting items: | |||||||||||
Transformation costs | 6 | — | 2 | — | — | — | |||||
Earn-out adjustments | — | (68) | — | — | — | — | |||||
Product quality costs | — | 26 | — | 4 | — | 3 | |||||
Adjusted segment EBITA (non-GAAP) | $ 450 | $ 401 | $ 337 | $ 323 | |||||||
Segment EBITA Margin % | 17.7 % | 16.3 % | 12.3 % | 11.5 % | 16.7 % | 16.6 % | |||||
Adjusted segment EBITA Margin % (non-GAAP) | 17.8 % | 16.0 % | 12.4 % | 11.7 % | 16.7 % | 16.8 % | |||||
Year Ended September 30, 2024 | |||||
(in millions) | EMEA | APAC | |||
Sales | $ 15,606 | $ 4,620 | $ 2,726 | ||
Segment EBITA | $ 2,679 | $ 561 | $ 478 | ||
Adjusting items: | |||||
Earn-out adjustments | (68) | — | — | ||
Product quality costs | 26 | 4 | 3 | ||
EMEA joint venture loss | — | 17 | — | ||
Adjusted segment EBITA (non-GAAP) | $ 2,637 | $ 582 | $ 481 | ||
Segment EBITA Margin % | 17.2 % | 12.1 % | 17.5 % | ||
Adjusted segment EBITA Margin % (non-GAAP) | 16.9 % | 12.6 % | 17.6 % | ||
The following table reconciles Corporate expense from continuing operations as reported to the comparable adjusted amounts (unaudited):
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||
(in millions) | 2025 | 2024 | 2025 | 2024 | |||
Corporate expense (GAAP) | $ 141 | $ 128 | $ 498 | $ 359 | |||
Adjusting items: | |||||||
Transaction/separation costs | (9) | (9) | (27) | (14) | |||
Transformation costs | (39) | — | (116) | — | |||
Cyber incident costs | — | — | — | (27) | |||
Adjusted corporate expense (non-GAAP) | $ 93 | $ 119 | $ 355 | $ 318 | |||
6. Net Income and Diluted Earnings Per Share
The following tables reconcile income from continuing operations attributable to JCI and diluted earnings per share from continuing operations as reported to the comparable adjusted amounts (unaudited):
Three Months Ended June 30, | |||||||
Income from continuing | Diluted earnings per share | ||||||
(in millions, except per share) | 2025 | 2024 | 2025 | 2024 | |||
As reported (GAAP) | $ 618 | $ 852 | $ 0.94 | $ 1.27 | |||
Adjusting items: | |||||||
Net mark-to-market adjustments | (21) | (5) | (0.03) | (0.01) | |||
Earn-out adjustments | — | (61) | — | (0.09) | |||
Restructuring and impairment costs, net of NCI | 51 | 103 | 0.08 | 0.15 | |||
Water systems AFFF insurance recoveries | (1) | (351) | — | (0.52) | |||
Transaction/separation costs | 9 | 9 | 0.01 | 0.01 | |||
Transformation costs | 45 | — | 0.07 | — | |||
Related tax impact | (8) | 92 | (0.01) | 0.14 | |||
Adjusted (non-GAAP)* | $ 693 | $ 639 | $ 1.05 | $ 0.95 | |||
* May not sum due to rounding | |||||||
Nine Months Ended June 30, | |||||||
Income from continuing | Diluted earnings per share | ||||||
(in millions, except per share) | 2025 | 2024 | 2025 | 2024 | |||
As reported (GAAP) | $ 1,454 | $ 871 | $ 2.20 | $ 1.28 | |||
Adjusting items: | |||||||
Net mark-to-market adjustments | (7) | (42) | (0.01) | (0.06) | |||
Earn-out adjustments | — | (68) | — | (0.10) | |||
Restructuring and impairment costs, net of NCI | 146 | 377 | 0.22 | 0.56 | |||
Water systems AFFF settlement | — | 750 | — | 1.11 | |||
Water systems AFFF insurance recoveries | (13) | (351) | (0.02) | (0.52) | |||
Product quality costs | — | 33 | — | 0.05 | |||
Transaction/separation costs | 27 | 14 | 0.04 | 0.02 | |||
Transformation costs | 124 | — | 0.19 | — | |||
Cyber incident costs | — | 27 | — | 0.04 | |||
Discrete tax items | (36) | (57) | (0.05) | (0.08) | |||
Related tax impact | (31) | (129) | (0.05) | (0.19) | |||
Adjusted (non-GAAP)* | $ 1,664 | $ 1,425 | $ 2.52 | $ 2.10 | |||
* May not sum due to rounding | |||||||
The following table reconciles the denominators used to calculate basic and diluted earnings per share (in millions; unaudited):
Three Months Ended | Nine Months Ended | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Weighted average shares outstanding | |||||||
Basic weighted average shares outstanding | 655.4 | 670.3 | $ 658.9 | $ 676.7 | |||
Effect of dilutive securities: | |||||||
Stock options, unvested restricted stock and | 2.0 | 2.5 | 2.2 | 1.9 | |||
Diluted weighted average shares outstanding | 657.4 | 672.8 | 661.1 | 678.6 | |||
7. Debt Ratios
The following table includes continuing operations and details net debt to income before income taxes and net debt to adjusted EBITDA (unaudited):
(in millions) | June 30, 2025 | March 31, 2025 | June 30, 2024 | ||
Short-term debt | $ 1,277 | $ 1,261 | $ 1,523 | ||
Current portion of long-term debt | 570 | 558 | 998 | ||
Long-term debt | 8,446 | 8,167 | 7,867 | ||
Total debt | 10,293 | 9,986 | 10,388 | ||
Less: cash and cash equivalents | $ 731 | 795 | 858 | ||
Net debt | $ 9,562 | $ 9,191 | $ 9,530 | ||
Last twelve months income before income taxes | $ 2,262 | $ 2,582 | $ 1,270 | ||
Net debt to income before income taxes | 4.2x | 3.6x | 7.5x | ||
Last twelve months adjusted EBITDA (non-GAAP) | $ 3,843 | $ 3,779 | $ 3,496 | ||
Net debt to adjusted EBITDA (non-GAAP) | 2.5x | 2.4x | 2.7x |
The following table reconciles income from continuing operations to adjusted EBIT and adjusted EBITDA (unaudited):
Twelve Months Ended | |||||
(in millions) | June 30, 2025 | March 31, 2025 | June 30, 2024 | ||
Income from continuing operations | $ 1,992 | $ 2,225 | $ 1,361 | ||
Income tax provision (benefit) | 270 | 357 | (91) | ||
Income before income taxes | 2,262 | 2,582 | 1,270 | ||
Net financing charges | 339 | 332 | 302 | ||
EBIT | 2,601 | 2,914 | 1,572 | ||
Adjusting items: | |||||
Net mark-to-market adjustments | (12) | 4 | 69 | ||
Restructuring and impairment costs | 279 | 330 | 588 | ||
Water systems AFFF settlement | — | — | 750 | ||
Water systems AFFF insurance recoveries | (29) | (379) | (351) | ||
Earn-out adjustments | — | (61) | (68) | ||
Transaction/separation costs | 44 | 45 | 35 | ||
Transformation costs | 124 | 79 | — | ||
Cyber incident costs | — | — | 27 | ||
Product quality costs | — | — | 33 | ||
Loss on divestiture | 42 | 42 | — | ||
EMEA joint venture loss | 17 | 17 | — | ||
Adjusted EBIT (non-GAAP) | 3,066 | 2,991 | 2,655 | ||
Depreciation and amortization | 777 | 788 | 841 | ||
Adjusted EBITDA (non-GAAP) | $ 3,843 | $ 3,779 | $ 3,496 | ||
8. Income Taxes
The Company's effective tax rate before consideration of certain excluded items was approximately
View original content to download multimedia:https://www.prnewswire.com/news-releases/johnson-controls-reports-strong-q3-results-raises-fy25-guidance-302515480.html
SOURCE Johnson Controls International plc
FAQ
What were Johnson Controls' (JCI) Q3 2025 earnings per share?
How much did Johnson Controls' (JCI) sales grow in Q3 2025?
What is Johnson Controls' (JCI) new EPS guidance for fiscal 2025?
What was Johnson Controls' (JCI) backlog in Q3 2025?
How much cash did Johnson Controls (JCI) return to shareholders in Q3 2025?
