Johnson Controls Q4 FY2026 sales rise 10% to $7.1B
Q4 orders increased 44% organically year over year, while backlog reached $23.0 billion, up 43% organically.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Johnson Controls International plc (JCI) reported fiscal Q4 2026 net sales of $7.1 billion, up 10% year over year, with organic sales growth of 12%. GAAP net income from continuing operations attributable to JCI was $967 million, versus $267 million in Q4 FY2025; diluted GAAP EPS was $1.60 versus $0.42, and adjusted EPS was $1.66 versus $1.26. Cash provided by operating activities from continuing operations was $1.3 billion, and adjusted free cash flow was $1.096 billion versus $710 million.
For FY2026, net sales were $25.666 billion, up 9%, and income from continuing operations attributable to JCI was $2.880 billion versus $1.721 billion; diluted GAAP EPS was $4.72 versus $2.63. Q4 sales rose 14% in Americas and 12% in APAC, while EMEA sales declined 2%. JCI initiated FY2027 guidance of 11% to 12% organic sales growth, 30%+ operating leverage, adjusted EPS of $6.15 to $6.30, and adjusted free cash flow conversion of ~95%. Its Q1 FY2027 guidance is 12% to 14% organic sales growth, 30% to 35% operating leverage, and adjusted EPS of $1.15 to $1.20.
2 points · 0 major0 major · 0 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointQ4 net sales increased 10% to $7.1 billion.
- Moderate pointQ4 continuing-operations net income attributable to JCI was $967 million, versus $267 million.
Negative
- None.
Filing Explained
The release adds a current leverage snapshot: at September 30, 2026, JCI reported
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Q4 net sales: $7.1 billion; up 10%
Q4 organic sales growth: 12%
Q4 GAAP net income from continuing operations attributable to JCI: $967 million, versus $267 million
+5 more
8 metrics
Q4 net sales
$7.1 billion; up 10%
Fiscal Q4 2026, year over year
Q4 organic sales growth
12%
Fiscal Q4 2026
Q4 GAAP net income from continuing operations attributable to JCI
$967 million, versus $267 million
Fiscal Q4 2026 versus Q4 FY2025
Q4 diluted GAAP EPS
$1.60, versus $0.42
Continuing operations; Q4 FY2026 versus Q4 FY2025
Q4 adjusted EPS
$1.66, versus $1.26
Q4 FY2026 versus Q4 FY2025
FY2026 net sales
$25.666 billion; up 9%
Fiscal year ended September 30, 2026
Backlog
$23.0 billion; increased 43% organically
Year over year
FY2027 adjusted EPS guidance
$6.15 to $6.30
Full-year continuing-operations guidance
Key Terms
Organic sales growth, Operating leverage, Adjusted free cash flow conversion, Net debt to adjusted EBITDA
4 terms
Organic sales growth financial
"Organic sales growth excludes the effect of acquisitions, divestitures and foreign currency"
Organic sales growth measures how much a company’s revenue rises from its regular business activity — like selling more products, charging higher prices, or selling to more customers — without counting money from buying other businesses or one-time currency effects. Investors watch it because it shows whether demand and the company’s core operations are genuinely getting stronger, similar to judging a garden by how much the plants you planted yourself are growing rather than by adding bought potted plants.
Operating leverage financial
"Operating leverage is defined as the change in adjusted EBIT for the period"
Operating leverage measures how much a company's profits are affected by changes in sales volume. When a business has high operating leverage, small increases in sales can lead to much larger increases in profit, much like a lever amplifies force. It matters to investors because it indicates how sensitive a company's earnings are to fluctuations in sales, affecting risk and potential returns.
Adjusted free cash flow conversion financial
"Adjusted free cash flow conversion of ~95%"
Adjusted free cash flow conversion measures how effectively a company turns its reported profit into available cash after accounting for necessary expenses and adjustments. It shows the percentage of profit that becomes actual cash the company can use for growth, debt repayment, or returning value to shareholders. This metric helps investors understand the quality and sustainability of a company's earnings.
Net debt to adjusted EBITDA financial
"net debt to adjusted EBITDA (non-GAAP)"
Net debt to adjusted EBITDA is a leverage ratio that compares a company’s net debt (total interest-bearing debt minus cash) to its recurring operating earnings after removing one-off items. Think of it like how many years of steady take-home pay the business would need to pay off its outstanding debt; investors use it to gauge debt burden, financial risk and relative creditworthiness, with lower ratios generally indicating a safer balance sheet.
Earnings Snapshot
Q4 net sales: $7.1 billion · Guidance included
Q4 and FY2026 ended September 30, 2026
Q4 net sales
$7.1 billion
Up 10% year over year
Q4 diluted GAAP EPS
$1.60
Versus $0.42 in Q4 FY2025
Q4 adjusted EPS
$1.66
Versus $1.26 in Q4 FY2025
FY2026 net sales
$25.666 billion
Up 9% year over year
FY2026 diluted GAAP EPS from continuing operations
$4.72
Versus $2.63 in FY2025
Guidance
Initiated FY2027 Q1 continuing-operations guidance: organic sales growth of 12% to 14%, operating leverage of 30% to 35%, and adjusted EPS of $1.15 to $1.20. Initiated FY2027 full-year continuing-operations guidance: organic sales growth of 11% to 12%, operating leverage of 30%+, adjusted EPS of $6.15 to $6.30, and adjusted free cash flow conversion of ~95%.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were JCI's Q4 FY2026 sales and earnings?
JCI reported fiscal Q4 2026 sales of $7.1 billion, up 10%, and organic sales growth of 12%. GAAP net income from continuing operations attributable to JCI was $967 million; diluted GAAP EPS was $1.60 and adjusted EPS was $1.66.
What is JCI's fiscal 2027 guidance?
JCI initiated FY2027 guidance for organic sales growth of 11% to 12%, operating leverage of 30%+, adjusted EPS of $6.15 to $6.30, and adjusted free cash flow conversion of ~95%. Q1 FY2027 guidance is 12% to 14% organic sales growth, 30% to 35% operating leverage, and adjusted EPS of $1.15 to $1.20.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of Earliest Event Reported): | ||||||||
(Exact name of registrant as specified in its charter)
| (State or Other Jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||||||||||||
(Address of principal executive offices and postal code)
| Not Applicable | ||||||||
| (Registrant’s telephone number) | (Former name, former address and former fiscal year, if changed since last report) | |||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||
| | | |||||||
| | | |||||||
| | | |||||||
| | | |||||||
| | | |||||||
| | | |||||||
| | | |||||||
| | | |||||||
| Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | ||||||||
| Emerging growth company | ||||||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | |||||||
Item 2.02. Results of Operations and Financial Condition.
On October 27, 2026, Johnson Controls International plc (the "Company") issued a press release containing information about the Company’s results of operations for the three months and fiscal year ended September 30, 2026. A copy of this press release is furnished as Exhibit 99.1 and incorporated by reference in this Item 2.02.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
| Exhibit No. | Description | ||||
| 99.1 | Press release issued by Johnson Controls International plc, dated October 27, 2026, relating to the Company’s results of operations. | ||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| JOHNSON CONTROLS INTERNATIONAL PLC | ||||||||||||||
| Date: October 27, 2026 | By: | /s/ Daniel C. McConeghy | ||||||||||||
| Name: | Daniel C. McConeghy | |||||||||||||
| Title: | Vice President and Chief Accounting and Tax Officer | |||||||||||||
 |  | ||||
Exhibit 99.1
FOR IMMEDIATE RELEASE
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 — October 27, 2026 — 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.
1
| | ||||
Americas
| Fiscal Q4 | ||||||||||||||||||||
| (in millions) | 2026 | 2025 | Change | |||||||||||||||||
| Sales | $ | 4,930 | $ | 4,325 | 14 | % | ||||||||||||||
| Segment EBIT | 992 | 763 | 30 | % | ||||||||||||||||
| Segment EBIT Margin % | 20.1 | % | 17.6 | % | 250 | bp | ||||||||||||||
| Segment EBITA (non-GAAP) | 1,069 | 844 | 27 | % | ||||||||||||||||
| Adjusted Segment EBITA (non-GAAP) | 1,086 | 862 | 26 | % | ||||||||||||||||
| Adjusted Segment EBITA Margin % (non-GAAP) | 22.0 | % | 19.9 | % | 210 | bp | ||||||||||||||
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)
| Fiscal Q4 | ||||||||||||||||||||
(in millions) | 2026 | 2025 | Change | |||||||||||||||||
| Sales | $ | 1,312 | $ | 1,337 | (2 | %) | ||||||||||||||
| Segment EBIT | 198 | 188 | 5 | % | ||||||||||||||||
| Segment EBIT Margin % | 15.1 | % | 14.1 | % | 100 | bps | ||||||||||||||
| Segment EBITA (non-GAAP) | 205 | 201 | 2 | % | ||||||||||||||||
| Adjusted Segment EBITA (non-GAAP) | 215 | 208 | 3 | % | ||||||||||||||||
| Adjusted Segment EBITA Margin % (non-GAAP) | 16.4 | % | 15.6 | % | 80 | bps | ||||||||||||||
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
2
| | ||||
offset by the impact of business divestitures. Adjusted Segment EBITA in both Q4 2026 and Q4 2025 excludes transformation costs.
APAC (Asia Pacific)
| Fiscal Q4 | ||||||||||||||||||||
| (in millions) | 2026 | 2025 | Change | |||||||||||||||||
| Sales | $ | 871 | $ | 780 | 12 | % | ||||||||||||||
| Segment EBIT | 162 | 136 | 19 | % | ||||||||||||||||
| Segment EBIT Margin % | 18.6 | % | 17.4 | % | 120 | bp | ||||||||||||||
| Segment EBITA (non-GAAP) | 165 | 139 | 19 | % | ||||||||||||||||
| Adjusted Segment EBITA (non-GAAP) | 165 | 139 | 19 | % | ||||||||||||||||
| Adjusted Segment EBITA Margin % (non-GAAP) | 18.9 | % | 17.8 | % | 110 | bp | ||||||||||||||
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
| Fiscal Q4 | ||||||||||||||||||||
| (in millions) | 2026 | 2025 | Change | |||||||||||||||||
| Corporate Expense | ||||||||||||||||||||
| GAAP | $ | 178 | $ | 269 | (34 | %) | ||||||||||||||
| Adjusted (non-GAAP) | 80 | 124 | (35 | %) | ||||||||||||||||
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.
3
| | ||||
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 www.johnsoncontrols.com for more information and follow @Johnson Controls on social platforms.
4
| | ||||
JOHNSON CONTROLS CONTACTS:
| INVESTOR CONTACTS: | MEDIA CONTACT: | ||||
| Eric Swanson | Danielle Canzanella | ||||
Email: eric.swanson@jci.com | Email: danielle.canzanella@jci.com | ||||
Michael Gates | |||||
Email: michael.j.gates@jci.com | |||||
###
5
| | ||||
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.
###
6
FINANCIAL STATEMENTS
Johnson Controls International plc
Consolidated Statements of Income
(in millions, except per share data; unaudited)
| Three Months Ended September 30, | Twelve Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net sales | |||||||||||||||||||||||
| Products and systems | $ | 5,014 | $ | 4,452 | $ | 17,701 | $ | 16,124 | |||||||||||||||
| Services | 2,099 | 1,990 | 7,965 | 7,472 | |||||||||||||||||||
| 7,113 | 6,442 | 25,666 | 23,596 | ||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Products and systems | 3,249 | 2,908 | 11,697 | 10,543 | |||||||||||||||||||
| Services | 1,159 | 1,183 | 4,454 | 4,461 | |||||||||||||||||||
| 4,408 | 4,091 | 16,151 | 15,004 | ||||||||||||||||||||
| Gross profit | 2,705 | 2,351 | 9,515 | 8,592 | |||||||||||||||||||
| Selling, general and administrative expenses | 1,481 | 1,521 | 5,510 | 5,764 | |||||||||||||||||||
| Restructuring and impairment costs | 87 | 400 | 311 | 546 | |||||||||||||||||||
| Net financing charges | 82 | 76 | 279 | 319 | |||||||||||||||||||
| Equity income | 8 | 1 | 11 | 6 | |||||||||||||||||||
| Income from continuing operations before income taxes | 1,063 | 355 | 3,426 | 1,969 | |||||||||||||||||||
| Income tax provision | 93 | 85 | 536 | 245 | |||||||||||||||||||
| Income from continuing operations | 970 | 270 | 2,890 | 1,724 | |||||||||||||||||||
| Income (loss) from discontinued operations, net of tax | — | 1,488 | (27) | 1,789 | |||||||||||||||||||
| Net income | 970 | 1,758 | 2,863 | 3,513 | |||||||||||||||||||
| Income attributable to noncontrolling interests | |||||||||||||||||||||||
| Continuing operations | 3 | 3 | 10 | 3 | |||||||||||||||||||
| Discontinued operations | — | 62 | — | 219 | |||||||||||||||||||
| Net income attributable to Johnson Controls | $ | 967 | $ | 1,693 | $ | 2,853 | $ | 3,291 | |||||||||||||||
| Income (loss) attributable to Johnson Controls | |||||||||||||||||||||||
| Continuing operations | $ | 967 | $ | 267 | $ | 2,880 | $ | 1,721 | |||||||||||||||
| Discontinued operations | — | 1,426 | (27) | 1,570 | |||||||||||||||||||
| Total | $ | 967 | $ | 1,693 | $ | 2,853 | $ | 3,291 | |||||||||||||||
| Basic earnings (loss) per share attributable to Johnson Controls | |||||||||||||||||||||||
| Continuing operations | $ | 1.60 | $ | 0.42 | $ | 4.73 | $ | 2.64 | |||||||||||||||
| Discontinued operations | — | 2.26 | (0.04) | 2.40 | |||||||||||||||||||
| Total | $ | 1.60 | $ | 2.68 | $ | 4.69 | $ | 5.04 | |||||||||||||||
| Diluted earnings (loss) per share attributable to Johnson Controls | |||||||||||||||||||||||
| Continuing operations | $ | 1.60 | $ | 0.42 | $ | 4.72 | $ | 2.63 | |||||||||||||||
| Discontinued operations | — | 2.25 | (0.04) | 2.40 | |||||||||||||||||||
| Total | $ | 1.60 | $ | 2.67 | $ | 4.68 | $ | 5.03 | |||||||||||||||
7
Johnson Controls International plc
Condensed Consolidated Statements of Financial Position
(in millions; unaudited)
| September 30, 2026 | September 30, 2025 | ||||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | 618 | $ | 379 | |||||||
| Accounts receivable - net | 7,316 | 6,269 | |||||||||
| Inventories | 1,999 | 1,820 | |||||||||
| Current assets held for sale | 4 | 14 | |||||||||
| Other current assets | 1,741 | 1,680 | |||||||||
| Current assets | 11,678 | 10,162 | |||||||||
| Property, plant and equipment - net | 2,106 | 2,193 | |||||||||
| Goodwill | 16,640 | 16,633 | |||||||||
| Other intangible assets - net | 3,482 | 3,613 | |||||||||
| Noncurrent assets held for sale | 231 | 140 | |||||||||
| Other noncurrent assets | 6,065 | 5,198 | |||||||||
| Total assets | $ | 40,202 | $ | 37,939 | |||||||
| Liabilities and Equity | |||||||||||
| Short-term debt | $ | 678 | $ | 723 | |||||||
| Current portion of long-term debt | 1,066 | 566 | |||||||||
| Accounts payable | 4,381 | 3,614 | |||||||||
| Accrued compensation and benefits | 1,198 | 1,268 | |||||||||
| Deferred revenue | 3,370 | 2,470 | |||||||||
| Current liabilities held for sale | 6 | 12 | |||||||||
| Other current liabilities | 2,220 | 2,288 | |||||||||
| Current liabilities | 12,919 | 10,941 | |||||||||
| Long-term debt | 7,533 | 8,591 | |||||||||
| Pension and postretirement benefits | 204 | 211 | |||||||||
| Noncurrent liabilities held for sale | 34 | 9 | |||||||||
| Other noncurrent liabilities | 5,866 | 5,233 | |||||||||
| Noncurrent liabilities | 13,637 | 14,044 | |||||||||
| Shareholders’ equity attributable to Johnson Controls | 13,611 | 12,927 | |||||||||
| Noncontrolling interests | 35 | 27 | |||||||||
| Total equity | 13,646 | 12,954 | |||||||||
| Total liabilities and equity | $ | 40,202 | $ | 37,939 | |||||||
8
Johnson Controls International plc
Consolidated Statements of Cash Flows
(in millions; unaudited)
| Three Months Ended September 30, | Twelve Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Operating Activities of Continuing Operations | |||||||||||||||||||||||
| Income from continuing operations: | |||||||||||||||||||||||
| Attributable to Johnson Controls | $ | 967 | $ | 267 | $ | 2,880 | $ | 1,721 | |||||||||||||||
| Attributable to noncontrolling interests | 3 | 3 | 10 | 3 | |||||||||||||||||||
| Total | 970 | 270 | 2,890 | 1,724 | |||||||||||||||||||
| Adjustments to reconcile net income to cash provided by operating activities of continuing operations: | |||||||||||||||||||||||
| Depreciation and amortization | 159 | 280 | 654 | 865 | |||||||||||||||||||
| Pension and postretirement benefits | (76) | 11 | (115) | (41) | |||||||||||||||||||
| Deferred income taxes | (740) | 341 | (798) | 195 | |||||||||||||||||||
| Non-cash restructuring and impairment charges | 35 | 371 | 195 | 427 | |||||||||||||||||||
| Equity-based compensation | 29 | 33 | 124 | 140 | |||||||||||||||||||
| Other - net | (3) | (36) | (87) | (28) | |||||||||||||||||||
| Changes in assets and liabilities: | |||||||||||||||||||||||
| Accounts receivable | (339) | (132) | (1,096) | (211) | |||||||||||||||||||
| Inventories | (44) | 4 | (210) | (75) | |||||||||||||||||||
| Other assets | (140) | (292) | (78) | (581) | |||||||||||||||||||
| Restructuring reserves | 24 | (1) | (1) | 1 | |||||||||||||||||||
| Accounts payable and accrued liabilities | 951 | 663 | 1,715 | 694 | |||||||||||||||||||
| Accrued income taxes | 474 | (544) | 679 | (556) | |||||||||||||||||||
| Cash provided by operating activities from continuing operations | 1,300 | 968 | 3,872 | 2,554 | |||||||||||||||||||
| Investing Activities of Continuing Operations | |||||||||||||||||||||||
| Capital expenditures | (222) | (130) | (465) | (434) | |||||||||||||||||||
| Acquisition of businesses, net of cash acquired | — | (1) | (291) | (10) | |||||||||||||||||||
| Divestitures of businesses, net of cash divested | — | 3 | 331 | 5 | |||||||||||||||||||
| Other - net | (11) | 18 | (43) | 27 | |||||||||||||||||||
| Cash used by investing activities from continuing operations | (233) | (110) | (468) | (412) | |||||||||||||||||||
| Financing Activities of Continuing Operations | |||||||||||||||||||||||
| Net proceeds from (repayments of) borrowings with maturities less than three months | 24 | (245) | (170) | 38 | |||||||||||||||||||
| Proceeds from debt | — | 396 | 545 | 1,765 | |||||||||||||||||||
| Repayments of debt | (220) | (552) | (859) | (1,648) | |||||||||||||||||||
| Stock repurchases and retirements | (655) | (5,021) | (1,505) | (5,991) | |||||||||||||||||||
| Payment of cash dividends | (242) | (243) | (976) | (976) | |||||||||||||||||||
| Other - net | (9) | (8) | (83) | 28 | |||||||||||||||||||
| Cash used by financing activities from continuing operations | (1,102) | (5,673) | (3,048) | (6,784) | |||||||||||||||||||
| Discontinued Operations | |||||||||||||||||||||||
| Cash used by operating activities | — | (1,410) | (98) | (1,155) | |||||||||||||||||||
| Cash provided (used) by investing activities | — | 6,598 | (155) | 6,546 | |||||||||||||||||||
| Cash used by financing activities | — | (430) | — | (604) | |||||||||||||||||||
| Cash provided (used) by discontinued operations | — | 4,758 | (253) | 4,787 | |||||||||||||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 7 | (43) | 129 | (259) | |||||||||||||||||||
| Change in cash, cash equivalents and restricted cash held for sale | — | (258) | — | (255) | |||||||||||||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | (28) | (358) | 232 | (369) | |||||||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 658 | 756 | 398 | 767 | |||||||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | 630 | 398 | 630 | 398 | |||||||||||||||||||
| Less: Restricted cash | 12 | 19 | 12 | 19 | |||||||||||||||||||
| Cash and cash equivalents at end of period | $ | 618 | $ | 379 | $ | 618 | $ | 379 | |||||||||||||||
9
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.
10
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.
11
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 September 30, | ||||||||||||||||||||||
| (in millions) | Americas | EMEA | APAC | Total | |||||||||||||||||||
Net sales - 2025 | $ | 4,325 | $ | 1,337 | $ | 780 | $ | 6,442 | |||||||||||||||
| Base year adjustments | |||||||||||||||||||||||
| Divestitures and other | — | (42) | (13) | (55) | |||||||||||||||||||
| Foreign currency | (2) | (16) | 7 | (11) | |||||||||||||||||||
| Adjusted base net sales | 4,323 | 1,279 | 774 | 6,376 | |||||||||||||||||||
| Acquisitions | 2 | — | — | 2 | |||||||||||||||||||
| Organic growth | 605 | 33 | 97 | 735 | |||||||||||||||||||
Net sales - 2026 | $ | 4,930 | $ | 1,312 | $ | 871 | $ | 7,113 | |||||||||||||||
| Growth %: | |||||||||||||||||||||||
| Net sales | 14 | % | (2) | % | 12 | % | 10 | % | |||||||||||||||
| Organic growth | 14 | % | 3 | % | 13 | % | 12 | % | |||||||||||||||
| Net sales | Twelve Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | Americas | EMEA | APAC | Total | |||||||||||||||||||
Net sales - 2025 | $ | 15,831 | $ | 4,968 | $ | 2,797 | $ | 23,596 | |||||||||||||||
| Base year adjustments | |||||||||||||||||||||||
| Divestitures and other | — | (120) | (18) | (138) | |||||||||||||||||||
| Foreign currency | 36 | 153 | 26 | 215 | |||||||||||||||||||
| Adjusted base net sales | 15,867 | 5,001 | 2,805 | 23,673 | |||||||||||||||||||
| Acquisitions | 2 | 3 | — | 5 | |||||||||||||||||||
| Organic growth | 1,529 | 115 | 344 | 1,988 | |||||||||||||||||||
Net sales - 2026 | $ | 17,398 | $ | 5,119 | $ | 3,149 | $ | 25,666 | |||||||||||||||
| Growth %: | |||||||||||||||||||||||
| Net sales | 10 | % | 3 | % | 13 | % | 9 | % | |||||||||||||||
| Organic growth | 10 | % | 2 | % | 12 | % | 8 | % | |||||||||||||||
12
| Products and systems revenue | Three Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | Americas | EMEA | APAC | Total | |||||||||||||||||||
Products and systems revenue - 2025 | $ | 3,093 | $ | 800 | $ | 559 | $ | 4,452 | |||||||||||||||
| Base year adjustments | |||||||||||||||||||||||
| Divestitures and other | — | — | (2) | (2) | |||||||||||||||||||
| Foreign currency | (8) | (8) | 7 | (9) | |||||||||||||||||||
| Adjusted products and systems revenue | 3,085 | 792 | 564 | 4,441 | |||||||||||||||||||
| Acquisitions | 2 | — | — | 2 | |||||||||||||||||||
| Organic growth | 483 | 3 | 85 | 571 | |||||||||||||||||||
Products and systems revenue - 2026 | $ | 3,570 | $ | 795 | $ | 649 | $ | 5,014 | |||||||||||||||
| Growth %: | |||||||||||||||||||||||
| Products and systems revenue | 15 | % | (1) | % | 16 | % | 13 | % | |||||||||||||||
| Organic growth | 16 | % | — | % | 15 | % | 13 | % | |||||||||||||||
| Products and systems revenue | Twelve Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | Americas | EMEA | APAC | Total | |||||||||||||||||||
Products and systems revenue - 2025 | $ | 11,187 | $ | 2,977 | $ | 1,960 | $ | 16,124 | |||||||||||||||
| Base year adjustments | |||||||||||||||||||||||
| Divestitures and other | — | — | (3) | (3) | |||||||||||||||||||
| Foreign currency | 26 | 105 | 22 | 153 | |||||||||||||||||||
| Adjusted products and systems revenue | 11,213 | 3,082 | 1,979 | 16,274 | |||||||||||||||||||
| Acquisitions | 2 | 3 | — | 5 | |||||||||||||||||||
| Organic growth | 1,064 | 48 | 310 | 1,422 | |||||||||||||||||||
Products and systems revenue - 2026 | $ | 12,279 | $ | 3,133 | $ | 2,289 | $ | 17,701 | |||||||||||||||
| Growth %: | |||||||||||||||||||||||
| Products and systems revenue | 10 | % | 5 | % | 17 | % | 10 | % | |||||||||||||||
| Organic growth | 9 | % | 2 | % | 16 | % | 9 | % | |||||||||||||||
13
| Service revenue | Three Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | Americas | EMEA | APAC | Total | |||||||||||||||||||
Service revenue - 2025 | $ | 1,232 | $ | 537 | $ | 221 | $ | 1,990 | |||||||||||||||
| Base year adjustments | |||||||||||||||||||||||
| Divestitures and other | — | (42) | (11) | (53) | |||||||||||||||||||
| Foreign currency | 6 | (8) | — | (2) | |||||||||||||||||||
| Adjusted base service revenue | 1,238 | 487 | 210 | 1,935 | |||||||||||||||||||
| Organic growth | 122 | 30 | 12 | 164 | |||||||||||||||||||
Service revenue - 2026 | $ | 1,360 | $ | 517 | $ | 222 | $ | 2,099 | |||||||||||||||
| Growth %: | |||||||||||||||||||||||
| Service revenue | 10 | % | (4) | % | — | % | 5 | % | |||||||||||||||
| Organic growth | 10 | % | 6 | % | 6 | % | 8 | % | |||||||||||||||
| Service revenue | Twelve Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | Americas | EMEA | APAC | Total | |||||||||||||||||||
Service revenue - 2025 | $ | 4,644 | $ | 1,991 | $ | 837 | $ | 7,472 | |||||||||||||||
| Base year adjustments | |||||||||||||||||||||||
| Divestitures and other | — | (120) | (15) | (135) | |||||||||||||||||||
| Foreign currency | 10 | 48 | 4 | 62 | |||||||||||||||||||
| Adjusted base service revenue | 4,654 | 1,919 | 826 | 7,399 | |||||||||||||||||||
| Organic growth | 465 | 67 | 34 | 566 | |||||||||||||||||||
Service revenue - 2026 | $ | 5,119 | $ | 1,986 | $ | 860 | $ | 7,965 | |||||||||||||||
| Growth %: | |||||||||||||||||||||||
| Service revenue | 10 | % | — | % | 3 | % | 7 | % | |||||||||||||||
| Organic growth | 10 | % | 3 | % | 4 | % | 8 | % | |||||||||||||||
14
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 Ended September 30, | Twelve Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Cash provided by operating activities from continuing operations | $ | 1,300 | $ | 968 | $ | 3,872 | $ | 2,554 | |||||||||||||||
| Income from continuing operations attributable to Johnson Controls | 967 | 267 | 2,880 | 1,721 | |||||||||||||||||||
| Operating cash flow conversion | 134% | 363% | 134% | 148% | |||||||||||||||||||
| Cash provided by operating activities from continuing operations | $ | 1,300 | $ | 968 | $ | 3,872 | $ | 2,554 | |||||||||||||||
| Capital expenditures | (222) | (130) | (465) | (434) | |||||||||||||||||||
| Free cash flow (non-GAAP) | $ | 1,078 | $ | 838 | $ | 3,407 | $ | 2,120 | |||||||||||||||
| Income from continuing operations attributable to Johnson Controls | $ | 967 | $ | 267 | $ | 2,880 | $ | 1,721 | |||||||||||||||
| Free cash flow conversion from net income (non-GAAP) | 111% | 314% | 118 | % | 123 | % | |||||||||||||||||
The following table includes adjusted free cash flow and adjusted free cash flow conversion (unaudited):
| Three Months Ended September 30, | Twelve Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Free cash flow (non-GAAP) | $ | 1,078 | $ | 838 | $ | 3,407 | $ | 2,120 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| JC Capital cash (provided) used by operating activities | 9 | 38 | (24) | 149 | |||||||||||||||||||
| Water systems AFFF settlement cash payments and insurance recoveries | 9 | 3 | (156) | 386 | |||||||||||||||||||
| IP license prepayments | — | (240) | (29) | (240) | |||||||||||||||||||
| Discrete tax payments | — | 71 | 31 | 71 | |||||||||||||||||||
| Impact of discontinued factoring program | — | — | — | 15 | |||||||||||||||||||
| Adjusted free cash flow (non-GAAP) | $ | 1,096 | $ | 710 | $ | 3,229 | $ | 2,501 | |||||||||||||||
| Adjusted net income attributable to JCI (non-GAAP) | $ | 1,008 | $ | 798 | $ | 3,153 | $ | 2,462 | |||||||||||||||
| JC Capital net (income) loss | (28) | 1 | (6) | (3) | |||||||||||||||||||
| Adjusted net income attributable to JCI, excluding JC Capital (non-GAAP) | $ | 980 | $ | 799 | $ | 3,147 | $ | 2,459 | |||||||||||||||
| Adjusted free cash flow conversion (non-GAAP) | 112% | 89% | 103% | 102 | % | ||||||||||||||||||
15
5. EBIT, Segment Profitability and Corporate Expense
The following table reconciles income from continuing operations before income taxes to EBIT and adjusted EBIT (unaudited):
| Three Months Ended September 30, | Twelve Months Ended September 30, | |||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Income from continuing operations: | ||||||||||||||||||||||||||
| Attributable to Johnson Controls | $ | 967 | $ | 267 | $ | 2,880 | $ | 1,721 | ||||||||||||||||||
| Attributable to noncontrolling interests | 3 | 3 | 10 | 3 | ||||||||||||||||||||||
| Income from continuing operations | 970 | 270 | 2,890 | 1,724 | ||||||||||||||||||||||
Less: Income tax provision (1) | 93 | 85 | 536 | 245 | ||||||||||||||||||||||
| Income before income taxes | 1,063 | 355 | 3,426 | 1,969 | ||||||||||||||||||||||
| Net financing charges | 82 | 76 | 279 | 319 | ||||||||||||||||||||||
| EBIT | $ | 1,145 | $ | 431 | $ | 3,705 | $ | 2,288 | ||||||||||||||||||
| EBIT margin | 16.1 | % | 6.7 | % | 14.4 | % | 9.7 | % | ||||||||||||||||||
| Adjusting items: | ||||||||||||||||||||||||||
| Net mark-to-market adjustments | 57 | (13) | 73 | (6) | ||||||||||||||||||||||
| Restructuring and impairment costs | (87) | (400) | (311) | (546) | ||||||||||||||||||||||
| Water systems AFFF insurance recoveries | 1 | 26 | 149 | 39 | ||||||||||||||||||||||
| Transaction/separation costs | (30) | (12) | (73) | (39) | ||||||||||||||||||||||
| Transformation costs | (95) | (56) | (292) | (180) | ||||||||||||||||||||||
| ERP asset - accelerated depreciation | — | (102) | — | (102) | ||||||||||||||||||||||
| Gain on divestiture | — | — | 70 | — | ||||||||||||||||||||||
| Adjusted EBIT (non-GAAP) | $ | 1,299 | $ | 988 | $ | 4,089 | $ | 3,122 | ||||||||||||||||||
| Adjusted EBIT margin (non-GAAP) | 18.3 | % | 15.3 | % | 15.9 | % | 13.2 | % | ||||||||||||||||||
(1) Adjusted income tax provision excludes the net tax impacts of pre-tax adjusting items and discrete tax items.
16
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):
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| (in millions) | Americas | EMEA | APAC | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||
| Sales | $ | 4,930 | $ | 4,325 | $ | 1,312 | $ | 1,337 | $ | 871 | $ | 780 | |||||||||||||||||||||||
| Segment EBIT | 992 | 763 | 198 | 188 | 162 | 136 | |||||||||||||||||||||||||||||
| Amortization | 77 | 81 | 7 | 13 | 3 | 3 | |||||||||||||||||||||||||||||
| Segment EBITA (non-GAAP) | 1,069 | 844 | 205 | 201 | 165 | 139 | |||||||||||||||||||||||||||||
| Adjusting items: | |||||||||||||||||||||||||||||||||||
| Transformation costs | 17 | 18 | 10 | 7 | — | — | |||||||||||||||||||||||||||||
| Adjusted Segment EBIT (non-GAAP) | 1,009 | 781 | 208 | 195 | 162 | 136 | |||||||||||||||||||||||||||||
| Adjusted Segment EBITA (non-GAAP) | 1,086 | 862 | 215 | 208 | 165 | 139 | |||||||||||||||||||||||||||||
| Segment EBIT margin % | 20.1 | % | 17.6 | % | 15.1 | % | 14.1 | % | 18.6 | % | 17.4 | % | |||||||||||||||||||||||
| Adjusted Segment EBIT margin % (non-GAAP) | 20.5 | % | 18.1 | % | 15.9 | % | 14.6 | % | 18.6 | % | 17.4 | % | |||||||||||||||||||||||
| Segment EBITA margin % (non-GAAP) | 21.7 | % | 19.5 | % | 15.6 | % | 15.0 | % | 18.9 | % | 17.8 | % | |||||||||||||||||||||||
| Adjusted Segment EBITA margin % (non-GAAP) | 22.0 | % | 19.9 | % | 16.4 | % | 15.6 | % | 18.9 | % | 17.8 | % | |||||||||||||||||||||||
| Twelve Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| (in millions) | Americas | EMEA | APAC | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||
| Sales | $ | 17,398 | $ | 15,831 | $ | 5,119 | $ | 4,968 | $ | 3,149 | $ | 2,797 | |||||||||||||||||||||||
| Segment EBIT | 3,088 | 2,526 | 700 | 581 | 589 | 461 | |||||||||||||||||||||||||||||
| Amortization | 309 | 356 | 28 | 68 | 14 | 15 | |||||||||||||||||||||||||||||
| Segment EBITA (non-GAAP) | 3,397 | 2,882 | 728 | 649 | 603 | 476 | |||||||||||||||||||||||||||||
| Adjusting items: | |||||||||||||||||||||||||||||||||||
| Transformation costs | 74 | 24 | 23 | 9 | 4 | — | |||||||||||||||||||||||||||||
| Adjusted Segment EBIT (non-GAAP) | 3,162 | 2,550 | 723 | 590 | 593 | 461 | |||||||||||||||||||||||||||||
| Adjusted Segment EBITA (non-GAAP) | 3,471 | 2,906 | 751 | 658 | 607 | 476 | |||||||||||||||||||||||||||||
| Segment EBIT margin % | 17.7 | % | 16.0 | % | 13.7 | % | 11.7 | % | 18.7 | % | 16.5 | % | |||||||||||||||||||||||
| Adjusted Segment EBIT margin % (non-GAAP) | 18.2 | % | 16.1 | % | 14.1 | % | 11.9 | % | 18.8 | % | 16.5 | % | |||||||||||||||||||||||
| Segment EBITA margin % (non-GAAP) | 19.5 | % | 18.2 | % | 14.2 | % | 13.1 | % | 19.1 | % | 17.0 | % | |||||||||||||||||||||||
| Adjusted Segment EBITA margin % (non-GAAP) | 20.0 | % | 18.4 | % | 14.7 | % | 13.2 | % | 19.3 | % | 17.0 | % | |||||||||||||||||||||||
17
The following table reconciles adjusted Segment EBITA (non-GAAP) to adjusted Segment EBITA margin (non-GAAP) (unaudited):
| Three Months Ended September 30, | Twelve Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Adjusted Segment EBITA (non-GAAP) | |||||||||||||||||||||||
| Americas | $ | 1,086 | $ | 862 | $ | 3,471 | $ | 2,906 | |||||||||||||||
| EMEA | 215 | 208 | 751 | 658 | |||||||||||||||||||
| APAC | 165 | 139 | 607 | 476 | |||||||||||||||||||
| Sales | 7,113 | 6,442 | 25,666 | 23,596 | |||||||||||||||||||
| Adjusted Segment EBITA margin (non-GAAP) | 20.6 | % | 18.8 | % | 18.8 | % | 17.1 | % | |||||||||||||||
The following table reconciles Corporate expense from continuing operations as reported to the comparable adjusted amounts (unaudited):
| Three Months Ended September 30, | Twelve Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Corporate expense (GAAP) | $ | 178 | $ | 269 | $ | 653 | $ | 767 | |||||||||||||||
| Adjusting items: | |||||||||||||||||||||||
| Transaction/separation costs | (30) | (12) | (73) | (39) | |||||||||||||||||||
| Transformation costs | (68) | (31) | (191) | (147) | |||||||||||||||||||
| ERP asset - accelerated depreciation | — | (102) | — | (102) | |||||||||||||||||||
| Adjusted corporate expense (non-GAAP) | $ | 80 | $ | 124 | $ | 389 | $ | 479 | |||||||||||||||
18
6. Net Income and Diluted Earnings Per Share
The following tables reconcile net 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 September 30, | |||||||||||||||||||||||
| Income from continuing operations attributable to JCI | Diluted earnings per share | ||||||||||||||||||||||
| (in millions, except per share) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| As reported (GAAP) | $ | 967 | $ | 267 | $ | 1.60 | $ | 0.42 | |||||||||||||||
| Adjusting items: | |||||||||||||||||||||||
| Net mark-to-market adjustments | (57) | 13 | (0.09) | 0.02 | |||||||||||||||||||
| Restructuring and impairment costs | 87 | 400 | 0.14 | 0.63 | |||||||||||||||||||
| Water systems AFFF insurance recoveries | (1) | (26) | — | (0.04) | |||||||||||||||||||
| Transaction/separation costs | 30 | 12 | 0.05 | 0.02 | |||||||||||||||||||
| ERP asset - accelerated depreciation | — | 102 | — | 0.16 | |||||||||||||||||||
| Transformation costs | 95 | 56 | 0.16 | 0.09 | |||||||||||||||||||
| Discrete tax items | (90) | 50 | (0.15) | 0.08 | |||||||||||||||||||
| Related tax impact | (23) | (76) | (0.04) | (0.12) | |||||||||||||||||||
| Adjusted (non-GAAP)* | $ | 1,008 | $ | 798 | $ | 1.66 | $ | 1.26 | |||||||||||||||
* May not sum due to rounding
| Twelve Months Ended September 30 | |||||||||||||||||||||||
| Income from continuing operations attributable to JCI | Diluted earnings per share | ||||||||||||||||||||||
| (in millions, except per share) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| As reported (GAAP) | $ | 2,880 | $ | 1,721 | $ | 4.72 | $ | 2.63 | |||||||||||||||
| Adjusting items: | |||||||||||||||||||||||
| Net mark-to-market adjustments | (73) | 6 | (0.12) | 0.01 | |||||||||||||||||||
| Gain on divestiture | (70) | — | (0.11) | — | |||||||||||||||||||
| Restructuring and impairment costs | 311 | 546 | 0.51 | 0.83 | |||||||||||||||||||
| Water systems AFFF insurance recoveries | (149) | (39) | (0.24) | (0.06) | |||||||||||||||||||
| Transaction/separation costs | 73 | 39 | 0.12 | 0.06 | |||||||||||||||||||
| ERP asset - accelerated depreciation | — | 102 | — | 0.16 | |||||||||||||||||||
| Transformation costs | 292 | 180 | 0.48 | 0.28 | |||||||||||||||||||
| Discrete tax items | (79) | (36) | (0.13) | (0.06) | |||||||||||||||||||
| Related tax impact | (32) | (57) | (0.05) | (0.07) | |||||||||||||||||||
| Adjusted (non-GAAP)* | $ | 3,153 | $ | 2,462 | $ | 5.16 | $ | 3.76 | |||||||||||||||
* May not sum due to rounding
19
The following table reconciles the denominators used to calculate basic and diluted earnings per share (in millions; unaudited):
| Three Months Ended September 30, | Twelve Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||
| Basic weighted average shares outstanding | 604 | 631 | 609 | 652 | |||||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||||||||
| Stock options, unvested restricted stock and unvested performance share awards | 2 | 2 | 2 | 2 | |||||||||||||||||||
| Diluted weighted average shares outstanding | 606 | 633 | 611 | 654 | |||||||||||||||||||
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) | September 30, 2026 | June 30, 2026 | September 30, 2025 | ||||||||||||||
| Short-term debt | $ | 678 | $ | 865 | $ | 723 | |||||||||||
| Current portion of long-term debt | 1,066 | 311 | 566 | ||||||||||||||
| Long-term debt | 7,533 | 8,299 | 8,591 | ||||||||||||||
| Total debt | 9,277 | 9,475 | 9,880 | ||||||||||||||
| Less: cash and cash equivalents | 618 | 641 | 379 | ||||||||||||||
| Net debt | $ | 8,659 | $ | 8,834 | $ | 9,501 | |||||||||||
| Last twelve months income before income taxes | $ | 3,426 | $ | 2,718 | $ | 1,969 | |||||||||||
| Net debt to income before income taxes | 2.5 | x | 3.3 | x | 4.8 | x | |||||||||||
| Last twelve months adjusted EBITDA (non-GAAP) | $ | 4,743 | $ | 4,553 | $ | 3,987 | |||||||||||
| Net debt to adjusted EBITDA (non-GAAP) | 1.8x | 1.9x | 2.4x | ||||||||||||||
20
The following table reconciles income from continuing operations to adjusted EBIT and adjusted EBITDA (unaudited):
| Twelve Months Ended | |||||||||||||||||
| (in millions) | September 30, 2026 | June 30, 2026 | September 30, 2025 | ||||||||||||||
| Income from continuing operations | $ | 2,890 | $ | 2,190 | $ | 1,724 | |||||||||||
| Income tax provision | 536 | 528 | 245 | ||||||||||||||
| Income before income taxes | 3,426 | 2,718 | 1,969 | ||||||||||||||
| Net financing charges | 279 | 273 | 319 | ||||||||||||||
| EBIT | 3,705 | 2,991 | 2,288 | ||||||||||||||
| Adjusting items: | |||||||||||||||||
| Net mark-to-market adjustments | (73) | (3) | 6 | ||||||||||||||
| Restructuring and impairment costs | 311 | 624 | 546 | ||||||||||||||
| Water systems AFFF insurance recoveries | (149) | (174) | (39) | ||||||||||||||
| Transaction/separation costs | 73 | 55 | 39 | ||||||||||||||
| Transformation costs | 292 | 253 | 180 | ||||||||||||||
| ERP asset - accelerated depreciation | — | 102 | 102 | ||||||||||||||
| Gain on divestiture | (70) | (70) | — | ||||||||||||||
| Adjusted EBIT (non-GAAP) | 4,089 | 3,778 | 3,122 | ||||||||||||||
| Depreciation and amortization | 654 | 775 | 865 | ||||||||||||||
| Adjusted EBITDA (non-GAAP) | $ | 4,743 | $ | 4,553 | $ | 3,987 | |||||||||||
8. Income Taxes
After adjusting for certain non-recurring items, the Company's effective tax rate for continuing operations was approximately 17% for the three and twelve months ended September 30, 2026 and approximately 12% for the three and twelve months ended September 30, 2025.
21