Johnson Controls Reports Q4 and FY26 Results; Initiates FY27 Guidance
FOR IMMEDIATE RELEASE Johnson Controls Reports Q4 and FY26 Results; Initiates FY27 Guidance
* 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. ________________________________________________________________________________ _____
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.
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.”
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
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.
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.
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.
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.
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.
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.
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. ###
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 4 14 sale Other current assets 1,741 1,680 Current assets 11,678 10,162 Property, plant and 2,106 2,193 equipment - net Goodwill 16,640 16,633 Other intangible assets - 3,482 3,613 net Noncurrent assets held for 231 140 sale Other noncurrent assets 6,065 5,198 Total assets $ 40,202 $ 37,939 Liabilities and Equity Short-term debt $ 678 $ 723 Current portion of 1,066 566 long-term debt Accounts payable 4,381 3,614 Accrued compensation and 1,198 1,268 benefits Deferred revenue 3,370 2,470 Current liabilities held 6 12 for sale Other current liabilities 2,220 2,288 Current liabilities 12,919 10,941 Long-term debt 7,533 8,591 Pension and postretirement 204 211 benefits Noncurrent liabilities 34 9 held for sale Other noncurrent 5,866 5,233 liabilities Noncurrent liabilities 13,637 14,044 Shareholders’ equity attributable to 13,611 12,927 Johnson Controls Noncontrolling interests 35 27 Total equity 13,646 12,954 Total liabilities and $ 40,202 $ 37,939 equity
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.
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 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.
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 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:
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.
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.
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.
represents a change in ERP strategy within the EMEA segment, which led to certain assets being abandoned and the useful lives reduced.
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.
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 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.
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
The following tables detail the changes in sales from continuing operations attributable to organic growth, foreign currency, acquisitions, divestitures and other (unaudited):
The following table includes operating cash flow conversion, free cash flow and free cash flow conversion (unaudited):
The following table includes adjusted free cash flow and adjusted free cash flow conversion (unaudited):
The following table reconciles income from continuing operations before income taxes to EBIT and adjusted EBIT (unaudited):
(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):
17 The following table reconciles adjusted Segment EBITA (non-GAAP) to adjusted Segment EBITA margin (non-GAAP) (unaudited):
The following table reconciles Corporate expense from continuing operations as reported to the comparable adjusted amounts (unaudited):
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):
* 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 Twelve Months Months Ended Ended Septe… Septe… 30, 30, 2026 2025 2026 2025 Weig… aver… shar… outs… Basic weig… aver… 604 631 609 652 shar… outs… Effe… of dilu… secu… Stock opti… unve… rest… stock 2 2 2 2 and unve… perf… share awar… Dilu… weig… aver… 606 633 611 654 shar… outs…
The following table includes continuing operations and details net debt to income before income taxes and net debt to adjusted EBITDA (unaudited):
20 The following table reconciles income from continuing operations to adjusted EBIT and adjusted EBITDA (unaudited):
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
Full text with the tables
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
(in
millions) Fiscal Q4 2026 2025 Change
──────────────────────────────────────────────────────────────────────────────
Sales $ 4,930 $ 4,325 14 %
Segment 992 763 30 %
EBIT
Segment
EBIT 20.1 % 17.6 % 250 bp
Margin %
Segment
EBITA 1,069 844 27 %
(non-GAAP)
Adjusted
Segment 1,086 862 26 %
EBITA
(non-GAAP)
Adjusted
Segment
EBITA 22.0 % 19.9 % 210 bp
Margin %
(non-GAAP)
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)
(in
millions) Fiscal Q4 2026 2025 Change
──────────────────────────────────────────────────────────────────────────────
Sales $ 1,312 $ 1,337 (2 %)
Segment 198 188 5 %
EBIT
Segment
EBIT 15.1 % 14.1 % 100 bps
Margin %
Segment
EBITA 205 201 2 %
(non-GAAP)
Adjusted
Segment 215 208 3 %
EBITA
(non-GAAP)
Adjusted
Segment
EBITA 16.4 % 15.6 % 80 bps
Margin %
(non-GAAP)
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)
(in
millions) Fiscal Q4 2026 2025 Change
──────────────────────────────────────────────────────────────────────────────
Sales $ 871 $ 780 12 %
Segment EBIT 162 136 19 %
Segment EBIT 18.6 % 17.4 % 120 bp
Margin %
Segment
EBITA 165 139 19 %
(non-GAAP)
Adjusted
Segment 165 139 19 %
EBITA
(non-GAAP)
Adjusted
Segment
EBITA Margin 18.9 % 17.8 % 110 bp
%
(non-GAAP)
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
(in millions) Fiscal Q4
Corporate Expense 2026 2025 Change
───────────────────────────────────────────────────────────────────────
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 Twelve
Months Months
Ended Ended
Septemb… Septem…
Net 30, 30,
sales 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Produc…
and $ 5,014 $ 4,452 $ 17,701 $ 16,124
systems
Servic… 2,099 1,990 7,965 7,472
7,113 6,442 25,666 23,596
Cost of
sales
Produc…
and 3,249 2,908 11,697 10,543
systems
Servic… 1,159 1,183 4,454 4,461
4,408 4,091 16,151 15,004
Gross 2,705 2,351 9,515 8,592
profit
Sellin…
general
and 1,481 1,521 5,510 5,764
admini…
expens…
Restru…
and 87 400 311 546
impair…
costs
Net
financ… 82 76 279 319
charges
Equity 8 1 11 6
income
Income
from
contin…
operat… 1,063 355 3,426 1,969
before
income
taxes
Income
tax 93 85 536 245
provis…
Income
from 970 270 2,890 1,724
contin…
operat…
Income
(loss)
from
discon… — 1,488 -27 1,789
operat…
net of
tax
Net 970 1,758 2,863 3,513
income
Income
attrib…
to
noncon…
intere…
Contin… 3 3 10 3
operat…
Discon… — 62 — 219
operat…
Net
income
attrib… $ 967 $ 1,693 $ 2,853 $ 3,291
to
Johnson
Contro…
Income
(loss)
attrib…
to
Johnson
Contro…
Contin… $ 967 $ 267 $ 2,880 $ 1,721
operat…
Discon… — 1,426 -27 1,570
operat…
Total $ 967 $ 1,693 $ 2,853 $ 3,291
Basic
earnin…
(loss)
per
share
attrib…
to
Johnson
Contro…
Contin… $ 1.60 $ 0.42 $ 4.73 $ 2.64
operat…
Discon… — 2.26 -0.04 2.40
operat…
Total $ 1.60 $ 2.68 $ 4.69 $ 5.04
Diluted
earnin…
(loss)
per
share
attrib…
to
Johnson
Contro…
Contin… $ 1.60 $ 0.42 $ 4.72 $ 2.63
operat…
Discon… — 2.25 -0.04 2.40
operat…
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 4 14
sale
Other current assets 1,741 1,680
Current assets 11,678 10,162
Property, plant and 2,106 2,193
equipment - net
Goodwill 16,640 16,633
Other intangible assets - 3,482 3,613
net
Noncurrent assets held for 231 140
sale
Other noncurrent assets 6,065 5,198
Total assets $ 40,202 $ 37,939
Liabilities and Equity
Short-term debt $ 678 $ 723
Current portion of 1,066 566
long-term debt
Accounts payable 4,381 3,614
Accrued compensation and 1,198 1,268
benefits
Deferred revenue 3,370 2,470
Current liabilities held 6 12
for sale
Other current liabilities 2,220 2,288
Current liabilities 12,919 10,941
Long-term debt 7,533 8,591
Pension and postretirement 204 211
benefits
Noncurrent liabilities 34 9
held for sale
Other noncurrent 5,866 5,233
liabilities
Noncurrent liabilities 13,637 14,044
Shareholders’ equity
attributable to 13,611 12,927
Johnson Controls
Noncontrolling interests 35 27
Total equity 13,646 12,954
Total liabilities and $ 40,202 $ 37,939
equity
8
Johnson Controls International plc
Consolidated Statements of Cash Flows
(in millions; unaudited)
Opera…
Activ…
of
Conti… Three Twelve
Opera… Months Months
Income Ended Ended
from Septem… Septem…
conti… 30, 30,
opera… 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Attri…
to $ 967 $ 267 $ 2,880 $ 1,721
Johns…
Contr…
Attri…
to 3 3 10 3
nonco…
inter…
Total 970 270 2,890 1,724
Adjus…
to
recon…
net
income
to
cash
provi…
by
opera…
activ…
of
conti…
opera…
Depre…
and 159 280 654 865
amort…
Pensi…
and -76 11 -115 -41
postr…
benef…
Defer…
income -740 341 -798 195
taxes
Non-c…
restr…
and 35 371 195 427
impai…
charg…
Equit… 29 33 124 140
compe…
Other -3 -36 -87 -28
- net
Chang…
in
assets
and
liabi…
Accou… -339 -132 -1,096 -211
recei…
Inven… -44 4 -210 -75
Other -140 -292 -78 -581
assets
Restr… 24 -1 -1 1
reser…
Accou…
payab…
and 951 663 1,715 694
accru…
liabi…
Accru…
income 474 -544 679 -556
taxes
Cash
provi…
by
opera… 1,300 968 3,872 2,554
activ…
from
conti…
opera…
Inves…
Activ…
of
Conti…
Opera…
Capit… -222 -130 -465 -434
expen…
Acqui…
of
busin… — -1 -291 -10
net of
cash
acqui…
Dives…
of
busin… — 3 331 5
net of
cash
dives…
Other -11 18 -43 27
- net
Cash
used
by
inves… -233 -110 -468 -412
activ…
from
conti…
opera…
Finan…
Activ…
of
Conti…
Opera…
Net
proce…
from
(repa…
of)
borro… 24 -245 -170 38
with
matur…
less
than
three
months
Proce…
from — 396 545 1,765
debt
Repay…
of -220 -552 -859 -1,648
debt
Stock
repur… -655 -5,021 -1,505 -5,991
and
retir…
Payme…
of -242 -243 -976 -976
cash
divid…
Other -9 -8 -83 28
- net
Cash
used
by
finan… -1,102 -5,673 -3,048 -6,784
activ…
from
conti…
opera…
Disco…
Opera…
Cash
used
by — -1,410 -98 -1,155
opera…
activ…
Cash
provi…
(used) — 6,598 -155 6,546
by
inves…
activ…
Cash
used
by — -430 — -604
finan…
activ…
Cash
provi…
(used) — 4,758 -253 4,787
by
disco…
opera…
Effect
of
excha…
rate
chang…
on 7 -43 129 -259
cash,
cash
equiv…
and
restr…
cash
Change
in
cash,
cash
equiv…
and — -258 — -255
restr…
cash
held
for
sale
Incre…
(decr…
in
cash,
cash -28 -358 232 -369
equiv…
and
restr…
cash
Cash,
cash
equiv…
and
restr… 658 756 398 767
cash
at
begin…
of
period
Cash,
cash
equiv…
and
restr… 630 398 630 398
cash
at end
of
period
Less:
Restr… 12 19 12 19
cash
Cash
and
cash
equiv… $ 618 $ 379 $ 618 $ 379
at end
of
period
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):
Three
Mont…
Net Ended
sal… Sept…
(in 30,
mil… Amer… EMEA APAC Total
──────────────────────────────────────────────────────────────────────────────
Net
sal… $ 4,325 $ 1,337 $ 780 $ 6,442
-
2025
Base
year
adj…
Div…
and — -42 -13 -55
oth…
For… -2 -16 7 -11
cur…
Adj…
base 4,323 1,279 774 6,376
net
sal…
Acq… 2 — — 2
Org… 605 33 97 735
gro…
Net
sal… $ 4,930 $ 1,312 $ 871 $ 7,113
-
2026
Gro…
%:
Net 14 % -2 % 12 % 10 %
sal…
Org… 14 % 3 % 13 % 12 %
gro…
Twel…
Mont…
Net Ended
sal… Sept…
(in 30,
mil… Amer… EMEA APAC Total
──────────────────────────────────────────────────────────────────────────────
Net
sal… $ 15,8… $ 4,968 $ 2,7… $ 23,…
-
2025
Base
year
adj…
Div…
and — -120 -18 -138
oth…
For… 36 153 26 215
cur…
Adj…
base 15,8… 5,001 2,8… 23,…
net
sal…
Acq… 2 3 — 5
Org… 1,529 115 344 1,9…
gro…
Net
sal… $ 17,3… $ 5,119 $ 3,1… $ 25,…
-
2026
Gro…
%:
Net 10 % 3 % 13 % 9 %
sal…
Org… 10 % 2 % 12 % 8 %
gro…
12
Prod… Three
and Months
syst… Ended
reve… Septe…
(in 30,
mill… Ameri… EMEA APAC Total
──────────────────────────────────────────────────────────────────────────────
Prod…
and
syst… $ 3,093 $ 800 $ 559 $ 4,452
reve…
-
2025
Base
year
adju…
Dive…
and — — -2 -2
other
Fore… -8 -8 7 -9
curr…
Adju…
prod…
and 3,085 792 564 4,441
syst…
reve…
Acqu… 2 — — 2
Orga… 483 3 85 571
grow…
Prod…
and
syst… $ 3,570 $ 795 $ 649 $ 5,014
reve…
-
2026
Grow…
%:
Prod…
and 15 % -1 % 16 % 13 %
syst…
reve…
Orga… 16 % — % 15 % 13 %
grow…
Pro… Twel…
and Mont…
sys… Ended
rev… Sept…
(in 30,
mil… Amer… EMEA APAC Total
──────────────────────────────────────────────────────────────────────────────
Pro…
and
sys… $ 11,1… $ 2,977 $ 1,9… $ 16,…
rev…
-
2025
Base
year
adj…
Div…
and — — -3 -3
oth…
For… 26 105 22 153
cur…
Adj…
pro…
and 11,2… 3,082 1,9… 16,…
sys…
rev…
Acq… 2 3 — 5
Org… 1,064 48 310 1,4…
gro…
Pro…
and
sys… $ 12,2… $ 3,133 $ 2,2… $ 17,…
rev…
-
2026
Gro…
%:
Pro…
and 10 % 5 % 17 % 10 %
sys…
rev…
Org… 9 % 2 % 16 % 9 %
gro…
13
Three
Months
Serv… Ended
reve… Septe…
(in 30,
mill… Ameri… EMEA APAC Total
──────────────────────────────────────────────────────────────────────────────
Serv…
reve… $ 1,232 $ 537 $ 221 $ 1,990
-
2025
Base
year
adju…
Dive…
and — -42 -11 -53
other
Fore… 6 -8 — -2
curr…
Adju…
base 1,238 487 210 1,935
serv…
reve…
Orga… 122 30 12 164
grow…
Serv…
reve… $ 1,360 $ 517 $ 222 $ 2,099
-
2026
Grow…
%:
Serv… 10 % -4 % — % 5 %
reve…
Orga… 10 % 6 % 6 % 8 %
grow…
Twel…
Mont…
Ser… Ended
rev… Sept…
(in 30,
mil… Amer… EMEA APAC Total
──────────────────────────────────────────────────────────────────────────────
Ser…
rev… $ 4,644 $ 1,991 $ 837 $ 7,472
-
2025
Base
year
adj…
Div…
and — -120 -15 -135
oth…
For… 10 48 4 62
cur…
Adj…
base 4,654 1,919 826 7,399
ser…
rev…
Org… 465 67 34 566
gro…
Ser…
rev… $ 5,119 $ 1,986 $ 860 $ 7,965
-
2026
Gro…
%:
Ser… 10 % — % 3 % 7 %
rev…
Org… 10 % 3 % 4 % 8 %
gro…
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):
Thr… Twe…
Mon… Mon…
End… End…
Sep… Sep…
(in 30, 30,
mil… 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Cash
pro…
by
ope… $ 1,300 $ 968 $ 3,872 $ 2,5…
act…
from
con…
ope…
Inc…
from
con…
ope… 967 267 2,880 1,7…
att…
to
Joh…
Con…
Ope…
cash 134% 363% 134% 148%
flow
con…
Cash
pro…
by
ope… $ 1,300 $ 968 $ 3,872 $ 2,5…
act…
from
con…
ope…
Cap… -222 -130 -465 -434
exp…
Free
cash $ 1,078 $ 838 $ 3,407 $ 2,1…
flow
(no…
Inc…
from
con…
ope… $ 967 $ 267 $ 2,880 $ 1,7…
att…
to
Joh…
Con…
Free
cash
flow
con… 111% 314% 118 % 123 %
from
net
inc…
(no…
The following table includes adjusted free cash flow and adjusted free cash flow
conversion (unaudited):
Three Twel…
Mont… Mont…
Ended Ended
Sept… Sept…
(in 30, 30,
mil… 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Free
cash $ 1,078 $ 838 $ 3,407 $ 2,120
flow
(no…
Adj…
JC
Cap…
cash
(pr… 9 38 -24 149
used
by
ope…
act…
Wat…
sys…
AFFF
set…
cash 9 3 -156 386
pay…
and
ins…
rec…
IP
lic… — -240 -29 -240
pre…
Dis…
tax — 71 31 71
pay…
Imp…
of
dis… — — — 15
fac…
pro…
Adj…
free
cash $ 1,096 $ 710 $ 3,229 $ 2,501
flow
(no…
Adj…
net
inc…
att… $ 1,008 $ 798 $ 3,153 $ 2,462
to
JCI
(no…
JC
Cap…
net -28 1 -6 -3
(in…
loss
Adj…
net
inc…
att…
to $ 980 $ 799 $ 3,147 $ 2,459
JCI,
exc…
JC
Cap…
(no…
Adj…
free
cash 112% 89% 103% 102 %
flow
con…
(no…
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):
(in Three Twel…
mil… Mont… Mont…
Inc… Ended Ended
from Sept… Sept…
con… 30, 30,
ope… 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Att…
to $ 967 $ 267 $ 2,880 $ 1,7…
Joh…
Con…
Att…
to 3 3 10 3
non…
int…
Inc…
from 970 270 2,890 1,7…
con…
ope…
Les…
Inc… 93 85 536 245
tax
pro…
Inc…
bef… 1,063 355 3,426 1,9…
inc…
tax…
Net
fin… 82 76 279 319
cha…
EBIT $ 1,145 $ 431 $ 3,705 $ 2,2…
EBIT 16.1 % 6.7 % 14.4 % 9.7 %
mar…
Adj…
ite…
Net
mar… 57 -13 73 -6
adj…
Res…
and -87 -400 -311 -546
imp…
cos…
Wat…
sys…
AFFF 1 26 149 39
ins…
rec…
Tra… -30 -12 -73 -39
cos…
Tra… -95 -56 -292 -180
cos…
ERP
ass…
- — -102 — -102
acc…
dep…
Gain
on — — 70 —
div…
Adj…
EBIT $ 1,299 $ 988 $ 4,089 $ 3,1…
(no…
Adj…
EBIT 18.3 % 15.3 % 15.9 % 13.2 %
mar…
(no…
(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):
T…
M…
E…
S…
… 3…
… A… 2… 2… E… 2… 2… A… 2… 2…
──────────────────────────────────────────────────────────────────────────────
… $ 4… $ 4… $ 1… $ 1… $ 8… $ 7…
… 9… 7… 1… 1… 1… 1…
…
… 77 81 7 13 3 3
…
… 1… 8… 2… 2… 1… 1…
…
…
…
… 17 18 10 7 — —
…
…
… 1… 7… 2… 1… 1… 1…
…
…
…
… 1… 8… 2… 2… 1… 1…
…
…
…
… 2… % 1… % 1… % 1… % 1… % 1… %
…
%
…
…
… 2… % 1… % 1… % 1… % 1… % 1… %
…
%
…
…
…
… 2… % 1… % 1… % 1… % 1… % 1… %
%
…
…
…
… 2… % 1… % 1… % 1… % 1… % 1… %
…
%
…
T…
M…
E…
S…
… 3…
… A… 2… 2… E… 2… 2… A… 2… 2…
──────────────────────────────────────────────────────────────────────────────
… $ 1… $ 1… $ 5… $ 4… $ 3… $ 2…
… 3… 2… 7… 5… 5… 4…
…
… 3… 3… 28 68 14 15
…
… 3… 2… 7… 6… 6… 4…
…
…
…
… 74 24 23 9 4 —
…
…
… 3… 2… 7… 5… 5… 4…
…
…
…
… 3… 2… 7… 6… 6… 4…
…
…
…
… 1… % 1… % 1… % 1… % 1… % 1… %
…
%
…
…
… 1… % 1… % 1… % 1… % 1… % 1… %
…
%
…
…
…
… 1… % 1… % 1… % 1… % 1… % 1… %
%
…
…
…
… 2… % 1… % 1… % 1… % 1… % 1… %
…
%
…
17
The following table reconciles adjusted Segment EBITA (non-GAAP) to adjusted
Segment EBITA margin (non-GAAP) (unaudited):
(in Three Twe…
mil… Mont… Mon…
Adj… Ended End…
Seg… Sept… Sep…
EBI… 30, 30,
(no… 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Ame… $ 1,086 $ 862 $ 3,471 $ 2,9…
EMEA 215 208 751 658
APAC 165 139 607 476
Sal… 7,113 6,442 25,6… 23,…
Adj…
Seg…
EBI… 20.6 % 18.8 % 18.8 % 17.1 %
mar…
(no…
The following table reconciles Corporate expense from continuing operations as
reported to the comparable adjusted amounts (unaudited):
Three Twelve
Months Months
Ended Ended
(in September September
millions) 2026 30, 2025 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Corporate
expense $ 178 $ 269 $ 653 $ 767
(GAAP)
Adjusting
items:
Transact… -30 -12 -73 -39
costs
Transfor… -68 -31 -191 -147
costs
ERP asset
- — -102 — -102
accelera…
deprecia…
Adjusted
corporate $ 80 $ 124 $ 389 $ 479
expense
(non-GAA…
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
Septemb…
30,
Income
(in from
million… continu… Diluted
except operati… earnings
per attribu… per
share) to JCI 2026 2025 share 2026 2025
──────────────────────────────────────────────────────────────────────────────
As
report… $ 967 $ 267 $ 1.60 $ 0.42
(GAAP)
Adjust…
items:
Net
mark-t… -57 13 -0.09 0.02
adjust…
Restru…
and 87 400 0.14 0.63
impair…
costs
Water
systems
AFFF -1 -26 — -0.04
insura…
recove…
Transa… 30 12 0.05 0.02
costs
ERP
asset - — 102 — 0.16
accele…
deprec…
Transf… 95 56 0.16 0.09
costs
Discre…
tax -90 50 -0.15 0.08
items
Related
tax -23 -76 -0.04 -0.12
impact
Adjust… $ 1,008 $ 798 $ 1.66 $ 1.26
(non-G…
* May not sum due to rounding
Twelve
Months
Ended
Septemb…
30
Income
(in from
million… continu… Diluted
except operati… earnin…
per attribu… per
share) to JCI 2026 2025 share 2026 2025
──────────────────────────────────────────────────────────────────────────────
As
report… $ 2,880 $ 1,721 $ 4.72 $ 2.63
(GAAP)
Adjust…
items:
Net
mark-t… -73 6 -0.12 0.01
adjust…
Gain on -70 — -0.11 —
divest…
Restru…
and 311 546 0.51 0.83
impair…
costs
Water
systems
AFFF -149 -39 -0.24 -0.06
insura…
recove…
Transa… 73 39 0.12 0.06
costs
ERP
asset - — 102 — 0.16
accele…
deprec…
Transf… 292 180 0.48 0.28
costs
Discre…
tax -79 -36 -0.13 -0.06
items
Related
tax -32 -57 -0.05 -0.07
impact
Adjust… $ 3,153 $ 2,462 $ 5.16 $ 3.76
(non-G…
* 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 Twelve
Months Months
Ended Ended
Septe… Septe…
30, 30,
2026 2025 2026 2025
Weig…
aver…
shar…
outs…
Basic
weig…
aver… 604 631 609 652
shar…
outs…
Effe…
of
dilu…
secu…
Stock
opti…
unve…
rest…
stock 2 2 2 2
and
unve…
perf…
share
awar…
Dilu…
weig…
aver… 606 633 611 654
shar…
outs…
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):
June
(in Septemb… 30, Septemb…
millio… 30, 2026 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Short-… $ 678 $ 865 $ 723
debt
Current
portion
of 1,066 311 566
long-t…
debt
Long-t… 7,533 8,299 8,591
debt
Total 9,277 9,475 9,880
debt
Less:
cash
and 618 641 379
cash
equiva…
Net $ 8,659 $ 8,834 $ 9,501
debt
Last
twelve
months
income $ 3,426 $ 2,718 $ 1,969
before
income
taxes
Net
debt to
income 2.5 x 3.3 x 4.8 x
before
income
taxes
Last
twelve
months $ 4,743 $ 4,553 $ 3,987
adjust…
EBITDA
(non-G…
Net
debt to
adjust… 1.8x 1.9x 2.4x
EBITDA
(non-G…
20
The following table reconciles income from continuing operations to adjusted
EBIT and adjusted EBITDA (unaudited):
Twelve
(in Months September June 30, September
millions) Ended 30, 2026 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Income
from $ 2,890 $ 2,190 $ 1,724
continu…
operati…
Income
tax 536 528 245
provisi…
Income
before 3,426 2,718 1,969
income
taxes
Net
financi… 279 273 319
charges
EBIT 3,705 2,991 2,288
Adjusti…
items:
Net
mark-to… -73 -3 6
adjustm…
Restruc…
and 311 624 546
impairm…
costs
Water
systems
AFFF -149 -174 -39
insuran…
recover…
Transac… 73 55 39
costs
Transfo… 292 253 180
costs
ERP
asset - — 102 102
acceler…
depreci…
Gain on -70 -70 —
divesti…
Adjusted
EBIT 4,089 3,778 3,122
(non-GA…
Depreci…
and 654 775 865
amortiz…
Adjusted
EBITDA $ 4,743 $ 4,553 $ 3,987
(non-GA…
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