Johnson Controls International plc Ordinary Share
JCI · NYSE
Next quarter
Expected to report Feb 3, 2027 — estimated from last year’s reporting date.
Consensus is $1.19 EPS for Dec 2026 across 3 estimates, ranging $1.18 to $1.20.
JCI Sep 2026
- 5.06%
- $1.58
- $1.66
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Highlights
- Revenue and EPS: Q4 sales rose 10% year over year to $7.11 billion, with organic growth of 12%; adjusted EPS of $1.66 beat the $1.58 consensus by 5.1%, while GAAP EPS was $1.60.
- Demand: Organic orders increased 44% and backlog rose 43% to a record $23.0 billion, led by data centers and other mission-critical markets.
- Margins: Adjusted EBIT margin expanded 300 basis points year over year to 18.3%, as higher volumes, favorable mix, productivity and lower corporate costs supported operating leverage.
- Regional growth: Americas organic sales rose 14% and APAC rose 13%; EMEA organic sales grew 3% despite reported sales declining 2% amid Middle East conflict.
- Cash generation: Q4 operating cash flow was $1.30 billion and adjusted free cash flow was $1.10 billion; full-year adjusted free cash flow was $3.23 billion, or 103% conversion.
- FY27 outlook: Management guided to 11%–12% organic sales growth, operating leverage above 30%, adjusted EPS of $6.15–$6.30 and adjusted free cash flow conversion of about 95%.
- Capacity and simplification: JCI expects about $900 million of FY27 capital expenditure and approximately $400 million of restructuring expense over FY27–FY28, targeting $600 million in gross annualized savings by FY29.
Analysis
Johnson Controls closed FY26 with a strong, demand-led quarter: Q4 sales of $7.11 billion were up 10% year over year and 12% organically, while adjusted EPS of $1.66 exceeded the $1.58 consensus by 5.1%. GAAP EPS was $1.60, compared with $0.42 a year earlier; continuing-operations income attributable to JCI was $967 million versus $267 million. Against Q2 FY26, sales advanced from $6.14 billion and diluted EPS from $1.00, though that sequential comparison also reflects Q4 seasonality. The prior-year quarter included discontinued-operation earnings, so continuing-operations figures give the more relevant earnings comparison.
The print was defined by accelerating demand, margin expansion and investment plans to address capacity. Organic orders surged 44%, taking backlog to a record $23.0 billion, up 43%; data centers led, alongside other mission-critical end markets. Adjusted EBIT margin increased 300 basis points to 18.3%, with growth and productivity outweighing a less favorable service mix and inflation that management said modestly diluted margin despite positive price-cost. For FY26, organic revenue grew more than 8%, adjusted EPS rose 37% and adjusted free cash flow conversion reached 103%. Management’s initial FY27 outlook calls for 11%–12% organic growth and adjusted EPS of $6.15–$6.30, with roughly $900 million of planned capital expenditure to expand capacity.
Orders and data centers
- Record demand: Organic orders grew 44% year over year in Q4, following strong order entry in the prior quarter; backlog reached $23.0 billion, up 43% organically.
- Americas concentration: Americas orders rose 58% and backlog increased 54% to $17.8 billion, supported by data-center demand. EMEA orders advanced 12% with backlog up 18% to $3.1 billion; APAC orders gained 11% and backlog 12% to $2.1 billion.
- Broader thermal offering: Chillers remain the largest data-center product, while CDUs, cold plates and modular data centers are widening JCI’s opportunity per megawatt. Management cited a pipeline exceeding $1 billion for CDU and cold-plate opportunities, with only a small portion converted to firm orders so far.
- Conversion and constraints: Management expects 70%–80% of backlog to convert to revenue over the next 12 months. It described demand as the main opportunity rather than the constraint, while customer power and electrical-infrastructure limitations can affect delivery timing.
Growth and margins
- Top-line mix: Q4 organic sales increased 12%, led by 15% growth in products and systems; services grew 8%. Management attributed the systems strength to data centers and other mission-critical applications.
- Americas: Sales of $4.93 billion rose 14% organically. Adjusted Segment EBITA margin expanded 210 basis points to 22.0%, reflecting operating leverage and favorable mix.
- EMEA: Reported sales declined 2% to $1.31 billion, but organic sales increased 3%; Middle East conflicts continued to weigh on the region. Adjusted Segment EBITA margin improved 80 basis points to 16.4%, aided by pricing and productivity.
- APAC: Sales rose 12% to $871 million and organic sales grew 13%, including 15% organic growth in products and systems. Adjusted Segment EBITA margin expanded 110 basis points to 18.9%.
- Enterprise profitability: Adjusted EBIT was $1.30 billion, up from $988 million a year earlier, and adjusted EBIT margin rose to 18.3% from 15.3%. Higher revenue, productivity and favorable mix contributed; management said price-cost remained positive, though inflation made incremental pricing somewhat margin-dilutive.
FY27 investment and guidance
- Full-year targets: JCI initiated FY27 guidance for 11%–12% organic sales growth, operating leverage above 30% and adjusted EPS of $6.15–$6.30. At the midpoint, the EPS range implies about 21% growth from FY26.
- First-quarter outlook: Management expects 12%–14% organic sales growth, 30%–35% operating leverage and adjusted EPS of $1.15–$1.20.
- Capacity investment: Planned FY27 capital expenditure is about $900 million, spanning manufacturing, innovation, digital and AI-enabled field productivity. Management said process improvements allow capacity to be added with substantially less capital than otherwise required and expects the investment to support continued double-digit demand in key markets.
- Restructuring: The new program is expected to incur about $400 million of expense across FY27 and FY28 and deliver approximately $600 million of gross annualized savings by FY29. Management said actions will focus mainly on less differentiated parts of the portfolio, including manufacturing, logistics and supporting functions.
Cash and capital allocation
- Quarterly cash flow: Continuing-operations operating cash flow was $1.30 billion, compared with $968 million in Q4 FY25; free cash flow was $1.08 billion and adjusted free cash flow was $1.10 billion.
- Full-year conversion: FY26 adjusted free cash flow reached $3.23 billion, with adjusted free cash flow conversion of 103%. FY27 guidance calls for conversion of approximately 95% as investment increases.
- Balance sheet and returns: Net debt was $8.66 billion at year-end and net debt to adjusted EBITDA was 1.8x, down from 2.4x a year earlier. JCI returned $2.5 billion to shareholders during FY26 through repurchases and dividends; Q4 dividends were $242 million.
