[Q3 2025 Earnings Release](index=1&type=section&id=Q3%202025%20Earnings%20Release) Johnson Controls reports strong Q3 2025 results with increased sales, robust backlog, and raised full-year guidance [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Johnson Controls reported **$6.1 billion** sales with **6% organic growth**, **$0.94** GAAP EPS, and a record **$14.6 billion** Systems and Services backlog Q3 2025 Key Financial Metrics | Metric | Q3 2025 Value | YoY Change (as reported) | YoY Change (organic) | | :--- | :--- | :--- | :--- | | Sales | $6.1B | +3% | +6% | | GAAP EPS | $0.94 | - | - | | Adjusted EPS | $1.05 | - | - | | Orders | - | - | +2% | | Systems & Services Backlog | $14.6B | - | +11% | - CEO Joakim Weidemanis highlighted the company's 140-year history, attributing strong results to customer prioritization, employee empowerment, and R&D investment, emphasizing a new business system for accelerated performance and long-term shareholder value[3](index=3&type=chunk) [Segment Performance](index=2&type=section&id=FISCAL%20Q3%20SEGMENT%20RESULTS) Americas and APAC segments led organic growth, with mixed margins reflecting productivity and regional adjustments [Americas](index=2&type=section&id=Americas) Americas sales were flat reported but **7% organic growth** to **$4.0 billion**, with GAAP EBITA margin down and adjusted margin up Americas Q3 Performance (vs. Q3 2024) | Metric | Q3 2025 (million) | Q3 2024 (million) | Change | | :--- | :--- | :--- | :--- | | Sales | $4,042 | $4,035 | 0% | | GAAP Segment EBITA | $742 | $804 | -8% | | Adjusted Segment EBITA | $746 | $743 | 0% | | GAAP Segment EBITA Margin | 18.4% | 19.9% | -150 bp | | Adjusted Segment EBITA Margin | 18.5% | 18.4% | +10 bp | - Organic orders increased by **5%** year-over-year, and the backlog grew by **10%** to **$10.3 billion**, indicating continued demand in the region[7](index=7&type=chunk) [EMEA (Europe, Middle East, Africa)](index=2&type=section&id=EMEA%20(Europe%2C%20Middle%20East%2C%20Africa)) EMEA sales grew **8%** to **$1.3 billion** with **4% organic growth**, driven by Service, expanding GAAP and adjusted EBITA margins EMEA Q3 Performance (vs. Q3 2024) | Metric | Q3 2025 (million) | Q3 2024 (million) | Change | | :--- | :--- | :--- | :--- | | Sales | $1,273 | $1,177 | +8% | | GAAP Segment EBITA | $177 | $154 | +15% | | Adjusted Segment EBITA | $179 | $154 | +16% | | GAAP Segment EBITA Margin | 13.9% | 13.1% | +80 bp | | Adjusted Segment EBITA Margin | 14.1% | 13.1% | +100 bp | - Organic orders saw a modest increase of **2%** year-over-year, while the backlog grew by **9%** to **$2.6 billion**[9](index=9&type=chunk) [APAC (Asia Pacific)](index=3&type=section&id=APAC%20(Asia%20Pacific)) APAC sales increased **7%** to **$737 million** with **6% organic growth** and improved EBITA margin, despite **8% lower** organic orders APAC Q3 Performance (vs. Q3 2024) | Metric | Q3 2025 (million) | Q3 2024 (million) | Change | | :--- | :--- | :--- | :--- | | Sales | $737 | $686 | +7% | | GAAP & Adjusted Segment EBITA | $143 | $128 | +12% | | GAAP & Adjusted Segment EBITA Margin | 19.4% | 18.7% | +70 bp | - While sales and backlog (**$1.7B**, **+14% YoY**) were strong, organic orders declined by **8%** compared to the prior year[11](index=11&type=chunk) [Corporate](index=3&type=section&id=Corporate) GAAP corporate expenses increased **10%** to **$141 million**, while adjusted expenses decreased **22%** to **$93 million** after exclusions Corporate Expense Q3 (vs. Q3 2024) | Metric | Q3 2025 (million) | Q3 2024 (million) | Change | | :--- | :--- | :--- | :--- | | GAAP Corporate Expense | $141 | $128 | +10% | | Adjusted Corporate Expense | $93 | $119 | -22% | [Other Q3 Financial Items](index=3&type=section&id=OTHER%20Q3%20ITEMS) Johnson Controls generated **$787 million** operating cash flow and **$693 million** free cash flow, returning capital via dividends and share repurchases - **Cash Flow**: Generated **$787 million** in cash from operating activities and **$693 million** in free cash flow (**$725 million** adjusted)[13](index=13&type=chunk) - **Dividends**: Paid **$243 million** to shareholders[13](index=13&type=chunk) - **Share Repurchases**: Bought back **3.8 million** shares for **$310 million**[13](index=13&type=chunk) [Fiscal 2025 Guidance](index=4&type=section&id=GUIDANCE) Johnson Controls initiated Q4 2025 guidance, raising full-year adjusted EPS to **$3.65-$3.68** and free cash flow conversion to **>100%** Q4 Fiscal 2025 Guidance | Metric | Guidance | | :--- | :--- | | Organic Sales Growth | Low single digits | | Adjusted Segment EBITA Margin | ~18.6% | | Adjusted EPS | $1.14 to $1.17 | Full Year Fiscal 2025 Guidance (Raised) | Metric | Guidance | Previous Guidance | | :--- | :--- | :--- | | Organic Sales Growth | Mid-single digits | Unchanged | | Adjusted Segment EBITA Margin Improvement | ~90 bps YoY | Unchanged | | Adjusted EPS | $3.65 to $3.68 | ~$3.60 | | Adjusted Free Cash Flow Conversion | >100% | ~100% | [Consolidated Financial Statements](index=8&type=section&id=FINANCIAL%20STATEMENTS) Consolidated financial statements show **3%** net sales growth, stable balance sheet, and significant operating cash flow increase from continuing operations [Consolidated Statements of Income](index=8&type=section&id=Consolidated%20Statements%20of%20Income) Net sales increased to **$6.05 billion**, but income from continuing operations decreased to **$618 million**, resulting in **$0.94** diluted EPS Q3 Income Statement Highlights (in millions, except EPS) | Metric | Three Months Ended June 30, 2025 (million) | Three Months Ended June 30, 2024 (million) | | :--- | :--- | :--- | | Net Sales | $6,052 | $5,898 | | Gross Profit | $2,246 | $2,109 | | Income from continuing operations | $618 | $851 | | Net Income attributable to JCI | $701 | $975 | | Diluted EPS (Continuing ops) | $0.94 | $1.27 | [Condensed Consolidated Statements of Financial Position](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Position) Total assets increased to **$43.4 billion** and liabilities to **$26.3 billion** as of June 30, 2025, with minor equity decrease Balance Sheet Summary (in millions) | Metric | June 30, 2025 (million) | September 30, 2024 (million) | | :--- | :--- | :--- | | Total Assets | $43,393 | $42,695 | | Total Liabilities | $26,348 | $25,334 | | Total Equity | $17,045 | $17,361 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash from operating activities (continuing operations) increased to **$787 million**, with **$637 million** used in financing for repurchases and dividends Q3 Cash Flow Highlights (in millions) | Metric | Three Months Ended June 30, 2025 (million) | Three Months Ended June 30, 2024 (million) | | :--- | :--- | :--- | | Cash from Operating Activities (Continuing ops) | $787 | $653 | | Cash used by Investing Activities (Continuing ops) | ($85) | ($90) | | Cash used by Financing Activities (Continuing ops) | ($637) | ($930) | [Footnotes and Non-GAAP Reconciliations](index=11&type=section&id=FOOTNOTES) Footnotes clarify financial reporting basis, discontinued operations, and provide non-GAAP reconciliations, outlining key adjustments from GAAP - The company uses non-GAAP measures like organic sales (excluding M&A and currency impacts) and adjusted free cash flow to help investors understand underlying business trends and cash generation capabilities[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - Significant items excluded from GAAP results to arrive at adjusted figures include: - Restructuring and impairment costs - Transaction/separation costs - Transformation costs - Earn-out adjustments - Water systems AFFF settlement and insurance recoveries - Net mark-to-market adjustments[36](index=36&type=chunk)[38](index=38&type=chunk) - The sale of the Residential and Light Commercial (R&LC) HVAC business is treated as a discontinued operation, with its historical financial results removed from continuing operations and its assets/liabilities classified as held for sale[30](index=30&type=chunk)

Core Viewpoint - Johnson Controls International plc reported strong fiscal third quarter 2025 results, with a notable increase in sales and adjusted earnings per share, reflecting the company's focus on innovation and customer commitment [2][3][7]. Financial Performance - The company achieved GAAP earnings per share (EPS) of $0.94 and adjusted EPS of $1.05 for the third quarter [2]. - Total sales for the quarter reached $6.1 billion, marking a 3% increase year-over-year, with organic sales growth of 6% [2][7]. - GAAP income from continuing operations was $618 million, while adjusted income from continuing operations was $693 million [2]. Segment Results - **Americas**: Sales remained flat at $4.0 billion, with organic sales increasing by 7%. GAAP segment EBITA was $742 million, down 8% year-over-year [5][6]. - **EMEA**: Sales increased by 8% to $1.3 billion, with a 15% rise in GAAP segment EBITA [8][9]. - **APAC**: Sales grew by 7% to $737 million, with a 12% increase in GAAP segment EBITA [9][10]. Orders and Backlog - Excluding M&A and adjusted for foreign currency, orders increased by 5% year-over-year, and the backlog reached $10.3 billion, up 10% year-over-year [6][7]. Cash Flow and Shareholder Returns - Cash provided by operating activities was $787 million, with free cash flow of $693 million and adjusted free cash flow of $725 million [12][39]. - The company paid dividends totaling $243 million and repurchased 3.8 million shares for $310 million [12]. Guidance - The company raised its full-year fiscal 2025 guidance, projecting organic sales growth of mid-single digits and adjusted EPS of $3.65 to $3.68 [19][14].

In its upcoming report, Johnson Controls (JCI) is predicted by Wall Street analysts to post quarterly earnings of $1.00 per share, reflecting a decline of 12.3% compared to the same period last year. Revenues are forecasted to be $5.99 billion, representing a year-over-year decrease of 17.2%.Over the last 30 days, there has been a downward revision of 1.1% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration of their in ...

Group 1 - Johnson Controls has appointed Chris Scalia as executive vice president and chief human resources officer (CHRO) to enhance the company's growth strategy [1][2] - Scalia brings over 20 years of experience from The Hershey Company, where he held dual roles as CHRO and Chief Transformation Officer, leading significant transformations and portfolio evolution [2][4] - CEO Joakim Weidemanis emphasized Scalia's expertise in people and culture strategy, operational excellence, and team building as essential for transforming Johnson Controls into a customer-centric organization [3] Group 2 - Scalia's career includes extensive experience in labor relations and management employment law, with a strong focus on change management across various operational areas [4] - He holds an Executive Master's degree in Human Resources from Cornell University, a Juris Doctorate from Penn State, and a Bachelor of Arts from Juniata College, showcasing a solid educational background [4] - Johnson Controls aims to leverage Scalia's leadership to create a world-class employee experience and attract top talent, which is critical for the company's competitive edge [3]

Group 1 - The core viewpoint is that Johnson Controls International plc is positioned for strong revenue growth and margin expansion, supported by a record backlog of $14 billion and robust order momentum, particularly in high-growth sectors like data centers [1] - The company is experiencing strong order momentum, indicating a positive outlook for future performance [1] - The focus on faster-growing areas such as data centers suggests a strategic alignment with market trends that could enhance profitability [1] Group 2 - The company has a significant backlog, which is a positive indicator of future revenue generation [1] - The emphasis on medium-term investing strategies highlights the potential for unlocking value through catalysts in the market [1] - The analyst's experience in industrial, consumer, and technology sectors suggests a well-rounded understanding of the market dynamics affecting Johnson Controls [1]

Core Insights - Johnson Controls International plc is a global leader in smart, healthy, and sustainable buildings, focusing on transforming environments for various sectors [1][2] - The company will hold its Third Quarter Fiscal 2025 Earnings Conference Call on July 29, 2025, at 8:30 a.m. ET, which will be accessible via webcast and telephone [1][3] Company Overview - Johnson Controls has a proud history of 140 years of innovation, delivering future blueprints for industries such as healthcare, schools, data centers, airports, stadiums, and manufacturing through its OpenBlue digital offering [2] - The company offers the world's largest portfolio of building technology and software, along with service solutions from trusted industry names [2]

Core Viewpoint - Johnson Controls International plc (JCI) has announced a $9 billion share buyback program, reflecting its commitment to rewarding shareholders [1][2]. Share Buyback Program - The board of directors has authorized the repurchase of $9 billion worth of shares, which can be executed in the open market or through various methods, including Rule 10b-5-1 trading plans, with no expiration date [2][9]. - JCI currently has an existing share repurchase program from 2021, with $1.1 billion remaining as of the end of the second quarter of fiscal 2025 [3][9]. Financial Performance - In the first half of fiscal 2025, JCI repurchased 8.2 million shares for $660 million and paid out $489 million in dividends [4][9]. - The company has a market capitalization of $69 billion and holds a Zacks Rank of 3 (Hold) [5]. Market Position and Growth - JCI has experienced a 24.6% increase in share price over the past six months, significantly outperforming the industry growth of 1.5% [7]. - The Building Solutions North America segment is showing solid momentum, driven by increased demand for the HVAC platform and investments in digital offerings like the OpenBlue platform [5]. Challenges - Rising selling, general and administrative (SG&A) expenses due to higher transformation and transaction costs may impact profitability [7]. - High debt levels could increase financial obligations for the company [7].

Core Viewpoint - Johnson Controls International plc has approved a $9 billion share repurchase authorization, which adds to the existing $1.1 billion remaining from a previous authorization [1][2]. Company Overview - Johnson Controls is a global leader in smart, healthy, and sustainable buildings, focusing on transforming environments for living, working, learning, and playing [3][4]. - The company has a history of nearly 140 years of innovation and offers a comprehensive digital offering called OpenBlue, which serves various industries including healthcare, schools, data centers, and manufacturing [4]. Share Repurchase Details - The share repurchase may be executed through various methods such as open market purchases, Rule 10b5-1 plans, tender offers, or accelerated share repurchase programs [2]. - There is no obligation to repurchase a specific amount of shares within a set timeframe, and the timing and amount will depend on market conditions and share price evaluations [2]. - The share repurchase authorization does not have a set expiration date and can be amended or terminated at the company's discretion [2].

Core Insights - Johnson Controls' heat pumps significantly reduce heating costs and emissions, achieving a 53% reduction in customer heating expenses and a 60% decrease in emissions compared to traditional natural gas boilers in 2024 [1][2] Group 1: Customer Benefits - The heat pumps provide a competitive advantage across various sectors, including industrial, healthcare, and municipal organizations, by ensuring uptime and reliability while conserving cash for growth [2] - Specific case studies highlight substantial savings and emissions reductions, such as a food company in Spain saving €1.5 million annually and reducing CO2 emissions by nearly 2,000 tons [3] - A hospital in Germany achieved a 30% reduction in energy costs and met 80% of its heating demand through a heat pump utilizing geothermal energy [3] Group 2: Industry Potential - The European Heat Pump Association estimates that over 60% of energy used by European industries is for heating, indicating a significant market for heat pumps [2] - The American Council for an Energy-Efficient Economy projects that heat pumps could replace up to 80% of industrial boilers in the U.S. by 2050, underscoring their potential for enhancing energy security and sustainability [2] Group 3: Product Innovations - Johnson Controls offers a comprehensive portfolio of heat pumps, including the 400-ton YORK® CYK Water-to-Water Compound Centrifugal Heat Pump, which is four times more efficient than traditional systems [5] - New products launched in Asia, such as the YORK® HPS-H 200 and YORK Next-Generation YSPA-V, provide energy-saving and low-carbon solutions tailored for various industries [5] Group 4: Commitment to Sustainability - Johnson Controls is leading the transition to sustainable refrigerants, offering heat pumps that utilize low and ultra-low global warming potential fluids [4] - The company emphasizes its role in accelerating climate action through partnerships with customers to achieve significant environmental benefits [2]

Summary of Johnson Controls International (JCI) FY Conference Company Overview - **Company**: Johnson Controls International (JCI) - **Event**: FY Conference held on May 21, 2025 Key Industry Insights - **Market Demand**: There is no significant decline in demand observed, with indications of stable pricing despite tariff pullbacks in China [2][3] - **Stock Performance**: JCI is among the top-performing stocks year-to-date, alongside GivaNova and 3M, highlighting the effectiveness of self-help strategies in the multi-industrial sector [4] Core Company Insights - **Leadership Transition**: The new CEO, Jochen Weidermannus, emphasizes the importance of customer and competitor orientation over internal focus, aiming to enhance operational efficiency [15][18] - **Technological Capabilities**: JCI possesses unique skills in HVAC product lines, particularly in high-performance chillers, which are seen as a competitive advantage [19][20] - **Customer Orientation**: The company aims to optimize internal processes to free up time for field teams, enhancing their capacity to serve customers effectively [18] Pricing Strategy - **Solutions Pricing**: The pricing dynamics in the Solutions business are complex, but JCI is improving its pricing processes to command better prices and sell more value [33][34] - **Market Focus**: JCI is shifting its commercial teams to focus on more attractive market segments, which allows for better pricing on differentiated products [34][35] Organizational Changes - **Reorganization**: JCI is moving from four segments to three, aiming for a more streamlined and efficient decision-making process that enhances customer experience [37][39] - **Holistic Market Approach**: The new structure encourages teams to view the market comprehensively, leading to better alignment with customer buying journeys [40][41] Installation and Labor Optimization - **Installation Practices**: JCI is evaluating its installation practices to determine their impact on win rates and margins, with a focus on optimizing where installation is necessary [47][50] - **Gross Margins**: JCI's gross margins are reportedly better than many peers, and the company is exploring ways to further enhance margins through operational efficiencies [52][77] Market Outlook - **Pipeline Health**: The company maintains a healthy pipeline and does not foresee significant softness in the market for the remainder of 2025, despite macroeconomic concerns [67][70] - **Vertical Market Performance**: Key verticals such as data centers, manufacturing, and healthcare are performing well, while Class A commercial real estate remains a strong market [70] Margin Improvement Strategies - **Lean Principles**: JCI plans to apply lean principles across its factories and field operations to eliminate waste and improve efficiency, which is expected to enhance margins over time [76][78] - **Long-term Goals**: The CEO expresses confidence in JCI's ability to catch up to competitors in terms of margins, with a focus on continuous improvement and strategic capital allocation [77][78] Conclusion - JCI is positioned to leverage its technological strengths and operational efficiencies to enhance customer service and improve financial performance. The company is actively working on strategic initiatives to optimize pricing, streamline operations, and focus on high-growth verticals, setting a positive outlook for future growth and profitability.