Core Insights - Johnson Controls International reported a strong start to fiscal 2026, with record orders and significant growth in data centers and life sciences, leading to an increase in full-year adjusted earnings guidance [4][6]. Financial Performance - Organic revenue rose by 6%, with segment margins increasing by 70 basis points to 15.7%. Adjusted EPS was $0.89, reflecting a nearly 40% year-over-year increase and exceeding company guidance [2][6]. - Orders increased nearly 40% year-over-year, following a 16% increase in the prior-year quarter. Revenue grew by 6%, and adjusted EBIT margins expanded by 190 basis points to 12.4% [3][6]. Market Demand - Demand is primarily driven by data centers and life sciences, contributing to a record backlog of $18 billion, which is up 20% year-over-year. However, some large orders may not convert to near-term revenue due to their long-dated nature [5][9]. - By geography, orders in the Americas increased by 56%, driven by large-scale data center projects, while EMEA and APAC saw orders rise by 8% and 10%, respectively [8][7]. Operational Efficiency - The company highlighted execution and capacity gains through Lean and digital business system rollouts, which have tripled physical chiller and air-handling capacity [5][13]. - Management noted that over 1,000 employees have engaged in priority efforts, with significant training and process improvements implemented [12][11]. Guidance and Outlook - For fiscal second quarter, management guided to organic sales growth of approximately 5% and adjusted EPS of approximately $1.11. Full-year adjusted EPS guidance was raised to approximately $4.70, implying about 25% growth [15][16]. - The company maintains expectations for mid-single-digit organic sales growth and operating leverage of approximately 50% for the full year [10][15]. Balance Sheet and Capital Allocation - Johnson Controls ended the quarter with approximately $600 million in available cash, with net debt declining to 2.2x, remaining within the company's long-term target range [17][17]. - Capital allocation priorities include investing in the business, maintaining balance sheet strength, and returning capital to shareholders [17].