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Johnson Controls Q4 Earnings & Revenues Top Estimates, Increase Y/Y

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Key Takeaways

  • Revenues of $6.44 billion, up 3% YoY, exceeding expectations; organic growth 4%.
  • Gross margin improved 20 bps to 36.5%; EBITA growth led by Americas and EMEA.
  • It reported fiscal 2025 adjusted free cash flow of $2.12B, nearly double YoY; share repurchased worth $5.99B.

Johnson Controls International plc (JCI - Free Report) reported fourth-quarter fiscal 2025 (ended September 2025) adjusted earnings of $1.26 per share, which beat the Zacks Consensus Estimate of $1.20. The bottom line increased 13.5% year over year.

Total revenues (continuing operations) of $6.44 billion surpassed the consensus estimate of $6.32 billion in the quarter. The top line increased 3% year over year, whereas organic revenues increased 4%.

For fiscal 2025, the company’s adjusted earnings were $3.76 per share, up 17.1% year over year. Total revenues of $23.6 billion reflected an increase of 2.8% year over year.

Q4 Segmental Results

Effective from the third quarter of fiscal 2025, the company started reporting under three segments, namely Americas, EMEA and APAC.

Americas: Revenues were $4.33 billion, up 1% year over year. Organic sales increased 3%, driven by the strong performance of the applied heating, ventilation and air conditioning (HVAC) and controls businesses.  Adjusted EBITA increased 4% year over year to $862 million. Our estimate for segmental revenues was pinned at $4.27 billion.

EMEA: Revenues totaled $1.34 billion, up 13% year over year. Organic sales climbed 9% due to strong growth in systems and service businesses. Adjusted EBITA was $208 million, up 15% year over year. Our estimate for segmental revenues was pegged at $1.30 billion.

APAC: Revenues decreased 3% to $780 million. Sales declined 3% organically, due to decreased volumes in China. Adjusted EBITA was $139 million, down 12% year over year. Our estimate for segmental revenues was pinned at $785 million.

JCI’s Margin Profile

In the fiscal fourth quarter, Johnson Controls’ cost of sales increased 2.8% year over year to approximately $4.09 billion. Gross profit increased 3.7% year over year to $2.35 billion and the margin rose 20 basis points (bps) to 36.5%. Selling, general and administrative expenses were $1.52 billion, up 11.2% year over year.

Financial Position

Johnson Controls had cash and cash equivalents of $379 million as of Sept. 30, 2025, compared with $606 million at the end of fiscal 2024 (ended Sept. 30, 2024). Long-term debt was $8.59 billion compared with $8 billion at the end of fiscal 2024.

In fiscal 2025, the company generated net cash of $2.55 billion from operating activities compared with $1.57 billion in the year-ago period. It reported a free cash flow (on an adjusted basis) of $2.12 billion in the same period compared with $1.07 billion in the year-ago period.

The company paid dividends of $976 million and repurchased shares for approximately $5.99 billion in fiscal 2025.

JCI’s Q1 Guidance

Johnson Controls anticipates organic revenue growth of approximately 3% from the year-ago level. Operating leverage is estimated to be approximately 55%. JCI expects adjusted earnings to be about $0.83 per share.

FY26 Guidance

Johnson Controls anticipates organic revenue growth to be in the mid-single-digit range from the prior-year level. Operating leverage is expected to be about 50%. JCI expects adjusted earnings per share to be approximately $4.55. It expects adjusted free cash flow conversion of about 100%.

JCI’s Zacks Rank

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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