Johnson Controls Reports Strong Q3 Results; Raises FY25 Guidance

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    • Q3 sales increased 3% and organic sales increased 6%*
    • Q3 GAAP EPS of $0.94; Q3 Adjusted EPS* of $1.05
    • Q3 orders increased 2% organically year-over-year
    • Systems and Services backlog of $14.6 billion increased 11% organically year-over-year
    • Initiates fiscal Q4 and raises full year fiscal 2025 guidance*

    This news 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, July 29, 2025 /PRNewswire/ -- Johnson Controls International plc (NYSE: JCI), a global leader for smart, safe, healthy and sustainable buildings, today reported fiscal third quarter 2025 GAAP earnings per share ("EPS") of $0.94. Adjusted EPS was $1.05.

    Sales in the quarter of $6.1 billion increased 3% over the prior year on an as reported basis and 6% organically. GAAP income from continuing operations was $618 million. Adjusted income from continuing operations was $693 million.

    "As we celebrate 140 years of innovation and customer commitment, our strong third quarter results and record backlog reflect the momentum we've built and the opportunities ahead," said Joakim Weidemanis, CEO. "By prioritizing our customers, empowering our 40,000 frontline colleagues, and investing in R&D, we are strengthening our capabilities to win – both now and in the future. Looking ahead, we believe implementing the right business system will allow us to accelerate performance, drive consistency, and deliver sustained long-term value for our shareholders."

    FISCAL Q3 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 third quarter of fiscal 2024. Orders and backlog metrics included in the release relate to the Company's Systems and Services based businesses.

    A slide presentation to accompany the results can be found in the Investor Relations section of Johnson Controls' website at investors.johnsoncontrols.com.

    Americas



    Fiscal Q3

    (in millions)


    2025


    2024


    Change

    Sales


    $     4,042


    $     4,035


    — %

    Segment EBITA







    GAAP


    742


    804


    (8 %)

    Adjusted (non-GAAP)


    746


    743


    — %

    Segment EBITA Margin %







    GAAP


    18.4 %


    19.9 %


           (150 bp)

    Adjusted (non-GAAP)


    18.5 %


    18.4 %


              10 bp

    Sales in the quarter of $4.0 billion remained flat over the prior year. Organic sales increased 7% over the prior year, led by continued strength across Applied HVAC and Controls.

    Excluding M&A and adjusted for foreign currency, orders increased 5% year-over-year and backlog of $10.3 billion increased 10% year-over-year.

    Segment EBITA margin of 18.4% declined 150 basis points versus the prior year due to the impact of divestitures and prior year earn-out adjustments. Adjusted segment EBITA in Q3 2025 excludes transformation costs. Adjusted segment EBITA in Q3 2024 excludes earn-out adjustments.

    EMEA (Europe, Middle East, Africa)



    Fiscal Q3

    (in millions)


    2025


    2024


    Change

    Sales


    $     1,273


    $     1,177


    8 %

    Segment EBITA







    GAAP


    177


    154


    15 %

    Adjusted (non-GAAP)


    179


    154


    16 %

    Segment EBITA Margin %







    GAAP


    13.9 %


    13.1 %


              80 bp

    Adjusted (non-GAAP)


    14.1 %


    13.1 %


            100 bp

    Sales in the quarter of $1.3 billion increased 8% over the prior year. Organic sales grew 4% versus the prior year quarter led by 8% growth in Service, including solid growth in Applied HVAC and Fire and Security sales.

    Excluding M&A and adjusted for foreign currency, orders increased 2% year-over-year and backlog of $2.6 billion increased 9% year-over-year. 

    Segment EBITA margin of 13.9% expanded 80 basis points versus the prior year driven by productivity improvements and positive mix from growth in Service. Adjusted segment EBITA in Q3 2025 excludes transformation costs.

    APAC (Asia Pacific)



    Fiscal Q3

    (in millions)


    2025


    2024


    Change

    Sales


    $        737


    $        686


    7 %

    Segment EBITA







    GAAP


    143


    128


    12 %

    Adjusted (non-GAAP)


    143


    128


    12 %

    Segment EBITA Margin %







    GAAP


    19.4 %


    18.7 %


              70 bp

    Adjusted (non-GAAP)


    19.4 %


    18.7 %


              70 bp

    Sales in the quarter of $737 million increased 7% versus the prior year. Organic sales increased 6% versus the prior year led by strong double-digit growth from the Service business.

    Excluding M&A and adjusted for foreign currency, orders decreased 8% and backlog of $1.7 billion increased 14% year-over-year.

    Segment EBITA margin of 19.4% increased 70 basis points versus the prior year driven by productivity improvements.

    Corporate



    Fiscal Q3

    (in millions)


    2025


    2024


    Change

    Corporate Expense







    GAAP


    $           141


    $           128


    10 %

    Adjusted (non-GAAP)


    93


    119


    (22 %)

    Adjusted Corporate expense in Q3 2025 excludes certain transaction/separation costs and transformation costs. Adjusted Corporate expense in Q3 2024 excludes certain transaction/separation costs.

    OTHER Q3 ITEMS

    • Cash provided by operating activities was $787 million. Free cash flow was $693 million and adjusted free cash flow was $725 million.
    • The Company paid dividends of $243 million.
    • The Company repurchased 3.8 million shares of common stock for $310 million.

    GUIDANCE

    The following forward-looking statements regarding organic sales growth, adjusted segment EBITA margin, adjusted segment EBITA margin improvement, adjusted EPS and adjusted free cash flow conversion are non-GAAP financial measures and are presented on a continuing operations basis excluding the Residential and Light Commercial HVAC business, which was classified as discontinued operations beginning in the fiscal fourth quarter of 2024. 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 2025 fourth quarter and full year GAAP financial results from continuing operations.

    The Company initiated fiscal 2025 fourth quarter guidance:

    • Organic sales growth of low single digits
    • Adjusted segment EBITA margin of ~18.6%
    • Adjusted EPS before special items of $1.14 to $1.17

    The Company raised fiscal 2025 full year guidance:

    • Organic sales growth of mid-single digits (unchanged)
    • Adjusted segment EBITA margin improvement of ~90 basis points year-over-year (unchanged)
    • Adjusted EPS before special items of $3.65 to $3.68 (previously ~$3.60)
    • Adjusted free cash flow conversion of >100% (previously ~100%)

    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 by dialing 855-979-6654 (in the United States) or +1-646-233-4753 (outside the United States) along with passcode 330296, or via webcast. A slide presentation will accompany the prepared remarks and has been posted on the investor relations section of the Johnson Controls website at 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

    At Johnson Controls (NYSE:JCI), we transform the environments where people live, work, learn and play. As the global leader in smart, healthy and sustainable buildings, our mission is to reimagine the performance of buildings to serve people, places and the planet.  

    Building on a proud history of nearly 140 years of innovation, we deliver the blueprint of the future for industries such as healthcare, schools, data centers, airports, stadiums, manufacturing and beyond through OpenBlue, our comprehensive digital offering.

    Today, Johnson Controls offers the world`s largest portfolio of building technology and software as well as service solutions from some of the most trusted names in the industry.

    Visit johnsoncontrols.com for more information and follow @Johnsoncontrols on social platforms.

    JOHNSON CONTROLS CONTACTS:

    INVESTOR CONTACTS:

    MEDIA CONTACT:



    Jim Lucas

    Danielle Canzanella

    Direct: +1 414.340.1752

    Direct: +1 203.499.8297

    Email: jim.lucas@jci.com

    Email: danielle.canzanella@jci.com



    Michael Gates


    Direct: +1 414.524.5785


    Email: michael.j.gates@jci.com 


    JOHNSON CONTROLS INTERNATIONAL PLC CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

    Johnson Controls International plc has made statements in this communication 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 communication, statements regarding Johnson Controls' 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. Johnson Controls cautions that these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond its control, that could cause its actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to: Johnson Controls' 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; the ability of Johnson Controls to manage general economic, business and capital market conditions, including the impacts of trade restrictions, recessions, economic downturns and global price inflation; Johnson Controls' ability to develop or acquire new products and technologies that achieve market acceptance and meet applicable quality and regulatory requirements; the ability of Johnson Controls to execute on its operating model and drive organizational improvement; Johnson Controls' 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; 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 Johnson Controls' customers; the ability to manage disruptions caused by international conflicts, including Russia and Ukraine and the ongoing conflicts in the Middle East; 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 Johnson Controls' enterprise information technology infrastructure; the ability to manage the lifecycle cybersecurity risk in the development, deployment and operation of Johnson Controls' 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 Johnson Controls' business operations or tax status; the ability to adapt to global climate change, climate change regulation and successfully meet Johnson Controls' public sustainability commitments; the outcome of litigation and governmental proceedings; the risk of infringement or expiration of intellectual property rights; Johnson Controls' 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 Johnson Controls 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" in Johnson Controls Annual Report on Form 10-K for the year ended September 30, 2024 filed with the SEC on November 19, 2024, which is available at www.sec.gov and www.johnsoncontrols.com under the "Investors" tab. The description of certain of these risks is supplemented in Item 1A of Part II of Johnson Controls subsequently filed Quarterly Reports on Form 10-Q. Shareholders, potential investors and others should consider these factors in evaluating the forward-looking statements and should not place undue reliance on such statements. The forward-looking statements included in this communication 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 communication.

    FINANCIAL STATEMENTS


    Johnson Controls International plc

    Consolidated Statements of Income

    (in millions, except per share data; unaudited)



    Three Months Ended

    June 30,


    Nine Months Ended

    June 30,


    2025


    2024


    2025


    2024

    Net sales








    Products and systems

    $     4,122


    $     4,089


    $   11,672


    $   11,576

    Services

    1,930


    1,809


    5,482


    5,128


    6,052


    5,898


    17,154


    16,704

    Cost of sales








    Products and systems

    2,656


    2,698


    7,635


    7,805

    Services

    1,150


    1,091


    3,278


    3,090


    3,806


    3,789


    10,913


    10,895









    Gross profit

    2,246


    2,109


    6,241


    5,809









    Selling, general and administrative expenses

    1,417


    895


    4,243


    4,293

    Restructuring and impairment costs

    51


    103


    146


    377

    Net financing charges

    77


    70


    243


    246

    Equity income (loss)

    4


    (16)


    5


    (19)









    Income from continuing operations before income taxes

    705


    1,025


    1,614


    874









    Income tax provision

    87


    174


    160


    1









    Income from continuing operations

    618


    851


    1,454


    873









    Income from discontinued operations, net of tax

    160


    201


    301


    349









    Net income

    778


    1,052


    1,755


    1,222









    Income (loss) attributable to noncontrolling interests








    Continuing operations


    (1)



    2

    Discontinued operations

    77


    78


    157


    148









    Net income attributable to Johnson Controls

    $        701


    $        975


    $     1,598


    $     1,072









    Income attributable to Johnson Controls








    Continuing operations

    $        618


    $        852


    $     1,454


    $        871

    Discontinued operations

    83


    123


    144


    201

    Total

    $        701


    $        975


    $     1,598


    $     1,072









    Basic earnings per share attributable to Johnson Controls








    Continuing operations

    $       0.94


    $       1.27


    $       2.21


    $       1.28

    Discontinued operations

    0.13


    0.18


    0.22


    0.30

    Total

    $       1.07


    $       1.45


    $       2.43


    $       1.58









    Diluted earnings per share attributable to Johnson Controls








    Continuing operations

    $       0.94


    $       1.27


    $       2.20


    $       1.28

    Discontinued operations

    0.13


    0.18


    0.22


    0.30

    Total

    $       1.07


    $       1.45


    $       2.42


    $       1.58

     

    Johnson Controls International plc

    Condensed Consolidated Statements of Financial Position

    (in millions; unaudited)



    June 30, 2025


    September 30, 2024

    Assets








    Cash and cash equivalents

    $                      731


    $                      606

    Accounts receivable - net

    6,151


    6,051

    Inventories

    1,829


    1,774

    Current assets held for sale

    1,993


    1,595

    Other current assets

    1,145


    1,153

    Current assets

    11,849


    11,179





    Property, plant and equipment - net

    2,455


    2,403

    Goodwill

    16,709


    16,725

    Other intangible assets - net

    3,856


    4,130

    Noncurrent assets held for sale

    3,174


    3,210

    Other noncurrent assets

    5,350


    5,048

    Total assets

    $                 43,393


    $                 42,695





    Liabilities and Equity








    Short-term debt

    $                   1,277


    $                      953

    Current portion of long-term debt

    570


    536

    Accounts payable

    3,421


    3,389

    Accrued compensation and benefits

    1,070


    1,048

    Deferred revenue

    2,428


    2,160

    Current liabilities held for sale

    1,662


    1,431

    Other current liabilities

    1,922


    2,438

    Current liabilities

    12,350


    11,955





    Long-term debt

    8,446


    8,004

    Pension and postretirement benefit obligations

    179


    217

    Noncurrent liabilities held for sale

    398


    405

    Other noncurrent liabilities

    4,975


    4,753

    Long-term liabilities

    13,998


    13,379





    Shareholders' equity attributable to Johnson Controls

    15,830


    16,098

    Noncontrolling interests

    1,215


    1,263

    Total equity

    17,045


    17,361

    Total liabilities and equity

    $                 43,393


    $                 42,695

     

    Consolidated Statements of Cash Flows

    (in millions; unaudited)



    Three Months
    Ended June 30,


    Nine Months
    Ended June 30,


    2025


    2024


    2025


    2024

    Operating Activities of Continuing Operations








    Income from continuing operations attributable to Johnson Controls

    $    618


    $    852


    $ 1,454


    $    871

    Income (loss) from continuing operations attributable to noncontrolling interests


    (1)



    2

    Income from continuing operations

    618


    851


    1,454


    873

    Adjustments to reconcile net income to cash provided by operating activities:








    Depreciation and amortization

    190


    201


    585


    624

    Pension and postretirement income and contributions

    (15)


    (18)


    (52)


    (49)

    Deferred income taxes

    (39)


    16


    (146)


    (403)

    Noncash restructuring and impairment charges

    23


    80


    56


    333

    Equity-based compensation

    48


    27


    107


    81

    Other - net

    (24)


    (69)


    8


    (106)

    Changes in assets and liabilities:








    Accounts receivable

    (172)


    18


    (79)


    (491)

    Inventories

    (52)


    (50)


    (79)


    (185)

    Other assets

    (76)


    (370)


    (289)


    (560)

    Restructuring reserves

    5


    (21)


    2


    (81)

    Accounts payable and accrued liabilities

    258


    (23)


    31


    179

    Accrued income taxes

    23


    11


    (12)


    1

    Cash provided by operating activities from continuing operations

    787


    653


    1,586


    216









    Investing Activities of Continuing Operations








    Capital expenditures

    (94)


    (89)


    (304)


    (299)

    Other - net

    9


    (1)


    2


    13

    Cash used by investing activities from continuing operations

    (85)


    (90)


    (302)


    (286)









    Financing Activities of Continuing Operations








    Net proceeds (payments) from borrowings with maturities less than three months

    (75)


    (840)


    283


    703

    Proceeds from debt


    859


    775


    1,281

    Repayments of debt


    (275)


    (502)


    (438)

    Stock repurchases and retirements

    (310)


    (402)


    (970)


    (876)

    Payment of cash dividends

    (243)


    (249)


    (733)


    (753)

    Proceeds from the exercise of stock options

    4


    13


    109


    33

    Employee equity-based compensation withholding taxes

    (2)


    (2)


    (33)


    (26)

    Other - net

    (11)


    (34)


    (40)


    (114)

    Cash used by financing activities from continuing operations

    (637)


    (930)


    (1,111)


    (190)









    Discontinued Operations








    Cash provided by operating activities

    208


    368


    255


    356

    Cash used by investing activities

    (25)


    (9)


    (52)


    (24)

    Cash used by financing activities

    (109)


    (69)


    (174)


    (132)

    Cash provided by discontinued operations

    74


    290


    29


    200

    Effect of exchange rate changes on cash, cash equivalents and restricted cash

    (201)


    10


    (216)


    29

    Change in cash, cash equivalents and restricted cash held for sale


    1


    3


    2

    Decrease in cash, cash equivalents and restricted cash

    (62)


    (66)


    (11)


    (29)

    Cash, cash equivalents and restricted cash at beginning of period

    818


    954


    767


    917

    Cash, cash equivalents and restricted cash at end of period

    756


    888


    756


    888

    Less: Restricted cash

    25


    30


    25


    30

    Cash and cash equivalents at end of period

    $    731


    $    858


    $    731


    $    858

    FOOTNOTES

    1. Sale of Residential and Light Commercial HVAC Business

    The Company signed a definitive agreement in July 2024 to sell its Residential and Light Commercial ("R&LC") HVAC business, which includes the North America Ducted businesses and the global Residential joint venture with Hitachi Global Life Solutions, Inc. ("Hitachi"), of which Johnson Controls owns 60% and Hitachi owns 40%. The R&LC HVAC business, which was previously reported in the Global Products segment prior to the Company's resegmentation, meets 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, and assets and liabilities were reclassified as held for sale for all periods presented. Unless otherwise noted, all activities and amounts reported in the following footnotes include only continuing operations of the Company and exclude activities and amounts related to the R&LC HVAC business.

    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 footnotes three through eight 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.
    • Effective January 1, 2024, the Company has excluded the impact of discontinuing its accounts receivables factoring programs from adjusted free cash flow and adjusted free cash flow conversion. The Company has also re-baselined the prior year adjusted free cash flow measures to present a more comparative measure without the impact of factoring.
    • Cash payments related to the water systems AFFF settlement and cash receipts for AFFF-related insurance recoveries.

    Adjusted financial measures

    Adjusted financial measures include adjusted segment EBITA, adjusted segment EBITA margin, adjusted net income, adjusted earnings per share, adjusted EBIT, adjusted EBITDA and adjusted corporate expenses. These non-GAAP measures 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.

    As detailed in the tables included in footnotes five through eight, 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, net of NCI 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.
    • Earn-out adjustments relate to earn-out liabilities associated with certain significant acquisitions and may have a favorable or unfavorable impact on results.
    • Cyber incident costs primarily represent expenses, net of insurance recoveries, associated with the response to, and remediation of, a cybersecurity incident which occurred in September 2023.
    • Product quality costs are costs related to a product quality issue that is unusual due to the magnitude of the expected cost to remediate in comparison to typical product quality issues experienced by the Company.
    • Loss on divestiture relates to the sale of the ADTi business.
    • EMEA joint venture loss relates to certain non-recurring losses associated with the equity method accounting of a joint venture company.
    • 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, impacts from statutory rate changes, and the recording of significant tax credits.
    • 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.

    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.

    3. Sales

    The following tables detail the changes in sales from continuing operations attributable to organic growth, foreign currency, acquisitions, divestitures and other (unaudited):

    Net sales

    Three Months Ended June 30


    Nine Months Ended June 30

    (in millions)

    Americas


    EMEA


    APAC


    Total


    Americas


    EMEA


    APAC


    Total

    Net sales - 2024

    $ 4,035


    $ 1,177


    $   686


    $ 5,898


    $ 11,341


    $ 3,440


    $ 1,923


    $ 16,704

    Base year adjustments
















    Divestitures and other

    (243)


    (7)



    (250)


    (714)


    (12)



    (726)

    Foreign currency

    (9)


    52


    12


    55


    (40)


    (2)


    (5)


    (47)

    Adjusted base net sales

    3,783


    1,222


    698


    5,703


    10,587


    3,426


    1,918


    15,931

    Acquisitions


    6



    6



    18



    18

    Organic growth

    259


    45


    39


    343


    919


    187


    99


    1,205

    Net sales - 2025

    $ 4,042


    $ 1,273


    $   737


    $ 6,052


    $ 11,506


    $ 3,631


    $ 2,017


    $ 17,154

















    Growth %:
















    Net sales

    — %


    8 %


    7 %


    3 %


    1 %


    6 %


    5 %


    3 %

    Organic growth

    7 %


    4 %


    6 %


    6 %


    9 %


    5 %


    5 %


    8 %

















    Products and systems
    revenue

    Three Months Ended June 30


    Nine Months Ended June 30

    (in millions)

    Americas


    EMEA


    APAC


    Total


    Americas


    EMEA


    APAC


    Total

    Products and systems
    revenue - 2024

    $ 2,887


    $   710


    $   492


    $ 4,089


    $ 8,114


    $ 2,086


    $ 1,376


    $ 11,576

    Base year adjustments
















    Divestitures and other

    (243)


    (7)



    (250)


    (714)


    (12)



    (726)

    Foreign currency

    (8)


    42


    10


    44


    (30)


    18


    (3)


    (15)

    Adjusted products and
    systems revenue

    2,636


    745


    502


    3,883


    7,370


    2,092


    1,373


    10,835

    Acquisitions


    4



    4



    13



    13

    Organic growth

    211


    7


    17


    235


    724


    72


    28


    824

    Products and systems
    revenue -  2025

    $ 2,847


    $   756


    $   519


    $ 4,122


    $ 8,094


    $ 2,177


    $ 1,401


    $ 11,672

















    Growth %:
















    Products and systems
    revenue

    (1) %


    6 %


    5 %


    1 %


    — %


    4 %


    2 %


    1 %

    Organic growth

    8 %


    1 %


    3 %


    6 %


    10 %


    3 %


    2 %


    8 %

















    Service revenue

    Three Months Ended June 30


    Nine Months Ended June 30

    (in millions)

    Americas


    EMEA


    APAC


    Total


    Americas


    EMEA


    APAC


    Total

    Service revenue - 2024

    $ 1,148


    $   467


    $   194


    $ 1,809


    $ 3,227


    $ 1,354


    $   547


    $ 5,128

    Base year adjustments
















    Foreign currency

    (1)


    10


    2


    11


    (10)


    (20)


    (2)


    (32)

    Adjusted base service revenue

    1,147


    477


    196


    1,820


    3,217


    1,334


    545


    5,096

    Acquisitions


    2



    2



    5



    5

    Organic growth

    48


    38


    22


    108


    195


    115


    71


    381

    Service revenue -  2025

    $ 1,195


    $   517


    $   218


    $ 1,930


    $ 3,412


    $ 1,454


    $   616


    $ 5,482

















    Growth %:
















    Service revenue

    4 %


    11 %


    12 %


    7 %


    6 %


    7 %


    13 %


    7 %

    Organic growth

    4 %


    8 %


    11 %


    6 %


    6 %


    9 %


    13 %


    7 %

    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):


    Three Months
    Ended June 30,


    Nine Months
    Ended June 30,

    (in millions)

    2025


    2024


    2025


    2024

    Cash provided by operating activities from continuing operations

    $     787


    $     653


    $  1,586


    $     216

    Income from continuing operations attributable to Johnson Controls

    618


    852


    1,454


    871

    Operating cash flow conversion

    127 %


    77 %


    109 %


    25 %









    Cash provided by operating activities from continuing operations

    787


    653


    1,586


    216

    Capital expenditures

    (94)


    (89)


    (304)


    (299)

    Free cash flow (non-GAAP)

    $     693


    $     564


    $  1,282


    $    (83)









    Income from continuing operations attributable to Johnson Controls

    618


    852


    1,454


    871

    Free cash flow conversion from net income (non-GAAP)

    112 %


    66 %


    88 %


    *









    * Measure not meaningful








    The following table includes adjusted free cash flow and adjusted free cash flow conversion (unaudited):


    Three Months Ended
    June 30,


    Nine Months Ended
    June 30,

    (in millions)

    2025


    2024


    2025


    2024

    Free cash flow (non-GAAP)

    $      693


    $      564


    $   1,282


    $     (83)

    Adjustments:








    JC Capital cash used by operating activities

    34


    50


    111


    170

    Water systems AFFF settlement cash payments and insurance
         recoveries

    (3)


    243


    383


    243

    Impact from discontinuation of factoring programs

    1



    15


    Adjusted free cash flow (non-GAAP)

    725


    857


    1,791


    330

    Prior year impact from factoring programs


    48



    582

    Re-baselined adjusted free cash flow (non-GAAP)

    $      725


    $      905


    $   1,791


    $      912









    Adjusted net income attributable to JCI (non-GAAP)

    $      693


    $      639


    $   1,664


    $   1,425

    JC Capital net income

    (8)


    (3)


    (4)


    (8)

    Adjusted net income attributable to JCI, excluding JC Capital
         (non-GAAP)

    $      685


    $      636


    $   1,660


    $   1,417

    Adjusted free cash flow conversion (non-GAAP)

    106 %


    142 %


    108 %


    64 %

    5. EBITA, EBIT and Corporate Expense

    The Company evaluates the performance of its business units primarily on segment EBITA. The following table includes continuing operations (unaudited):


    Three Months Ended June 30,


    Nine Months Ended June 30,


    Actual


    Adjusted

    (Non-GAAP)


    Actual


    Adjusted

    (Non-GAAP)

    (in millions)

    2025


    2024


    2025


    2024


    2025


    2024


    2025


    2024

















    Segment EBITA
















    Americas

    $   742


    $   804


    $   746


    $   743


    $ 2,038


    $ 1,853


    $ 2,044


    $ 1,811

    EMEA

    177


    154


    179


    154


    448


    397


    450


    401

    APAC

    143


    128


    143


    128


    337


    320


    337


    323

















    EBIT (non-GAAP)
















    Income from continuing operations:
















    Attributable to Johnson Controls

    $   618


    $   852


    $   693


    $   639


    $ 1,454


    $   871


    $ 1,664


    $ 1,425

    Attributable to noncontrolling interests


    (1)



    (1)



    2



    2

    Income from continuing operations

    618


    851


    693


    638


    1,454


    873


    1,664


    1,427

    Less: Income tax provision  (1)

    87


    174


    95


    82


    160


    1


    227


    187

    Income before income taxes

    705


    1,025


    788


    720


    1,614


    874


    1,891


    1,614

    Net financing charges

    77


    70


    77


    70


    243


    246


    243


    246

                   EBIT (non-GAAP)

    $   782


    $ 1,095


    $   865


    $   790


    $ 1,857


    $ 1,120


    $ 2,134


    $ 1,860


    (1) Adjusted income tax provision excludes the related tax impacts of pre-tax adjusting items.

    The following tables include the reconciliations of segment EBITA as reported to adjusted segment EBITA and adjusted segment EBITA margin (unaudited):


    Three Months Ended June 30,

    (in millions)

    Americas


    EMEA


    APAC


    2025


    2024


    2025


    2024


    2025


    2024













    Sales

    $ 4,042


    $ 4,035


    $ 1,273


    $ 1,177


    $  737


    $ 686













    Segment EBITA

    $  742


    $  804


    $  177


    $  154


    $  143


    $ 128













    Adjusting items:












    Transformation costs

    4



    2




    Earn-out adjustments


    (61)

















    Adjusted segment EBITA (non-GAAP)

    $  746


    $  743


    $  179


    $  154


    $  143


    $ 128













    Segment EBITA Margin %

    18.4 %


    19.9 %


    13.9 %


    13.1 %


    19.4 %


    18.7 %

    Adjusted segment EBITA Margin % (non-GAAP)

    18.5 %


    18.4 %


    14.1 %


    13.1 %


    19.4 %


    18.7 %

     


    Nine Months Ended June 30,

    (in millions)

    Americas


    EMEA


    APAC


    2025


    2024


    2025


    2024


    2025


    2024













    Sales

    $ 11,506


    $ 11,341


    $ 3,631


    $ 3,440


    $ 2,017


    $ 1,923













    Segment EBITA

    $ 2,038


    $ 1,853


    $  448


    $  397


    $  337


    $  320













    Adjusting items:












    Transformation costs

    6



    2




    Earn-out adjustments


    (68)





    Product quality costs


    26



    4



    3













    Adjusted segment EBITA (non-GAAP)

    $ 2,044


    $ 1,811


    $  450


    $  401


    $  337


    $  323













    Segment EBITA Margin %

    17.7 %


    16.3 %


    12.3 %


    11.5 %


    16.7 %


    16.6 %

    Adjusted segment EBITA Margin % (non-GAAP)

    17.8 %


    16.0 %


    12.4 %


    11.7 %


    16.7 %


    16.8 %

     


    Year Ended September 30, 2024

    (in millions)

    Americas


    EMEA


    APAC







    Sales

    $      15,606


    $        4,620


    $        2,726







    Segment EBITA

    $        2,679


    $           561


    $           478







    Adjusting items:






    Earn-out adjustments

    (68)



    Product quality costs

    26


    4


    3

    EMEA joint venture loss


    17








    Adjusted segment EBITA (non-GAAP)

    $        2,637


    $           582


    $           481







    Segment EBITA Margin %

    17.2 %


    12.1 %


    17.5 %

    Adjusted segment EBITA Margin % (non-GAAP)

    16.9 %


    12.6 %


    17.6 %

    The following table reconciles Corporate expense from continuing operations as reported to the comparable adjusted amounts (unaudited):


    Three Months Ended June 30,


    Nine Months Ended June 30,

    (in millions)

    2025


    2024


    2025


    2024









    Corporate expense (GAAP)

    $               141


    $               128


    $               498


    $               359









    Adjusting items:








    Transaction/separation costs

    (9)


    (9)


    (27)


    (14)

    Transformation costs

    (39)



    (116)


    Cyber incident costs




    (27)

    Adjusted corporate expense (non-GAAP)

    $                93


    $               119


    $               355


    $               318

    6.  Net Income and Diluted Earnings Per Share

    The following tables reconcile 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 June 30,


    Income from continuing
    operations attributable to JCI


    Diluted earnings

     per share

    (in millions, except per share)

    2025


    2024


    2025


    2024









    As reported (GAAP)

    $             618


    $             852


    $            0.94


    $            1.27









    Adjusting items:








    Net mark-to-market adjustments

    (21)


    (5)


    (0.03)


    (0.01)

    Earn-out adjustments


    (61)



    (0.09)

    Restructuring and impairment costs, net of NCI

    51


    103


    0.08


    0.15

    Water systems AFFF insurance recoveries

    (1)


    (351)



    (0.52)

    Transaction/separation costs

    9


    9


    0.01


    0.01

    Transformation costs

    45



    0.07


    Related tax impact

    (8)


    92


    (0.01)


    0.14

    Adjusted (non-GAAP)*

    $             693


    $             639


    $            1.05


    $            0.95


    * May not sum due to rounding

     


    Nine Months Ended June 30,


    Income from continuing
    operations attributable to JCI


    Diluted earnings

     per share

    (in millions, except per share)

    2025


    2024


    2025


    2024









    As reported (GAAP)

    $          1,454


    $             871


    $            2.20


    $            1.28









    Adjusting items:








    Net mark-to-market adjustments

    (7)


    (42)


    (0.01)


    (0.06)

    Earn-out adjustments


    (68)



    (0.10)

    Restructuring and impairment costs, net of NCI

    146


    377


    0.22


    0.56

    Water systems AFFF settlement


    750



    1.11

    Water systems AFFF insurance recoveries

    (13)


    (351)


    (0.02)


    (0.52)

    Product quality costs


    33



    0.05

    Transaction/separation costs

    27


    14


    0.04


    0.02

    Transformation costs

    124



    0.19


    Cyber incident costs


    27



    0.04

    Discrete tax items

    (36)


    (57)


    (0.05)


    (0.08)

    Related tax impact

    (31)


    (129)


    (0.05)


    (0.19)

    Adjusted (non-GAAP)*

    $          1,664


    $          1,425


    $            2.52


    $            2.10


    * May not sum due to rounding

    The following table reconciles the denominators used to calculate basic and diluted earnings per share (in millions; unaudited):


    Three Months Ended
    June 30,


    Nine Months Ended
    June 30,


    2025


    2024


    2025


    2024





    Weighted average shares outstanding








    Basic weighted average shares outstanding

    655.4


    670.3


    $       658.9


    $       676.7

    Effect of dilutive securities:








    Stock options, unvested restricted stock and
    unvested performance share awards

    2.0


    2.5


    2.2


    1.9

    Diluted weighted average shares outstanding

    657.4


    672.8


    661.1


    678.6

    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):

    (in millions)

    June 30, 2025


    March 31, 2025


    June 30, 2024

    Short-term debt

    $              1,277


    $              1,261


    $              1,523

    Current portion of long-term debt

    570


    558


    998

    Long-term debt

    8,446


    8,167


    7,867

    Total debt

    10,293


    9,986


    10,388

    Less: cash and cash equivalents

    $                 731


    795


    858

    Net debt

    $              9,562


    $              9,191


    $              9,530







    Last twelve months income before income taxes

    $              2,262


    $              2,582


    $              1,270







    Net debt to income before income taxes

                        4.2x


                        3.6x


                        7.5x







    Last twelve months adjusted EBITDA (non-GAAP)

    $              3,843


    $              3,779


    $              3,496







    Net debt to adjusted EBITDA (non-GAAP)

    2.5x


    2.4x


    2.7x

    The following table reconciles income from continuing operations to adjusted EBIT and adjusted EBITDA (unaudited):


    Twelve Months Ended

    (in millions)

    June 30, 2025


    March 31, 2025


    June 30, 2024

    Income from continuing operations

    $             1,992


    $             2,225


    $             1,361

    Income tax provision (benefit)

    270


    357


    (91)

    Income before income taxes

    2,262


    2,582


    1,270

    Net financing charges

    339


    332


    302

    EBIT

    2,601


    2,914


    1,572

    Adjusting items:






    Net mark-to-market adjustments

    (12)


    4


    69

    Restructuring and impairment costs

    279


    330


    588

    Water systems AFFF settlement



    750

    Water systems AFFF insurance recoveries

    (29)


    (379)


    (351)

    Earn-out adjustments


    (61)


    (68)

    Transaction/separation costs

    44


    45


    35

    Transformation costs

    124


    79


    Cyber incident costs



    27

    Product quality costs



    33

    Loss on divestiture

    42


    42


    EMEA joint venture loss

    17


    17


    Adjusted EBIT (non-GAAP)

    3,066


    2,991


    2,655

    Depreciation and amortization

    777


    788


    841

    Adjusted EBITDA (non-GAAP)

    $             3,843


    $             3,779


    $             3,496

    8.  Income Taxes

    The Company's effective tax rate before consideration of certain excluded items was approximately 12.0% for the three and nine months ending June 30, 2025 and 11.4% and 11.6% for the three and nine months ending June 30, 2024, respectively.

     

    Johnson Controls Logo. (PRNewsFoto/JOHNSON CONTROLS, INC.) (PRNewsFoto/)

     

    SOURCE Johnson Controls International plc

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