01—Abstract
Summary
Summary of the 10-Q filed February 4, 2026. Cited figures are marked; the original filing is the authoritative source.
Johnson Controls International plc (JCI) reported strong performance for the three months ended December 31, 2025.
Net sales increased by 7% year-over-year to $5.8 billiona, driven by organic growth across all segments, particularly in the Americas. Gross profit also saw an 8% increase, indicating effective pricing and productivity initiatives. A significant factor contributing to improved profitability was the substantial decrease in Selling, General, and Administrative (SG&A) expenses, largely due to $130 million in AFFF insurance recoveries and a $70 million gain from the divestiture of the ADT Mexico business.
Despite a notable increase in the income tax provision, resulting in a higher effective tax rate of 21.4% compared to 11.5% in the prior year, net income attributable to Johnson Controls rose to $524 millionb, or $0.85 per diluted share, from $419 million, or $0.63 per diluted share, in the prior year's comparable period. The company also reported robust growth in both backlog and orders, up 20% and 39% respectively, fueled by increased customer investments in data center projects.
02—Key points
Key Highlights
- Net sales increased 7% to $5.8 billion, driven by organic growth across all segments and favorable foreign currency translation.
- Gross profit increased 8% due to margin improvements from pricing, productivity, and project delivery.
- SG&A expenses decreased 13% largely due to significant AFFF insurance recoveries ($130 million) and a gain from the ADT Mexico divestiture ($70 million).
- Net income attributable to Johnson Controls increased to $524 million ($0.85/share) from $419 million ($0.63/share) in the prior year.
- Backlog and orders saw significant year-over-year increases of 20% and 39% respectively, driven by demand in data center projects.
- The company generated $611 million in cash from operating activities, a substantial increase from $249 million in the prior year.
- Divestiture of the ADT Mexico Security business for $207 million with a recognized gain of $70 million was completed on October 31, 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Johnson Controls International plc kept $0.09.
- Revenue$5.80B100.0%
- Cost of revenue−$3.72B64.2%
- Gross profit$2.07B35.8%
- Operating costs−$1.52B26.2%
- Operating income$555.0M9.6%
- Interest, other & tax−$31.0M0.5%
- Net income$524.0M9.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed February 4, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $5.80B$5.43B | +6.8% |
| Cost of Revenue | $3.72B$3.50B | +6.4% |
| Gross Profit | $2.07B$1.93B | +7.7% |
| SG&A Expenses | $1.22B$1.40B | −12.7% |
| Operating Income | $555.00M$363.00M | +52.9% |
| Interest Expense | $42.00M$67.00M | −37.3% |
| Net Income | $524.00M$419.00M | +25.1% |
| EPS (Basic) | $0.86$0.63 | +36.5% |
| EPS (Diluted) | $0.85$0.63 | +34.9% |
| Shares Outstanding (Basic) | 611.00M662.00M | −7.7% |
| Shares Outstanding (Diluted) | 614.00M665.00M | −7.7% |
05—Questions
Frequently Asked Questions
What were the primary drivers of JCI's revenue growth in this quarter?
Revenue growth was primarily driven by organic sales increases across all segments, particularly in the Americas, and a favorable impact from foreign currency translation. Growth was seen in both Products & Systems and Services offerings.
How did the AFFF insurance recoveries and business divestitures impact the company's financial results?
The AFFF insurance recoveries of $130 million and the gain on the ADT Mexico divestiture of $70 million significantly reduced Selling, General, and Administrative (SG&A) expenses, thereby boosting profitability for the quarter.
What is the significance of the increase in backlog and orders?
The substantial increase in backlog (20%) and orders (39%) indicates strong future demand for Johnson Controls' products and services, especially driven by customer investments in data center projects. This suggests potential for continued revenue growth in upcoming periods.
What is the company's outlook on its financial condition and liquidity?
Johnson Controls believes its capital resources and liquidity position, including $552 million in cash and cash equivalents, are adequate to fund operations and meet its cash obligations for the foreseeable future. The company also has access to a $2.5 billion revolving credit facility and expects to remain in compliance with its financial covenants.
06—Continue