Q4 and FY26
Filed Oct 27, 2026Johnson Controls Reports Q4 and FY26 Results; Initiates FY27 Guidance
Q4 organic sales increased 12%, adjusted EPS was $1.66, orders increased 44% organically year-over-year and backlog of $23.0 billion increased 43% organically year-over-year. All three segments expanded adjusted Segment EBITA margins, while the company initiated FY27 guidance for 11% to 12% organic sales growth and adjusted EPS of $6.15 to $6.30.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q4 FY26 net salesGAAP | $7.11B | – | 10 % |
| Q4 FY26 organic sales growthnon-GAAP | 12 % | – | 12 % |
| FY26 net salesGAAP | $25.67B | – | 9 % |
| FY26 organic sales growthnon-GAAP | 8 % | – | 8 % |
| Q4 FY26 products and systems revenueGAAP | $5.01B | – | 13 % |
| Q4 FY26 services revenueGAAP | $2.10B | – | 5 % |
| FY26 products and systems revenueGAAP | $17.70B | – | 10 % |
| FY26 services revenueGAAP | $7.96B | – | 7 % |
| Q4 FY26 gross profitGAAP | $2.71B | – | – |
| FY26 gross profitGAAP | $9.52B | – | – |
| Q4 FY26 selling, general and administrative expensesGAAP | $1.48B | – | – |
| FY26 selling, general and administrative expensesGAAP | $5.51B | – | – |
| Q4 FY26 restructuring and impairment costsGAAP | $ 87 | – | – |
| FY26 restructuring and impairment costsGAAP | $311M | – | – |
| Q4 FY26 income from continuing operations before income taxesGAAP | $1.06B | – | – |
| FY26 income from continuing operations before income taxesGAAP | $3.43B | – | – |
| Q4 FY26 income from continuing operations attributable to Johnson ControlsGAAP | $967M | – | – |
| FY26 income from continuing operations attributable to Johnson ControlsGAAP | $2.88B | – | – |
| Q4 FY26 net income attributable to Johnson ControlsGAAP | $967M | – | – |
| FY26 net income attributable to Johnson ControlsGAAP | $2.85B | – | – |
| Q4 FY26 diluted EPS from continuing operationsGAAP | $ 1.60 | – | – |
| FY26 diluted EPS from continuing operationsGAAP | $ 4.72 | – | – |
| Q4 FY26 adjusted net income attributable to JCInon-GAAP | $1.01B | – | – |
| FY26 adjusted net income attributable to JCInon-GAAP | $3.15B | – | – |
| Q4 FY26 adjusted diluted EPS from continuing operationsnon-GAAP | $ 1.66 | – | – |
| FY26 adjusted diluted EPS from continuing operationsnon-GAAP | $ 5.16 | – | – |
| Q4 FY26 EBITGAAP | $1.15B | – | – |
| Q4 FY26 EBIT marginGAAP | 16.1 % | – | – |
| Q4 FY26 adjusted EBITnon-GAAP | $1.30B | – | – |
| Q4 FY26 adjusted EBIT marginnon-GAAP | 18.3 % | – | – |
| FY26 adjusted EBITnon-GAAP | $4.09B | – | – |
| FY26 adjusted EBIT marginnon-GAAP | 15.9 % | – | – |
| Q4 FY26 cash provided by operating activities from continuing operationsGAAP | $1.3B | – | – |
| FY26 cash provided by operating activities from continuing operationsGAAP | $3.87B | – | – |
| Q4 FY26 free cash flownon-GAAP | $1.08B | – | – |
| FY26 free cash flownon-GAAP | $3.41B | – | – |
| Q4 FY26 adjusted free cash flownon-GAAP | $1.10B | – | – |
| FY26 adjusted free cash flownon-GAAP | $3.23B | – | – |
| Q4 FY26 adjusted free cash flow conversionnon-GAAP | 112% | – | – |
| FY26 adjusted free cash flow conversionnon-GAAP | 103% | – | – |
| FY26 adjusted effective tax rate for continuing operationsnon-GAAP | approximately 17% | – | – |
| September 30, 2026 total debtother | $9.28B | – | – |
| September 30, 2026 net debtother | $8.66B | – | – |
| September 30, 2026 net debt to adjusted EBITDAnon-GAAP | 1.8x | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Americas Q4 FY26Organic sales increased 14% led by continued strength in both Applied HVAC & Controls. Products and Systems sales increased 16% and Services increased 10% organically. Orders increased 58% year-over-year and backlog of $17.8 billion increased 54% year-over-year, supported by sustained demand for data centers and differentiated technology and capabilities. | $4.93B | – | 14 % |
| EMEA Q4 FY26Organic sales grew 3% versus the prior year, with continued pressure in the region due to the conflicts in the Middle East. Products and Systems sales remained flat and Services increased 6% organically. Orders increased 12% year-over-year and backlog of $3.1 billion increased 18% year-over-year. | $1.31B | – | (2 %) |
| APAC Q4 FY26Organic sales increased 13% versus the prior year, led by 15% growth in Product and Systems and continued strength in Applied HVAC. Orders increased 11% and backlog of $2.1 billion increased 12% year-over-year. | $871M | – | 12 % |
| Americas FY26Organic growth was 10 %. | $17.40B | – | 10 % |
| EMEA FY26Organic growth was 2 %. | $5.12B | – | 3 % |
| APAC FY26Organic growth was 12 %. | $3.15B | – | 13 % |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
FY27 Q1 and FY27 full year continuing operations outlook
- RevenueFY27 Q1 organic sales growth of 12% to 14%; FY27 full year organic sales growth of 11% to 12%
- NoteFY27 Q1 operating leverage of 30% to 35%
- NoteFY27 Q1 Adjusted EPS of $1.15 to $1.20
- NoteFY27 full year operating leverage of 30%+
- NoteFY27 full year Adjusted EPS of $6.15 to $6.30
- NoteFY27 full year Adjusted free cash flow conversion of ~95%
Capital returns
- The Company paid dividends of $242 million.
- Stock repurchases and retirements were $(655) for the three months ended September 30, 2026.
- Payment of cash dividends was $(976) for the twelve months ended September 30, 2026.
- Stock repurchases and retirements were $(1,505) for the twelve months ended September 30, 2026.
What drove it
- Q4 organic sales increased 12%, while FY26 organic sales increased 8%.
- Americas organic sales increased 14%, supported by Applied HVAC & Controls, while Americas orders increased 58% year-over-year.
- Q4 orders increased 44% organically year-over-year and backlog of $23.0 billion increased 43% organically year-over-year.
- All three segments expanded adjusted Segment EBITA margin: Americas increased 210 bp, EMEA increased 80 bps and APAC increased 110 bp.
- Americas margin expansion was driven primarily by strong operating leverage on higher revenue and favorable business mix; EMEA benefited from favorable pricing and productivity improvements; APAC benefited from productivity improvements and higher revenues.
- Corporate expense declined to $ 178 from $ 269, with the release citing ongoing cost reduction actions across corporate functions and timing of certain corporate expenses.
Concerns
- EMEA sales decreased (2 %) in Q4 FY26, and the company cited continued pressure in the region due to conflicts in the Middle East.
- The company identifies fluctuations in demand in key verticals, including data centers and other mission-critical segments, customer concentration and conversion of backlog to revenue as risks.
- FY27 guidance is non-GAAP, and the company stated it cannot present a quantitative reconciliation to the most directly comparable forward-looking GAAP measures because the information is unavailable and cannot be reliably predicted without unreasonable effort or expense.
- The adjusted effective tax rate for continuing operations was approximately 17% for the three and twelve months ended September 30, 2026, compared with approximately 12% for the three and twelve months ended September 30, 2025.
What to watch
- Conversion of the $23.0 billion backlog into revenue and the trajectory of orders after Q4 organic orders growth of 44%.
- Whether Americas sustains data-center-supported demand, where Q4 orders increased 58% year-over-year and backlog increased 54% year-over-year.
- EMEA demand amid continued pressure attributed to conflicts in the Middle East.
- Execution against FY27 Q1 guidance for 12% to 14% organic sales growth, 30% to 35% operating leverage and adjusted EPS of $1.15 to $1.20.
- Delivery against FY27 full-year guidance for 11% to 12% organic sales growth, 30%+ operating leverage, adjusted EPS of $6.15 to $6.30 and adjusted free cash flow conversion of ~95%.
Balance sheet and cash flow
- Cash and cash equivalents were $ 618 at September 30, 2026, versus $ 379 at September 30, 2025.
- Short-term debt was $ 678, current portion of long-term debt was $ 1,066, and long-term debt was $ 7,533 at September 30, 2026.
- Capital expenditures were $(222) for Q4 FY26 and $(465) for FY26.
- Cash provided by operating activities from continuing operations was $ 1,300 for Q4 FY26 and $ 3,872 for FY26.
- Net debt was $ 8,659 at September 30, 2026, compared with $ 8,834 at June 30, 2026 and $ 9,501 at September 30, 2025.
Analysis
Johnson Controls closed FY26 with accelerating operating momentum. Q4 net sales increased 10 % to $ 7,113 and organic sales growth was 12 %, compared with FY26 net sales growth of 9 % and organic growth of 8 %. Products and systems revenue increased 13 % in the quarter, ahead of services revenue growth of 5 %. The company reported Q4 organic orders growth of 44% year-over-year and backlog of $23.0 billion, up 43% organically year-over-year, providing a substantial demand indicator entering FY27.
Americas was the principal growth engine. Q4 sales increased 14 % to $ 4,930 and organic sales also increased 14 %, driven by Applied HVAC & Controls, while orders increased 58% and backlog reached $17.8 billion. EMEA reported a (2 %) sales decline to $ 1,312 despite 3% organic growth, with the release citing divestitures and continued regional pressure from Middle East conflicts. APAC sales increased 12 % to $ 871 and organic sales increased 13 %, led by Product and Systems growth and Applied HVAC strength.
Profitability improved sharply. Q4 GAAP EBIT was $ 1,145 with a 16.1 % margin, versus $ 431 and 6.7 % a year earlier; adjusted EBIT was $ 1,299 and adjusted EBIT margin was 18.3 %, versus $ 988 and 15.3 %. Each segment expanded adjusted Segment EBITA margin, with Americas at 22.0 %, EMEA at 16.4 % and APAC at 18.9 %. The release attributes the improvements to operating leverage, favorable mix, pricing, productivity and corporate cost actions. Q4 adjusted diluted EPS was $ 1.66, compared with $ 1.26, while GAAP diluted EPS from continuing operations was $ 1.60, compared with $ 0.42.
Cash generation was strong. Cash provided by operating activities from continuing operations was $ 1,300 in Q4 and $ 3,872 for FY26. Q4 free cash flow was $ 1,078 and adjusted free cash flow was $ 1,096, producing 112% adjusted free cash flow conversion. At September 30, 2026, cash and cash equivalents were $ 618, total debt was $ 9,277 and net debt was $ 8,659. The company paid dividends of $242 million during Q4 and reported $(655) of Q4 stock repurchases and retirements.
The company initiated FY27 guidance that calls for continued double-digit organic growth. Q1 guidance is for 12% to 14% organic sales growth, 30% to 35% operating leverage and adjusted EPS of $1.15 to $1.20. Full-year guidance is for 11% to 12% organic sales growth, 30%+ operating leverage, adjusted EPS of $6.15 to $6.30 and adjusted free cash flow conversion of ~95%. The guide places particular attention on backlog conversion, data-center-related demand in the Americas, margin execution and EMEA conditions.
Management, verbatim
We finished fiscal 2026 with significant momentum, delivering more than 8% organic revenue growth, double-digit adjusted EPS growth and strong free cash flow conversion.
Joakim Weidemanis, Chief Executive Officer of Johnson Controls
Our strong topline growth, combined with continued productivity and simplification improvements, led to margin expansion across all three segments.
Joakim Weidemanis, Chief Executive Officer of Johnson Controls
With record backlog and sustained customer demand, we enter fiscal 2027 with confidence in our ability to continue creating value for customers and shareholders.
Joakim Weidemanis, Chief Executive Officer of Johnson Controls
Not in the filing
stated, not guessed- Q4 FY26 gross margin was not reported.
- FY26 gross margin was not reported.
- Q4 FY26 GAAP operating income was not reported as a line item.
- FY26 GAAP operating income was not reported as a line item.
- Q4 FY26 GAAP tax rate was not reported.
- FY26 GAAP tax rate was not reported.
- Prior-quarter comparative figures were not reported for most Q4 income-statement metrics.
- Prior outlook was not provided, so no comparison of actual results with prior guidance is available.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.