Johnson Controls International (JCI) Q1 2026 earnings summary

Executive summary

• Achieved 7% net sales growth year-over-year to $5.8 billion in Q1, with organic sales up 6% and broad-based strength across all regions and segments.

• Adjusted EBIT margin expanded by 190 basis points to 12.4%, and adjusted EPS rose nearly 40% year-over-year to $0.89, exceeding guidance.

• Orders increased 39% year-over-year, with backlog up 20% to $18.2 billion, driven by strong demand in data centers and high-growth markets, especially in the Americas.

• Advanced portfolio with innovations in cooling, connectivity, and digital service capabilities, and completed key divestitures.

• Raised full-year adjusted EPS guidance to ~$4.70, reflecting strong execution and momentum.

Financial highlights

• Q1 sales were $5.8 billion, up 7% year-over-year; gross profit reached $2.07 billion, with gross margin at 35.8%.

• Adjusted EBIT was $719 million, up 27% year-over-year; adjusted EBIT margin reached 12.4%.

• Adjusted EPS from continuing operations was $0.89, up 39% from $0.64 in the prior year.

• Free cash flow was $531 million; adjusted free cash flow was $428 million, with conversion at 77%.

• Net debt to adjusted EBITDA improved to 2.2x, within the long-term target range.

Outlook and guidance

• Q2 guidance: organic sales growth ~5%, operating leverage ~45%, adjusted EPS ~$1.11.

• Full-year FY26 guidance: mid-single-digit organic sales growth, operating leverage ~50%, adjusted EPS raised to ~$4.70, and adjusted free cash flow conversion ~100%.

• Tax rate expected at ~17% for Q2 and full-year FY26.

• Backlog grew 20% year-over-year to $18.2 billion, with orders up 39%.