Johnson Controls International (JCI) Q2 2026 earnings summary

Executive summary

• Q2 sales rose 8% to $6.14B, with organic sales up 6% year-over-year, driven by strong demand in data centers and technology-driven environments, especially in the Americas.

• Orders increased 30% year-over-year, with Americas orders up 40%, resulting in a record $20B backlog, up 26% year-over-year.

• Adjusted EPS grew 45% to $1.19, exceeding guidance; GAAP EPS was $0.99.

• Gross profit margin improved to 36.8%, with adjusted EBIT margin expanding 310 bps to 15.5%.

• Proprietary business system and system-level innovation are driving operational improvements and customer wins.

Financial highlights

• Q2 net sales reached $6.14B, up 8% year-over-year; gross profit was $2.26B (36.8% margin).

• Adjusted EBIT margin was 15.5%, up from 12.4% year-over-year; adjusted net income was $730M.

• Free cash flow for Q2 was $604M; adjusted free cash flow was $526M, with 73% conversion.

• Net debt/adjusted EBITDA improved to 2.0x; net debt at quarter-end was $8.8B.

• Dividends paid totaled $244M; $215M in stock repurchases during Q2.

Outlook and guidance

• FY26 organic sales growth guidance raised to ~6%; adjusted EPS outlook increased to ~$4.85 (up ~30%).

• Adjusted free cash flow conversion expected at ~100% for the full year.

• Q3 guidance: organic sales growth ~6%, operating leverage ~45-50%, adjusted EPS ~$1.28.

• Tax rate guidance at ~17% for Q3 and FY26.

• 70% of backlog expected to convert to revenue in the next 12 months.