Johnson Controls International (JCI) Q4 2024 earnings summary

Executive summary

• Achieved double-digit organic revenue growth, robust margin expansion, and 96% adjusted free cash flow conversion in Q4 2024, ending the year with a record $13.1 billion backlog driven by strong data center demand.

• Transformation to a pure-play commercial building solutions provider is nearly complete, with the sale of the Residential and Light Commercial business to Bosch expected to close in fiscal Q4 2025; R&LC business now classified as discontinued operations.

• Orders grew 8% in Q4, led by double-digit Service growth and a 5% increase in Systems orders, supporting a record long-cycle backlog.

• Introduced fiscal 2025 guidance for adjusted EPS of $3.40–$3.50 from continuing operations, reflecting confidence in sustained growth and margin expansion.

• CEO succession process ongoing, with an update expected in the first half of calendar 2025.

Financial highlights

• Q4 organic revenue grew 10% year-over-year; segment margin expanded 260 basis points to 18.6%; adjusted EPS of $1.28, up 22% year-over-year.

• Q4 FY24 net sales from continuing operations were $6.25B, up 7% year-over-year; gross profit margin improved to 36.3%.

• FY24 organic sales grew 4% to $27.4B; adjusted segment EBITA margin increased 110bps to 16.1%.

• Adjusted free cash flow conversion reached 96%, with $2.4 billion in adjusted free cash flow, up nearly $800 million year-over-year.

• Returned $2.2 billion to shareholders via dividends and share repurchases in FY24.

Outlook and guidance

• Fiscal 2025 guidance: mid-single-digit organic sales growth, adjusted segment margin expansion of over 50 basis points, and adjusted EPS of $3.40–$3.50 (6%-9% growth).

• Q1 2025 guidance: organic sales growth in mid-single digits, margin expansion to ~14.5%, and adjusted EPS of $0.57–$0.60 (24%-30% growth).

• Free cash flow conversion expected at 85% or greater; plan to return 100% of free cash flow to shareholders.

• Multi-year restructuring plan to deliver $500 million in annual cost savings, with $400 million in expenses over three years.