Johnson Controls International plc, a global leader in smart, safe, healthy, and sustainable building solutions, reported robust financial results for the fiscal second quarter of 2025, demonstrating strong operational execution and sustained demand across its business segments.
In Q2 2025, Johnson Controls achieved a 1% increase in total sales, with a remarkable 7% rise in organic sales, reaching \(5.7 billion. These results include GAAP earnings per share (EPS) of \)0.71 and an adjusted EPS of \(0.82. Income from continuing operations stood at \)473 million on a GAAP basis, with an adjusted income of $545 million, underscoring the company’s profitability and strong operational margin.
The building solutions segment experienced significant growth, with the North America region reporting \(2.9 billion in sales, marking a 6% increase compared to the prior year, driven by a 7% organic sales rise. Applied HVAC and Controls led this growth, supported by a 4% year-over-year increase in orders and an 11% increase in backlog to \)9.8 billion. Despite a slight 20 basis point decline in EBITA margin at 13.4%, the segment’s performance reflects broad-based strength.
The EMEA and Latin America region delivered $1.1 billion in sales, a 2% gain with a 5% organic increase, driven largely by higher service revenue growth of 9% and a doubledigit rise in order flow. This segment saw an impressive EBITA margin expansion of 410 basis points to 12.5%, reflecting productivity enhancements and a positive service mix.
Sales in the Asia Pacific region surged 10% to \(542 million, with organic growth of 13%, fueled by strong double-digit gains in both service and systems businesses. Orders remained stable year-over-year, while the backlog increased by 21% to \)1.5 billion. EBITA margin expanded 360 basis points to 14.6%, driven by operational efficiencies.
Conversely, the Global Products segment saw a 13% sales decline to $1.1 billion; however, it achieved 8% organic sales growth excluding divestitures. This is highlighted by more than 20% growth in Applied HVAC, notably in North America and the EMEA/LA regions. The EBITA margin expanded by 780 basis points to a robust 30.1%, reflecting productivity improvements and increased volumes.
Corporate expenses rose due to certain accruals and costs associated with the planned divestiture of the Residential and Light Commercial HVAC business but were controlled excluding transaction and transformation costs.
On the cash flow front, the company generated \(550 million in operating cash flow and \)456 million in free cash flow. Shareholder returns included \(245 million in dividends and \)330 million in share repurchases, reflecting strong capital allocation discipline.
Looking forward, Johnson Controls raised its full-year fiscal 2025 guidance while initiating fiscal Q3 projections. The company expects mid-single-digit organic sales growth, adjusted EBITA margin improvement of approximately 90 basis points year-over-year, and adjusted EPS around $3.60. Adjusted free cash flow conversion is projected at about 100%, up from previous guidance of over 90%, signaling strong cash generation prospects.
Contextually, these results resonate with themes from Johnson Controls’ recent earnings calls where management highlighted continued robust demand in building solutions, particularly in HVAC and controls, consistent backlog growth, margin expansion, and ongoing portfolio transformation. The company’s strategic focus on lean operations and enhanced customer-centric approaches underpins these sustained gains.
Johnson Controls’ performance during Q2 2025 solidifies its standing as a leader in sustainable building technology and solutions, with a strong financial foundation and positive outlook that support its mission to transform environments for improved health, safety, and sustainability.
For the full 8-K report document, please visit the source here: https://sec.gov/Archives/edgar/data/833444/000083344425000029/q2ex991xq2fy25earningsrele.htm
Tags: Johnson Controls, Q2 2025 Earnings, Organic Sales Growth, Building Solutions, Financial Performance