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Johnson Controls International plc (NYSE: JCI) ended fiscal 2026 with double-digit organic revenue growth, wider adjusted margins and sharply higher orders, while setting fiscal 2027 guidance for 11% to 12% organic growth. The building-technology company said demand from data centers helped lift its Solutions and Services backlog to $23 billion, providing support for planned capacity investments and higher capital spending.

For the fourth quarter ended September 30, 2026, net sales rose 10% year over year to $7.11 billion. Organic revenue, which excludes acquisitions, divestitures and currency effects, increased 12%, led by 13% growth in systems and 8% growth in services. Applied revenue, including large commercial HVAC equipment, building management systems and controls, grew 20% organically.

Adjusted EBIT increased 31% to $1.30 billion, and the adjusted EBIT margin expanded 300 basis points to 18.3%. Adjusted diluted earnings per share from continuing operations rose 32% to $1.66 from $1.26. On a GAAP basis, diluted EPS from continuing operations was $1.60, compared with $0.42 a year earlier.

For the full fiscal year, revenue increased 9% to $25.67 billion, with organic growth of 8%. Adjusted EPS rose 37% to $5.16, while the adjusted EBIT margin expanded 270 basis points to 15.9%.

Orders and backlog rise on systems demand

Organic orders for the Solutions and Services businesses increased 44% in the fourth quarter, including 63% growth in systems and 7% growth in services. Backlog rose 43% to $23 billion, with systems backlog up 50% and service backlog up 5%.

The order comparison includes certain equipment-only sales for longer-cycle projects that were excluded before the first quarter of fiscal 2026. On the prior basis, total enterprise orders increased 31% in the fourth quarter, according to the presentation. Historical backlog figures were restated to include the new category.

The Americas accounted for most of the order momentum. Orders in the region increased 58%, including an 81% rise in systems and 8% growth in services. Americas backlog reached $17.8 billion, up 54%, as the company cited data-center demand. Fourth-quarter organic revenue in the region rose 14%, with systems up 16% and services up 10%. Adjusted segment EBITA margin expanded 210 basis points to 22.0%.

EMEA organic revenue increased 3%, as 6% service growth offset flat systems revenue. Orders rose 12%, and backlog increased 18% to $3.1 billion. Adjusted segment EBITA margin improved 80 basis points to 16.4%.

APAC organic revenue advanced 13%, including 15% systems growth and 6% service growth. Orders increased 11%, while backlog rose 12% to $2.1 billion. The region’s adjusted segment EBITA margin increased 110 basis points to 18.9%.

Fiscal 2027 outlook and investment plans

Johnson Controls expects fiscal 2027 organic revenue growth of 11% to 12%, operating leverage of at least 30% and adjusted EPS of $6.15 to $6.30. Adjusted free cash flow conversion is projected at approximately 95%.

For the first quarter, management forecast organic revenue growth of 12% to 14%, operating leverage of 30% to 35% and adjusted EPS of $1.15 to $1.20. The outlook assumes an adjusted tax rate of about 18.5% for both the quarter and full year.

The company plans $900 million of capital expenditures in fiscal 2027 as it expands capacity in high-growth verticals, seeks to reduce lead times and works to convert backlog. It also plans to consolidate manufacturing and warehouse facilities, simplify its operating footprint and streamline support functions. Johnson Controls anticipates $400 million of related expenses across fiscal 2027 and fiscal 2028, targeting a $600 million gross annualized savings run rate by fiscal 2029.

Adjusted free cash flow totaled $1.10 billion in the fourth quarter and $3.23 billion for the full year. Full-year adjusted free cash flow conversion was 103%. The company returned about $2.5 billion to shareholders during fiscal 2026, including approximately $1.5 billion of share repurchases and $1 billion of dividends.

At September 30, Johnson Controls had $9.28 billion of total debt, $618 million of cash and $8.66 billion of net debt. Net debt to adjusted EBITDA declined to 1.8 times from 2.4 times a year earlier, below the company’s target range of approximately 2.0 to 2.5 times.

The outlook remains subject to the conversion of backlog into revenue and continued demand in data centers and other mission-critical markets. Johnson Controls also identified trade restrictions, tariffs, inflation, supply-chain disruption, foreign-exchange movements, geopolitical volatility, execution of portfolio and restructuring actions, cybersecurity threats, labor constraints and changes in customer financing conditions among its principal uncertainties.

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