Johnson Controls Reports 16.4% Increase in Net Income to $525 Million for December 2025 Quarter

Johnson Controls International plc reported a net income of $525 million for the three months ended December 31, 2025, a 16.4% increase from $451 million in the same period last year. The company’s revenue rose to $5.797 billion, reflecting a 6.8% increase compared to $5.426 billion in the prior year. This growth was attributed to higher organic sales and favorable foreign currency translation, with organic sales increasing by $311 million. The gross profit also improved, reaching $2.074 billion, up 7.7% from $1.926 billion, driven by margin enhancements from disciplined pricing and productivity initiatives.

In terms of operational changes, Johnson Controls completed the divestiture of its ADT Mexico Security business, generating net proceeds of $207 million and recognizing a pre-tax gain of $70 million. The company also recorded a loss of $31 million from discontinued operations related to its Residential & Light Commercial HVAC business, which was sold in July 2025. The restructuring plan initiated in the previous fiscal year continues, with an expected total cost of approximately $400 million aimed at achieving annual savings of about $500 million by fiscal 2027.

The company’s strategic realignment into three reportable segments—Americas, EMEA, and APAC—has shown positive results, with net sales in the Americas segment increasing by 6% to $3.843 billion, while EMEA and APAC segments reported growth of 9% and 8%, respectively. The backlog of orders also increased significantly, with a total backlog of $18.2 billion as of December 31, 2025, representing a 20% year-over-year increase, driven by heightened demand in data center projects.

Johnson Controls reported a decrease in selling, general, and administrative expenses (SG&A) to $1.221 billion, down 12.8% from $1.399 billion, primarily due to AFFF insurance recoveries and the gain from the ADT divestiture. The effective tax rate for the quarter was 21.4%, significantly higher than the previous year’s rate of 11.5%, influenced by various factors including the tax impact of divestitures. Looking ahead, the company remains focused on leveraging its technological capabilities and expanding its market presence, particularly in energy efficiency and decarbonization solutions, while navigating macroeconomic challenges and potential regulatory changes.