Johnson Controls Reports Q3 Fiscal 2025 Results with $778M Net Income

Johnson Controls International plc reported its financial results for the third quarter of fiscal 2025, revealing a net income of $778 million, or $1.07 per diluted share, compared to $1.05 billion, or $1.45 per diluted share, in the same period last year. For the nine months ended June 30, 2025, the company achieved a net income of $1.76 billion, up from $1.22 billion in the prior year. Total revenues for the quarter reached $6.05 billion, a 3% increase from $5.90 billion in the previous year, while year-to-date revenues rose to $17.15 billion, also reflecting a 3% increase from $16.70 billion.

The company noted significant changes in its financial performance compared to the previous fiscal period. Gross profit for the three months ended June 30, 2025, increased by 6% to $2.25 billion, driven by improved margins from higher-margin backlog conversion and an optimized services mix. However, selling, general, and administrative expenses surged by 58% to $1.42 billion, primarily due to the unfavorable impact of prior year insurance recoveries related to the water systems AFFF settlement and increased transformation costs.

Strategically, Johnson Controls has undergone a significant organizational change, realigning its operations into three reportable segments: Americas, EMEA, and APAC, effective April 1, 2025. This restructuring aims to enhance operational efficiency and better reflect the company's focus on building solutions. Additionally, the company completed the divestiture of its Residential and Light Commercial HVAC business to Bosch for approximately $5.0 billion in cash, a move that aligns with its strategy to streamline operations and focus on core business areas.

Operationally, the company reported a backlog of $16.2 billion as of June 30, 2025, indicating a robust demand for its products and services. The Americas segment accounted for $10.3 billion of this backlog, reflecting a 10% year-over-year increase. The company also reported a 3% increase in net sales in the Americas, driven by organic growth in applied HVAC and controls. In terms of workforce, Johnson Controls maintained a headcount that supports its operational needs, although specific employee numbers were not disclosed in the filing.

Looking ahead, Johnson Controls expressed optimism about its growth trajectory, driven by increasing demand for sustainable building solutions and ongoing investments in technology and innovation. The company anticipates that its restructuring efforts will yield annual cost savings of approximately $500 million upon full implementation. However, it also acknowledged potential risks related to macroeconomic conditions, including inflation and geopolitical tensions, which could impact future performance.