Johnson Controls International (JCI) Q2 2025 earnings summary

Executive summary

• Organic sales grew 7% year-over-year in Q2 2025, with segment margins expanding 180 basis points to 16.7% and adjusted EPS up 19% to $0.82.

• Orders increased 5%, and Building Solutions backlog reached a record $14 billion, up 12% year-over-year.

• The company is divesting its Residential and Light Commercial HVAC business to Bosch for $8.1 billion, expected to close in H2 2025.

• Multi-year restructuring plan underway, targeting $400 million in costs and $500 million in annual savings.

• Leadership transition and organizational restructuring into three geographic segments to enhance efficiency and customer focus.

Financial highlights

• Q2 sales were $5.68 billion, up 1% year-over-year, with gross profit margin improving to 36.5%.

• Adjusted EPS for the quarter was $0.82, up 19% year-over-year and above guidance.

• Adjusted free cash flow conversion reached 84% for the quarter and is targeted at ~100% for the year.

• Net debt to adjusted EBITDA was 2.4x at quarter-end, within the target range.

• Available cash at quarter-end was approximately $800 million.

Outlook and guidance

• Q3 2025 guidance: mid-single-digit organic sales growth, segment margin ~17.5%, adjusted EPS $0.97–$1.00.

• Full-year FY25 guidance: mid-single-digit organic sales growth, adjusted segment EBITA margin to expand ~90 bps, adjusted EPS ~$3.60, and free cash flow conversion ~100%.

• Guidance incorporates tariff impacts, ongoing geopolitical risks, and restructuring actions.