There is a lot of money sloshing around the data center buildout, and Johnson Controls International PLC (JCI) just showed investors how much of it is landing in its backlog. The building solutions company reported fiscal fourth-quarter 2026 results on Tuesday that beat Wall Street expectations, and the stock rose as investors got a look at fiscal 2027 guidance.

The Quarter by the Numbers

Johnson Controls reported adjusted earnings of $1.66 per share, topping the analyst consensus estimate of $1.58.

Revenue rose 10% year over year to $7.11 billion, exceeding the consensus estimate of $7.03 billion. Organic sales increased 12% during the quarter.

The company's backlog reached $23 billion, up 43% organically from a year earlier. Company-wide orders increased 44% organically year over year, while the Americas segment recorded 58% orders growth, excluding acquisitions, divestitures and foreign currency effects.

Gross profit increased 15.1% to $2.71 billion, while gross margin widened to 38.03% from 36.49% a year earlier.

How the Regions Performed

Americas: Sales rose 14% to $4.9 billion, with organic sales also increasing 14%, driven by continued strength in Applied HVAC and Controls. Orders climbed 58%, excluding acquisitions and currency effects. Backlog increased 54% to $17.8 billion, supported by sustained data center demand and the company's technology capabilities. Adjusted segment EBITA margin expanded 210 basis points to 22.0%, reflecting strong operating leverage from higher revenue and a favorable business mix.

Europe, Middle East and Africa: Sales declined 2% to $1.3 billion, although organic sales rose 3%, as ongoing conflicts in the Middle East weighed on performance. Orders increased 12%, excluding acquisitions and currency effects, while backlog grew 18% to $3.1 billion. Adjusted segment EBITA margin improved 80 basis points to 16.4%, supported by favorable pricing and productivity improvements, partially offset by business divestitures.

Asia-Pacific: Sales rose 12% to $871 million, while organic sales increased 13%, led by 15% organic growth in Products and Systems and continued strength in Applied HVAC. Orders climbed 11%, excluding acquisitions and currency effects, while backlog increased 12% to $2.1 billion. Adjusted segment EBITA margin expanded 110 basis points to 18.9%, benefiting from productivity improvements and higher revenue.

Cash Keeps Flowing

Johnson Controls ended the quarter with $618 million in cash and cash equivalents.

Operating cash flow rose to $1.3 billion from $968 million a year earlier, while free cash flow increased to $1.08 billion from $838 million.

What the CEO Is Saying

CEO Joakim Weidemanis said the company ended fiscal 2026 with strong momentum, supported by organic revenue growth of more than 8%, double-digit adjusted earnings-per-share growth and strong free cash flow conversion.

Weidemanis attributed margin expansion across all three segments to higher revenue, productivity improvements and business simplification. He also cited the company's differentiated technological capabilities, field presence and proprietary business system as key drivers of customer wins and improved execution.

Looking ahead, Weidemanis said record backlog and sustained customer demand position Johnson Controls for continued growth and value creation in fiscal 2027.

The Road Ahead

Johnson Controls issued guidance for the first quarter and full fiscal year 2027.

For the first quarter, the company expects adjusted earnings of $1.15 to $1.20 per share, compared with the analyst estimate of $1.12 per share. It projects organic sales growth of 12% to 14%.

For fiscal 2027, Johnson Controls forecasts adjusted earnings of $6.15 to $6.30 per share, compared with the analyst estimate of $6.16 per share. The company expects organic sales growth of 11% to 12%.

Market Reaction

Johnson Controls shares were up 4.05% at $153.47 at the time of publication on Tuesday, according to market data.