Thermal management and building technology company Johnson Controls, which is based in Ireland but has operating headquarters in Glendale, is again reaping benefits from the data center boom.
The company reported Wednesday a record $21 billion backlog, up 30% from the year prior, and 9% sales growth in the third quarter of its fiscal year, up to $4.6 billion compared to $4.1 billion a year ago. That’s in addition to last quarter (January-March), which also reported a record $20 billion backlog and an 8% increase in global sales from the same period last year.
Orders in the third quarter increased 27% due to continued demand from large projects across the company’s core markets, including solutions for large-scale data center projects, according to filing with the U.S. Securities and Exchange Commission.
Joakim Weidemanis
The company attributed its overall growth to “resilient operating conditions in rapidly expanding industries such as data centers, health care, pharmaceuticals, advanced manufacturing and higher education,” SEC filings said.
Though its data center sales were an important part of its sales growth, Johnson Controls also attributes growth to its non-data center pipeline, which is growing “almost double digits,” Johnson Controls chief executive officer Joakim Weidemanis said.
The company also changed its 2026 guidance. It now forecasts organic sales growth of about 8%, previously 6%; adjust earnings per share of $5.05, up from $4.85; and a mild decrease in operating leverage, down to a 45% to 50% range, previously projected at roughly 50%.
For the fourth quarter alone, the company projects 9% to 10% organic revenue growth, operating leverage of 45% to 50%, and adjusted EPS of approximately $1.55.
“We delivered another strong quarter, highlighted by 10% organic revenue growth, sustained order momentum, and continued margin expansion,” said Weidemanis. “While we remain early in our journey deploying our proprietary business system, the progress we are seeing demonstrates the potential to further improve execution, productivity and customer outcomes. Our third-quarter performance and continued momentum give us confidence in our raised full-year outlook.”
The company reported a loss in its third quarter net income, down to $752 million from $778 during the same period last year.
Similar to thermal controls competitor Modine, Johnson Controls expressed some concern with supply chain disruption in a high-growth environment like the data centers industry.
“We are more vertically integrated than some in our industry and in a high-growth environment,” said Weidemanis. “That, of course, means that we control more of our own supply chain. I feel very good about where we are on many of our product lines… we depend on external vendors as well. Occasionally, there are some bottlenecks. We try to get ahead of that.”
