Dive Brief:
- Johnson Controls grew orders in the Americas 56% year over year thanks to robust systems and service growth, and helped by strong performances in the data center, life sciences and mission-critical verticals, according to the company’s fiscal Q1 earnings report, released Wednesday.
- Sales revenue in the region grew 6% year over year to $3.8 billion, led by strength in its applied HVAC and controls businesses, which fueled a 22% increase in its order backlog to $13.3 billion, the company reported. Its Americas services sales revenue grew 10% year over year, with a 4% rise in systems revenue, according to the company’s earnings presentation.
- “We are building a faster-growing, more profitable, and more disciplined company that is easier to run,” Johnson Controls CEO Joakim Weidemanis said on the company’s Feb. 4 earnings call. “You can see that impact clearly in the places where technology demonstrates its value today: energy efficiency and decarbonization.… In an increasingly energy-constrained world, where energy costs continue to rise, our customers are under pressure to manage energy more effectively, reduce their carbon footprint, but also need strong operational returns.”
Dive Insight:
Johnson Controls’ systems orders grew 84% year over year in its Americas region, leading to a 26% increase in its systems backlog in the quarter. A sharp increase in the company’s fiscal first quarter was largely due to success in the technology-intensive data center environment, Weidemanis said. He noted that as architectures continue to change across AI and high-density compute environments, significantly greater thermal and energy management requirements will persist.
“Managing energy consumption while sustaining performance is essential, and that is exactly where our technologies remain critical,” Weidemanis said. “Against that backdrop, our data center momentum reflects not only strong demand from existing customers but also success in reaching new customers as our differentiated solutions gain traction.”
The CEO pointed to Johnson Controls’ close work with NVIDIA, where it is applying thermal management and control expertise to support next-generation AI compute environments, resulting in a recently released reference guide that models the full thermal chain and outlines scalable high-performance cooling architectures for an emerging class of “AI factories.”
The company also released two new chillers this week aimed at expanding its leadership in the high-density data center cooling market, Weidemanis said.
The first, the YORK YK-HT two-stage economized centrifugal chiller, is engineered for data centers and large industrial, pharmaceutical and healthcare campuses and operates with condenser leaving fluid temperatures up to 165 degrees Fahrenheit and up to 110 Fahrenheit of lift, the company said in its product announcement. The chiller delivers the industry’s widest operating range from a single driveline, which supports efficient closed-loop heat rejection with dry coolers and enables heat-pump and heat recovery applications, the company said.
By reusing thermal energy that would otherwise be wasted, the system can offset more than 35 MMBtu per hour, equivalent to the heating demand of approximately 350 single‑family homes per hour, while lowering carbon emissions and reducing energy costs, it said.
The second chiller, the YORK YDAM air-cooled magnetic bearing centrifugal chiller, is purpose-built to overcome the complex space and site challenges in high-density, multistory data centers that are becoming more common due to land constraints, the company says. The chiller has 3.5 megawatts of cooling and delivers up to 20% more capacity density in a footprint that is more compact than competing solutions — and fits on a 53-foot flatbed, making it easy to ship, Johnson Controls said.
“Multistory data centers and AI factories are becoming more common, increasing the density of the white space (where the racks live) by up to 10 times,” Johnson Controls said in its release Wednesday. “Data center leaders therefore need higher density thermal management solutions to fit a shrinking roofline.”
These new chillers will be supported by the company’s new Smart Ready Chiller digital service, which Weidemanis said provides 10 times the insights over a standard remote connected chiller. “This gives us and our customers deeper insights from day one,” he said, “allowing us to shift more customers into proactive, recurring service relationships that improve reliability, reduce unplanned downtime, and lower life cycle costs.”
In addition to data centers, the company saw strong order growth in the life sciences sector and mission-critical verticals, Weidemanis said.
“With the rise of biologics-based therapies, the manufacturing environments are materially different … and that's why large pharmaceutical manufacturers are building new plants in many parts of the world,” Weidemanis said. “And the indoor operating conditions that they require to be able to effectively manufacture these biologics-based drugs really require very strong thermal management, which is not just HVAC, but also controls.”
The large campuses operated by these companies, with thousands of employees moving in and out every day, also requires other solutions from Johnson Controls portfolio, encouraging further progress in the life sciences sector, Weidemanis said. “So [we’re] very encouraged by our continued progress in life science.”
