We'll now hand the call over to Mike Gates, Senior Director of Investor Relations, to begin. Mike, please go ahead. Good morning, and thank you for joining our conference call to discuss Johnson Controls fiscal first quarter 2026 results. Joining me on the call today are Johnson Controls Chief Executive Officer, Joakim Weidemanis, and Marc Vandiepenbeeck, our Chief Financial Officer. Before we begin, let me remind you that during our presentation today, we will make forward-looking statements that reflect our current views about our future performance and financial results. These statements are based on certain assumptions and expectations of future events that are subject to risk and uncertainties. Please refer to our SEC filings for a list of these important risk factors that could cause actual results to differ from our predictions. We will also reference certain non-GAAP measures throughout today's presentation. Reconciliations of these non-GAAP measures are contained in the schedules attached to our press release and in the appendix to this presentation, both of which can be found on the Investor Relations section of Johnson Controls' website. I will now turn the call over to Joakim. Thanks, Mike. Good morning, everyone. Thank you for joining us on today's call. I'd like to begin by recognizing our 90,000 colleagues around the world for their commitment to our customers and for the contributions they've made to a strong start to the year. Let's begin with slide four. Johnson Controls enters 2026 with a solid foundation and more disciplined execution across the portfolio. Our first quarter performance reflects the progress we've been making, with strong revenue growth, meaningful margin expansion, and broad-based strength across the enterprise. We are still in the early stages of this work, but I'm encouraged by the progress we've seen to date. As we begin deploying our proprietary business system more broadly, leaders are displaying better candor and assessments regarding where we have opportunity and how we address those opportunities through our business system approaches. We're seeing this firsthand in Gemba Walks, in our manufacturing plants, in our field offices, in operating areas across the business, and even in corporate. Turning to the results. The quarter delivered ahead of expectations. I'm proud to share that orders increased nearly 40%, building on a very strong 16% last year compare. Revenue grew 6%, adjusted EBIT margins expanded 190 basis points to 12.4%, and adjusted EPS was up nearly 40% and exceeded our guidance. Our record backlog gives us strong visibility and reinforces the demand environment we're seeing. These results reflect the strength of our leading technology portfolio, combined with more disciplined execution across the company. Given the strong start to the year and the momentum we're seeing across the business, we are raising our full year guidance. Marc will walk through the details in just a few minutes. This quarter marked an important step as we continued to provide much greater clarity on our direction and introduced our evolving enterprise strategy and priorities to leaders across the company. We cascaded and aligned goals across the organization to a focused set of enterprise-wide metrics. This gives every team a clear line of sight of their priorities, aligned with our definition of winning, one that is rooted in winning more customers and better enabling our colleagues, especially those on the front line. This alignment is essential to how we operationalize our strategy, where we focus our commercial resources, where we direct our R&D investment, and where we concentrate execution resources to create the most impact and win with customers. We are building a faster-growing, more profitable, and more disciplined company that is easier to run. We do that by focusing our efforts to parts of the market where our strengths in technology and field presence align with our passion to advance human society. You can see that impact clearly in the places where our technology demonstrates its value today. Energy efficiency and decarbonization, where factories, large campuses, and buildings are some of the largest consumers of energy and among the biggest contributors to global emissions. In an increasingly energy-constrained world, where energy costs continue to rise, our customers are under pressure to manage energy more productively, reduce their carbon footprint, but also need strong operational returns. Turning to the next slide. This couldn't be more evident than in the fast-growing, most technology-intensive environments, such as data centers. As compute becomes more powerful, rack densities rise, hybrid architectures evolve, and control systems become more advanced, data centers now require increasingly energy-efficient and precise operating conditions. Across AI and high-density compute environments, architectures will continue to change, but they all share the same fundamental requirement: significantly greater thermal and energy management, supported by more sophisticated controls. Managing energy consumption while sustaining performance is essential, and that is exactly where our technologies remain critical. 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. We continue to work closely with NVIDIA, applying our thermal management and controls expertise to support next-generation AI compute environments. Johnson Controls recently released a new reference guide that maps the full thermal chain and outlines scalable, high-performance cooling architectures for an emerging class of AI factories. The guide outlines an integrated solution that leverages technology to accelerate data center deployment and increase their overall performance. Going beyond just supplying equipment, we are architecting the thermal backbone for the next generation of AI computing. It also reinforces the strength of our innovation roadmap, reflected in the products we introduced earlier this week. We announced two new chiller platforms that extend our leadership in high-density data center cooling. The YDAM delivers up to 3.5 MW of cooling in a compact footprint, providing approximately 20% higher capacity density than competing options and enabling warm water cooling for advanced GPUs. The YK-HT brings the industry's widest operating range and supports waterless heat reduction, which can eliminate up to 9 million gallons of cooling tower water annually in typical deployments. Complementing these data center platforms, we also expanded our digital service capabilities with the introduction of the Smart Ready Chiller, which provides 10 times the insights over a standard remote-connected chiller. This gives us and our customers deeper insights from day one, allowing us to shift more customers into proactive, recurring service relationships that improve reliability, reduce unplanned downtime, and lower lifecycle costs. Together, these launches build on an already strong and comprehensive portfolio, making it even more capable and more differentiated for our customers. In addition to the data centers, we see similar demands for energy efficiency, precision, and reliability across other Mission-Critical sectors. Advanced manufacturing, where, for example, next-generation pharmaceutical manufacturing relies on precise environmental conditions, meaning strict control of temperature, humidity, pressurization, and air purity, and large, complex research campuses and universities, where similar requirements exist as researchers discover new insights and translate science into real-world applications, and where students are learning, exploring, and preparing to make their own impact. Our customers have real unmet needs for technology innovation and service-based solutions that help them manage energy more efficiently and deliver outcomes in their Mission-Critical operating conditions. This is where our strengths set us apart and where we concentrate our investment and innovation. This is exactly what gives me the confidence in the opportunity we have here at Johnson Controls and the ability to support our customers. When I went to Gemba, I saw breakthrough innovation happening at JADEC, our advanced development engineering center in Pennsylvania. Work built on YORK's 150-year legacy of pushing the boundaries of HVAC and thermal technology for today's data centers. After also spending time with our field professionals, it became clear how much potential we can unlock by making their daily work easier and better leveraging their expertise and proximity to our customers. Turning to slide six. This is where our proprietary business system will help us unlock that opportunity. As a reminder, our business system is built on three pillars: Simplify, apply 80/20 principles to focus on what matters the most. Accelerate, use Lean methodologies to remove waste to speed up execution, improving productivity and reducing assets such as working capital tied up in the process. And Amplify, leverage digital and AI approaches to amplify impact across the enterprise. I think of it as Accelerate or Lean helps us accomplish work in days and hours versus weeks and days. Amplify or digital and AI enables us to take that same work and accomplish the same in hours and minutes. It's anchored in a global cross-functional language and methodology for how we communicate, collaborate, and drive strong, continuous improvement momentum to win. We're already seeing evidence of the business system in the way teams operate, stronger alignment, clearer ownership, and greater process and tool consistency. Our talent system also plays an incredibly powerful role in this. We've brought in select external talent with deep business system expertise, while also teaching and equipping our internal colleagues to lead in this new way of working and beginning to embed across our end-to-end talent processes. To date, we have hosted growth summits with hundreds of leaders, diving deep into our enterprise strategy and hands-on teaching, leaders teaching leaders, our business system. This includes a global summit with our most senior leaders, and we're now spending time in each region to ensure full understanding, clear expectations, and accountability for this new way of working, all focused on enabling our frontline colleagues to deliver more for our customers. As part of this, we started the new year in APAC with all the regional leaders. I spent significant time in that region in my professional life and see great opportunity, particularly aligned with our strategy and where we have strengths. To further accelerate our progress and strengthen global execution, we recently appointed Susan Hughes as our APAC president. Susan brings more than 20 years of deep experience in the region, and I'm excited for the impact she'll have as we align our teams and sharpen our execution. Let's now turn to slide seven to show how our business system is taking hold and the progress we're making across the company. By working together across teams and leveraging 80/20 and Lean tools, we're seeing real, measurable progress. Last quarter, I shared some examples, but I'm proud to illustrate continued improvement. Our conventional HVAC sellers in one of our local markets went from 60% improvements in time spent with customers to 100% improvement. And as we bring AI into these workflows, we see the potential for another meaningful step change, one that simply wouldn't be achievable without AI. In one of our key manufacturing facilities for chillers, our factory on-time delivery went from 95% to now sustaining 95%-100% for the past couple of months. This level of performance, combined with our now competitively advantaged lead times, is driving higher win rates with our customers, especially in data centers, as we can reliably commit to help them meet their rapidly growing needs. These are just two examples where we go narrow and deep on an area of opportunity. Our teams are going deep and addressing other areas of opportunity, from cutting service repair time, to improving quality, and addressing billing disputes. The benefit only continues as we scale these learnings more broadly in the organization over time. I'm inspired by the energy, the urgency, and the enthusiasm with which our leaders and teams are embracing this new way of working. More than 1,000 colleagues have actively engaged across several priority areas. Over 80 kaizens have been completed, and 350 senior leaders have been trained in the new ways of working. And while many of our early focus areas started in the U.S., as we teach and equip our leaders, we have now activated efforts in both EMEA and APAC. This way of working gives us confidence in our ability to execute and deliver on our commitments. With that, Marc will lead you through the details. Thanks, Joakim, and good morning, everyone. We delivered a strong start to the year, reflecting continued momentum in the business. Our teams converted sustained customer demand into record orders while delivering solid operating performance. We are also seeing early benefits from the operating discipline we've been embedding across the company, which is helping us execute faster, improve consistency, and strengthen profitability. With this foundation, we are well-positioned to deliver on our priorities and achieve on our full-year commitments. Let's turn to slide eight to walk through the financial highlight for the quarter. Organic revenue grew 6%, with growth-based contribution across the portfolio, and we delivered solid margin expansion. Segment margins increased 70 basis points to 15.7%, and EBIT margin expanded 190 basis points to 12.4%, reflecting continued benefits from productivity, price realization, and improvement in our cost structure. Adjusted EPS of $0.89 increased nearly 40% year-over-year and exceeded our guide. Our ongoing work to simplify priority, strengthen alignment, and sharpen operational discipline is driving faster decisions, stronger pricing, and tighter cost control, supporting both growth and margins. Let's now discuss our segment results in more detail on slides nine and 10. Orders grew nearly 40% in the quarter, a strong performance on top of a tough 16% compare. Demand was led by data center projects, where customers are accelerating investment to support higher-density workloads and AI-driven growth. Activity across our other key end markets remains stable, and customers continue to prioritize Johnson Controls' differentiated Mission-Critical solutions. By region, this demand strength translated into solid orders across all three segments. The Americas delivered 56% growth, led by large-scale data center projects that continued to scale across the region. EMEA grew 8%, with balanced high single-digit growth in both service and system. In APAC, orders increased 10%, driven by double-digit growth in systems and high single-digit growth in service. At the enterprise level, organic sales growth was led by continued strength in service, which grew 9% year-over-year. In the Americas, sales were up 6% organically, with solid double-digit growth in service. EMEA grew 4%, led by high single-digit growth in service. APAC delivered 8% growth, led by strong system performance and steady demand in service. These results reflect strong execution across the portfolio, despite a challenging 10% year-over-year comparison. We delivered another quarter of steady margin expansion, reflecting disciplined execution across pricing, productivity, and project delivery. Our teams strengthened operating leverage in both service and systems through higher throughput, tighter cost control, and more consistent execution. These actions reinforce the continued strengthening of our operating model and our ability to sustain meaningful margin progress. By region, adjusted segment EBIT margins in the Americas improved 20 basis points to 16.4%, supported by productivity gains and improved mix. In EMEA, margins expanded 120 basis points to 13%, reflecting favorable pricing and productivity gains. In APAC, margins expanded 290 basis points to 16.9%, as volumes increased and factory absorption improved. Our record backlog grew 20% to $18 billion, highlighting the continued strength of our pipeline as revenue conversion accelerated this quarter. Turning to our balance sheet and cash flow on slide 11. On the balance sheet, we ended the quarter with approximately $600 million in available cash. Total liquidity remains strong, supported by our available credit facilities and disciplined working capital management. Net debt remained within our long-term target range, declining to 2.2x. Our capital allocation priorities remain consistent: investing in the business, maintaining balance sheet strength, and returning capital to shareholders. Let's now discuss our fiscal second quarter and full year guide on slide 12. As we enter the second quarter, operational momentum remains solid, supported by disciplined execution and continued strength in our backlog. We anticipate organic sales growth of approximately 5%, operating leverage of approximately 45%, and adjusted EPS of approximately $1.11. For the full year, we are maintaining organic sales growth of mid-single digits, supported by solid execution and the visibility provided by our backlog. We continue to expect operating leverage of approximately 50%, which is above our long-term algorithm, as last year's trended cost saving materializing this year's performance. With the strong start to the year, we are raising our adjusted EPS guidance to approximately $4.70 per share, which is roughly 25% growth. With the increase in our EPS guidance, we continue to expect approximately 100% free cash flow conversion for the year, underscoring the quality of our earnings and the discipline of our working capital processes. Our guidance reflect the progress we're making across our operating priorities and provide a solid foundation for delivering strong result throughout the remainder of the year. Operator, we are now ready for questions. Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to remove your question, please press star followed by two. When preparing to ask your question, please ensure your phone is unmuted locally. We ask you, please limit yourselves to one question and one follow-up. The first question goes to Nigel Coe of Wolfe Research. Nigel, please go ahead. Thanks. Good morning, everyone. Thanks for the question. Yeah, so I think that a good place to start would be on the orders. I don't know if this is a record order quarter, but I'm sure it's pretty darn close. Anything that you'd call out, because we've seen extraordinary strength in other places in data center, but this is like another level higher. So just curious, are we seeing more kind of longer duration orders, multi-year orders? Anything you'd call out, you know, driving the strength in orders? Hey, Nigel. We are seeing record orders, as you saw. We have a record backlog, and we'll try and keep it like that going forward, too, by the way. I'm super happy that it's not only data centers that's driving the strength of our order entry. We had a very healthy life science order entry during the quarter, and that's not the first quarter that we see that strength. And that's really a result of, you know, all the effort being put into the innovation pipeline over the years, as well as the field coverage for what we call our Mission-Critical Verticals. You know, where thermal management and the indoor operating conditions really matter for our customers. Now, data centers was very strong and, some very, proud of, of the team, what they accomplished during the quarter. Pipelines remain healthy, and, as a reminder, you know, we really play in, in, three categories broadly in data centers. Not just on the chiller side, but on the crawls, the air handling units through our Silent-Aire franchise, which is the leading franchise in air handling. And as you know, a couple of quarters ago, we announced that we entered the CDU space, where we're making some good progress. So, very pleased overall with the, with the order entry, but data centers is definitely not the only vertical that's, showing really, really good strength here. Great. Thanks, Joakim. And then my follow-on is, I believe the backlog reflects orders that are shippable for the next 12 months. So the—obviously, the backlog increase, I think 20% was the number, if I'm not mistaken, versus the unchanged mid-single digits for this year. So just wondering how to think about that, inflection in backlog versus non-inflection in organic growth. I'm just wondering if we're starting to see a line of sight towards, you know, high single digits organic growth. You know, our I think the organic growth will continue to strengthen over time. You know, our guide currently reflects what we see for this year. Many of those larger orders that we're taking also in the life science field, but in data centers are not necessarily shippable, you know, within the next nine months or so. But we'll keep you updated on the guide here as we see opportunities to do better here, potentially. Thank you. The next question goes to Amit Mehrotra of UBS. Amit, please go ahead. Thanks. Morning, everybody. I just wanted to follow up on the orders question, if I could. And just understand, you know, how much of this order strength is, you know, the market coming to you as opposed to maybe how you're evolving, how you go to market? And I know, you know, last time we chatted, there was maybe some initiatives underway to kind of go after, what you guys call the belly of the market. Is that indicative of the orders? And then just related to that, Joakim, any numbers you can provide around the non-data center growth, just so we can understand a little bit how broad-based this is? Yeah. So I think the data center market is growing in many different parts of the world and in different applications as well. So our growth is pretty broad-based. So like I said, you know, we play in three different application categories: the chillers, the CRAHs, the air handling units, and now starting to grow nicely here on the CDU side as well. So historically, we had a good position with our hyperscalers, as well as many of the large colos, in particular in the United States. But, you know, over the last couple of quarters, we're very happy to see the growth in Europe and Asia also start to become very meaningful for us. Like I said in my previous comment, you know, our orders strength in the quarter here is of course helped by data centers, but we're also very happy about in particular the life science-oriented growth that we're seeing. And just to put a little bit more color on that, you know, what's happening in the pharmaceutical industry is that with the rise of biologics-based therapies, you know, the manufacturing environments are materially different than the historical manufacturing environments, and that's why, you know, large pharmaceutical manufacturers are building new plants in many parts of the world. And the indoor operating conditions that they require to be able to effectively, you know, manufacture these biologics-based drugs, you know, really require very strong thermal management, which is not just the HVAC but also controls. And because these are large campuses with thousands and thousands of employees moving in and out every day, and the value of what they manufacture is very high, it also requires other solutions in our portfolio. So, very encouraged- Right ... by our continued progress in life sciences. That, that makes sense. Thank you. And then just one, my follow-up, Marc. I wanted to ask about second half versus first half incremental margins. You know, obviously, you have a full year of 50%+, you'll achieve or have achieved in the first quarter, second quarter, maybe about 40%-45%. It does imply kind of this nice step up in the second half above 50%. Can you just talk about that, and maybe what are the drivers of that step up are in the second half? For sure. We can maintain the full year roughly 50% operating leverage outlook because the structural driver of our leverage build materially around the year, and as reported by, of course, the backlog and the backlog margin, the visibility we have that, and the margin expansion that come, but also the work associated with the trend at cost and it's all inflecting in the second half of the year, and that leverage continues to improve. You know, that 50% is based on our mid-single digit perspective on top line growth, if we can accelerate that top line growth, not all of that incremental growth will come at an operating leverage in the 50s. It will probably come closer to our long-term algorithm, well above 30%, but maybe not at the 50% range. Thank you. The next question goes to Steve Tusa of JP Morgan. Steve, please go ahead. Hi, good morning. Thanks, Steve. Please proceed with your question. Hello? Can you hear me okay? Yes. Yes, we can hear you, Steve. Hello, can you hear me okay? Great. Thanks. Sorry. Just on the North America margin was just a little bit lighter. I hate to nitpick 'cause they were really good results on, especially on orders. The North America margin was a little bit lighter. There was a $15 million headwind from other. Maybe that was something we're missing from the comp from last year or something like that. Maybe just touch on how you see North America margin trending in the next couple of quarters- Yes ... and anything there from the quarter. So if you look at the growth in North America, right? Very strong system growth, strong service growth as well. That mix, you know, normally would be lifted by much better growth in the service, thanks to the rate. And we saw some benefit associated to productivity. Overall, the opportunity in North America is accelerating our service growth and the margin rate that comes with that. You know, that there was a few smaller headwind in the quarter in North America, about $15 million we tag as other. That more has to do with some periodic small adjustment we do on product liability. Those are just reserve we adjust over time. Not something material, not something recurring. We think North America margin potential continues to be strong and will probably come slightly better than what you saw in the quarter in the second half. Great, thanks. And then just one on data center. Where are your lead times stand today? The next question goes to Scott Davis of Melius Research. Scott, please go ahead. Scott, I Hey, guys. Yeah ... is Steve- Yeah, hey. I'm- Steve, still on there? Yeah, we are. Operator, can we please ask you to take command here? Steve was asking his follow-up question, so let's allow Steve to do that, and then, Scott, we'll go to you right after. No worries, guys. Thank you. Operator, can you please step in? Okay, Scott, if we have you on the line, please go, please go ahead. I will act as the interim operator. I could call Steve and ask him what his question is, but... Go ahead, Scott. No, sorry about that. But look, yeah, I'm kind of curious, the entrance into CDUs. Is the goal here to kind of bundle this into a total solution that, you know... I would imagine it's still a separate purchase order right now and perhaps even a separate process altogether, but what- Yeah ... where do you kind of see that market going for you guys? Today it's a mix, Scott. So there are certainly a lot of business that transacts, you know, CDUs only. But we do see plenty of opportunity for combined offers, and obviously we have a number of very important key accounts. So, you know, we work on more than one application together with them. You know, over time, as the thermal architecture for data centers evolve, as is normal, I think in a complicated system like that, you might see some slight changes in the overall architecture. So the roles that certain devices play today might evolve a little bit over time. I think that's, of course, why we chose to add CDUs to our portfolio, to be able to lead in that and be able to be a player that helps our data center customers with the most optimal and highest performing thermal architecture, not just for today, but in the future as well. Okay, fair enough. And then, Joakim, you mentioned that you were just in Asia Pac. Not sure if it's a big, broad region, so I'm not exactly sure where you were, but perhaps since you were there recently, you could just tell us what you're seeing on the ground, because clearly- Yeah ... we're seeing a broad set of different results. Yeah. You guys were a little better than most people this quarter. Right. Yep. Yeah, so I was. I'm not going to say I was all over the region, but I was in all the- Right ... major markets, a number of, of, countries. So in our case, we are seeing continued stabilization in China and, part in our business. And part of that, of course, is that we have worked hard on shifting a little bit, on what the mix of which verticals we focus on in China. And so I think we're in a better place now. Our commercial teams are more aligned with where there is still growth and, you know, our service business there. We have continued to invest in, and so we see that as a continued good opportunity. So we see stabilization in China, but unlikely that China is going to return to the kind of growth rates we saw in past years. But what's exciting is that, of course, it's no secret that there are some other major economies in the region that have continued to strengthen overall. And so I think we have, you know, a really strong, good team on the ground in a number of countries in Southeast Asia and as well as India. And some of these countries, of course, they're all looking at data centers. And there are several emerging players in these markets, but in terms of, for example, you know, investments in healthcare, hospitals, and pharmaceutical manufacturing, that's also a growth driver for us in a number of those countries there. So I'm super excited about our prospects here in Asia. Stabilization in China, and then growth opportunities in major economies elsewhere. Okay. Helpful. Best of luck the rest of year, guys. Thank you. Yeah. Thank you. Thank you. Moving back to Steve Tusa of JP Morgan. Steve, please go ahead. Yeah, thanks. That was, That's a quality move. Thank you, for letting me back in. I appreciate that. Just the data center lead times, where are you now? And then, Marc, if you just could give us a little bit of color on what BMS did in the quarter. We're trying to tease out kind of the like for like applied orders growth. You know, the BMS kind of orders would, I would think, be lower than what applied was, maybe not, but, maybe those two follow-ups, and, thanks again for letting me back in. Yeah, sure. Lead times, you know, I gave the example in the prepared remarks here. So we're making good, good progress on the on-time delivery, and that's on-time delivery as requested by customers, right? So by definition, that is then being predictable within the lead times that the customers are asking for. We continue to sustain, and I talked in previous calls about how we cut, you know, lead times in half for one of our product lines in a factory. And that work is now being cascaded out to the other product lines in that factory and other factories. And we did hire a new VP of operations a couple of months ago. And you know, he and his team are now ramping, you know, very, very nicely. And we were reviewing it just the other day. I'm really excited about what I'm seeing from our operations teams, not just in terms of short-term results, but the aspirations and where we think we can get to, you know, not next year, but this year. So, you know, more to come on that. And I think in a little bit of a, you know, an environment like we have in the data center market right now, the ability to being able to deliver not just predictably, but fast, is part of, you know, one of many things that contributes to our competitive advantage. So, And then BMS, yeah. BMS, go ahead, Marc. So the BMS growth in the quarter was, I would characterize very solid, in the high single-digit rate. We feel very strong about the backlog of that business because it's continued to improve. The pipeline of opportunity is also accelerating, aligning a little bit with the strategy we laid out at the beginning of the opening comments around our Mission-Critical, and how a strong BMS controls offering for those particular specific vertical is really resonating well with the customer, and we think we can continue to improve that business nicely over the next few quarters. Thank you. The next question goes to Jeff Sprague of Vertical Research. Jeff, please go ahead. Hey, thank you. Good morning, everyone. Hey, I wanted to come back to the new products, Joakim. You know, it's just kind of interesting how sensitive this market is, right? You might argue your stock has been weak year to date because NVIDIA scared people about warm water cooling, you know, and here you are with, you know, an offering, right? So, you know, clearly, you're in the loop on product development. You mentioned reference designs. Maybe just for the benefit of all of us, just, you know, a little bit more detail on, you know, where you sit in sort of the technology path, the forward planning, understanding what's coming down the pike, and, you know, how you're... You know, we're not surprised by this, but in fact, we're prepared. Yeah. Hey, good morning, Jeff. I won't comment on specific product launches in the future. But the reference designs that, and there are two documents that we—guides that we issued to the market, and these reference designs for, for those of you who don't know, they're really for the benefit of data center designers and operators as they're working on designing the next generation of data centers. And that kind of work, you know, we did a lot of work with NVIDIA, and so some of the guides that we published here is in collaboration with NVIDIA. Of course, beyond those documents that we publish, an element of how we work in this industry is we essentially, every other week, have large engineering teams from our largest customers, colos and hyperscalers, who sit with us in our innovation center in JADEC in Pennsylvania, to collaborate on, you know, what the next generation of designs should be based on the learnings so far. And that helps feed our innovation pipeline. And it's really an excellent way where we can combine our deep technological know-how and thermal management, represented by, you know, our very talented people in that innovation center, with the people who are actually using the products from our customers, and then apply the technologies that we have in more and more competitive solutions. And so you saw a couple of launches here earlier this week at the big show that's ongoing as we speak here. And we have a significant roadmap behind that. And as you remember, we play in three categories in data centers when it comes to thermal management: chillers, air handling units, mainly through our Silent-Aire franchise, but beyond that as well. And then we entered CDUs, and then, of course, we're in the controls system as well. And so there's a lot more to come, Jeff, and we'll keep you posted as we launch these new products. Great. Appreciate that. And then maybe just a different thread here. Just on the kind of the portfolio review, Joakim, that I would assume that's still ongoing, but it also looks like the retail business did not close yet. I thought that was sort of pending and close to being done. Maybe the stuff that you've already publicly identified to go, where are we in those processes? And any other update would be appreciated. Yeah. So we continue. I think I've commented on that in the past, but we have undertaken a thorough strategic review of our entire portfolio. You know, we've worked with the board and calibrated and aligned on what we think is appropriate, and to do, and that includes both how we can execute better as well as potential alternative futures. And we've commented on a little bit, you know, how big part of the portfolio that might entail. And you know, the main driver here is to create shareholder value, and so we continue to work on both improving execution and on the portfolio moves that we flagged in the past. And we'll keep you posted as- Yeah ... we make progress on that. I'm not gonna comment on particular ongoing transaction. We have not announced anything particular on retail. We are very happy that we closed the disposition of one of our residential monitoring security system as we continue to walk away, if you'd like, from that particular subsegment of the market. The next question- Operator - goes to Chris Snyder of Morgan Stanley. Chris, please go ahead. Thank you. I wanted to talk about the longer-term margin opportunity for the company. You know, I think when we look at the model, you know, we can see the SG&A as a percentage of sales is quite high compared to the competitor. So I think it's, you know, understandable, the opportunity there. But can you talk about the opportunity on gross margin? Just because the company is already running above the industry, it seems like on the gross margin line. So can you just kind of talk about entitlement there? What is the opportunity to kind of grow that into the coming years? Thank you. Hey, how are you? Yeah, that's a topic we've discussed in the past, and yes, our gross margins are running a little higher than some of our direct peers. I see opportunities there. I think we've discussed with at least some of you and some of your events the opportunity, for example, in footprint consolidation in our manufacturing setup. And there's also an opportunity to continue to drive better productivity in our field on the service side of things. You know, you should think of the example that we've talked about in our the work we've done with the business system, with our HVAC sellers, where we've been able to more than double the amount of time they spend with customers and selling. You know, we have that kind of opportunity that we're already working on in a couple of our markets with our service team. So I still see healthy runway to improve our gross margins. And then on SG&A, maybe, you know, on the A side of that, I mean, we are working away at just simply reducing our costs. You know, we are a smaller company than we were when we owned retail, and there continue to be cost reduction opportunities on the administrative cost of the SG&A. On the S side and the R&D spend within SG&A, you know, on the S side, I'll refer to the example with the HVAC sellers. We think we can decouple the future growth from top line growth from the growth of the SG&A costs by applying the business system and exactly the way we outlined it in the example that we gave. You know, basically, help our sellers help them do their job, double the amount of time they can spend with customers. Meanwhile, though, on the R&D cost, you know, our ambition is to significantly, and we have already this year in our plan, and it's embedded in the guide, started to ramp up our spend in R&D, and that's going to continue to increase at a very healthy rate here going forward. And, but we'll still be able to drive margin expansion because of the types of things that we're working on that I gave you examples of here. So still, still unchanged view versus what we've talked about in the past. I see no reason for us not being able to achieve the segment EBIT margins that our best performing peers have. And I think over time, we should be able to even go beyond that. And obviously, they are not sitting still. We recognize that, and they are extremely capable, so we know that's a moving target, but our opportunities are plenty here. Thank you. I really appreciate that. And then if I could maybe follow up on labor availability in the market, and particularly how it impacts the service business. You know, obviously, labor seems like it's still tight out there. When we see these orders and growth numbers, it feels like it will continue to get tight. You know, has there been any change from your perspective in the ability to kind of either recruit or retain service professionals? And is this becoming a growing competitive advantage for a company like JCI, who already has, you know, such a big, you know, technician base compared to some other smaller competitors or upstarts in the market? Thank you. Sure. I think the availability of service labor has been a topic for the last 15 years, so that's, it's hardly a new phenomenon. That's why, you know, so many companies, including ours, you know, have been working on for several years. But now we've accelerated on looking at how we can make our teams that we already have in the field much more productive. Again, you know, think the example of how we can double the amount of time the salespeople spend with customers. We can do the same thing, and we're working on a similar thing with our service team. And that's process work, but it's also in a much better way, leveraging, you know, the connected installed base that we have. You reconfigure a little bit how work is done field versus the office. So there's plenty of opportunity, lots to go at there. Now, we do have, like you pointed out, a significantly larger field force than many of our peers, and that is an advantage. So we want to make sure that we make them more capable, more productive, but we're also wanting them to provide even more value to our customers. So over the next couple of quarters, you know, we're working on a number of service products offerings that we don't have today that we'll be launching to the market, and you'll hear more about that in the future. So, we're happy to have that advantage to be able to leverage, but we have to leverage it in a much better way, doing the kinds of things that I was talking about here. Thank you. The next question goes to Julian Mitchell of Barclays. Julian, please go ahead. Hi, good morning. I just wanted to start off with slide nine and 10, just to try and understand, I guess, the tie in of the systems orders to the systems revenue. Because, again, with that very high order growth and your lead times of you've made good progress bringing those down, would have thought you'd get some translation of that into revenue this fiscal year. So is it the case that the customers are specifically placing orders that are very long dated? And I also wanted to understand what you used to call products. Is that still not in the order numbers on slide nine, and anything to call out with what's happening with products? Yeah. Thanks, Julian. So, yeah, the backlog strain is very encouraging. But the mix of that backlog and the timing of the broader portfolio dynamic today only supports the mid-single-digit guide we're providing. I would say we started the year on the lower range of that mid-single-digit range. And I think we are gonna print the second half on the higher half of that range, the better half of that range. And if you look at the content of that backlog, all of it could be shippable, right, in the next 12 months. But a lot of it depends on customer availability and customer ability to accept that orders. And the way the dynamic works with some of our larger relationship is, it's an ongoing conversation with those customers. The quicker they can take it, the quicker we can turn revenue. There's obviously at a certain level of growth, a capacity constraint, but we don't believe we've reached that capacity constraint just yet. There's opportunity to improve there. But overall, we think that the backlog continues to support a solid mid-single-digit revenue guide. What I would say is if you continue to unfold that backlog beyond the next 12 months, I think we'll be very comfortable to start talking about a slightly better growth than what we've seen maybe in the prior quarter. The next question goes to Andrew Obin of Bank of America. Andrew, please go ahead. Hey, guys. Good morning. Can you hear me? Hi, Andrew. Yes, we can. Thank you for asking. Yeah, good morning. Yeah, of course. Just a question, I mean, clearly, improving throughput has been a key KPI for you, and, you know, I think I'm trying to figure out this order thing as well. Should we think that there is a relationship with freeing up more capacity and your ability to take more orders in the near term? Yeah, absolutely. So, on the capacity, you know, we made significant investments in physical plant and machinery before I joined the company. And, so we more than tripled our physical capacity. And then with the lean work, the business system work, you know, there's an opportunity to keep expanding that capacity materially, very materially, without having to spend the same amount of capital. You know, we may need a little bit of capital here and there, but nowhere close to what we spent in the past. When larger customers are negotiating or looking at placing larger orders for, you know, number of data centers that they're planning over the next couple of years, one of the factors they do look at in vendors is their ability to deliver, and it's the reliability proof points, and the ability to turn things around quickly. That doesn't mean that they need things, you know, in six weeks from now. They're simply very super realistic about their own ability to plan ahead and manage all the construction work and so on. So they know that their plans may change as the project progresses, and then they need a partner who can react quickly and be flexible on the factory side. So that's kind of where both the capacity, the lead times, and the reliability of the on-time delivery come in. So yeah, it's definitely part of a competitive advantage in this game that we're playing. Just a follow-up question on slide six. I mean, clearly, you're highlighting this product introduction. I think a lot of us were in Vegas and saw specifically YK-HT product, which I think is very important for you in lead product in the competition. Are we seeing the impact of these product introductions on your orders this quarter, or is this still on the come? I think there's. It's very minor in the orders that we've taken so far. So it's more about what's to come. And by the way, those launches, I did get a note from the team, so thanks for thanks for stopping by and spending time with our team there. All those new products, I mean, they are a result of the work that we do together with our customers. You know, I alluded to it earlier this morning. You know, we have large engineering teams coming in from our customers, and that sit with us for a week, 10 days, and so we're creating the new roadmap, product roadmaps, you know, basically off of what they have learned by applying ours and other people's products. So that's why we're so excited about the launches that we have, because we know that these precise needs are there, and we will be able to see that in our order entry. I expect, you know, already here ramping in the quarter we're in already. The next question goes to Joe O'Dea of Wells Fargo. Joe, please go ahead. Hi, good morning. Just on the capacity expansion and the tripling of physical capacity, and is that specific to chillers or includes air handlers, just any specificity around it in kind of global versus Americas? And then, you know, really just in terms of the fixed cost impact that that has today, any quantification of a burden today and sort of how you see that improving, you know, over the next twelve months or so? Good question. The answer is that, you know, we have had invested in capacity across the board, meaning chillers, air handling units, and, because of the investments in the air handling units capacity. We also made room for the CDU business that we launched into here a couple of quarters ago. The fixed cost aspects of those investments have already been in our run rate for more than a year. Presumably, that's a tailwind kinda each quarter in terms of utilization? It creates leverage opportunity as the volume comes in. Moving forward. Absolutely. Yeah. Yeah. Yeah. Yeah, Yeah. Yeah, and as we continue to- Yeah ... work on the lean work to eke out more capacity without adding fixed costs, yeah. Thank you. The next question goes to Andy Kaplowitz of Citigroup. Andy, please go ahead. Hey, good morning, everyone. Andy. Good morning. I think fire and security markets, I think you said were up like low single digits in the quarter, but as you know, a lot of that business is of a short cycle. So are you seeing an improvement in sort of more of your short cycle markets these days, you know, given where the global economy is, and specifically the U.S. economy looking a little better? I'd say there's no material change in the markets. I think the change, you know, that we are working on operationally is what you heard me talk about. I talked about the HVAC seller capacity time with customers and so on. That kind of work, you know, we've embarked on in the other parts of the company as well. And then, for those, the fire and security businesses, we're also looking over, how are we, where are we specifically pointing the effort, at what parts of the market, and trying to help that team, you know, just be more clear about, you know, our priorities and making sure that, we're behaving and in the way and pointing the effort at the most attractive parts of the market. So, like I mentioned before, when I got the portfolio question, we're regardless of what the outcome is on the portfolio, we're making sure that, you know, we improve the execution, the operational performance of all parts of Johnson Controls. I think that's helpful. Then maybe I just want to ask the sort of capacity question a different way. Like, obviously, you're getting larger orders now and to become a bigger part of the portfolio. I assume they're competitive on pricing, but what's your ability to scale these projects themselves? I mean, you know, maybe you have 50 chillers or 100 chillers in each of these orders. Can you get better margin on these individual projects moving forward? In terms of our ability to scale, we have no major bottlenecks at this point in time, at least. And to some extent, you know, larger orders have always been part of if we talk about data centers. But by the way, on the pharma side that I commented on in some of the prepared remarks here, too, some of those factory build outs are also significant, you know, projects. So, that's not a new phenomenon. And the capacity build that I talked about, it isn't just the physical facilities, it's also, you know, the resources around that: project engineering teams, project management teams, and you know, capabilities like that. So we have made those investments as well and are working on improving our ability to get more out of those teams. It's the same Lean principles we're applying in those teams as we're applying in the factories. On the margins, I mean, these are, of course, discussions where obviously, the customers ask for multiple bids. But then also, you know, there's an ongoing discussion, as you heard, of they send their engineering teams, they sit with our engineering teams, and we try and come up with solutions that really offer real tangible value, cost, less energy consumption, more cost savings, and things like that. As we do that work, we of course look at opportunities for us to also be very, very cost competitive. There's no particular margin headwind coming at us if if that's the question, we, we don't see that at this point in time. Thank you. The next question goes to Joe Ritchie of Goldman Sachs. Joe, please go ahead. Thank you. Good morning, and thanks for fitting me in. So, look, Joakim, you sounded, you know, obviously, very happy about the record order quarter. Sounds like you're pretty sanguine on the pipeline as well. If you could maybe just characterize what the pipeline of orders looks like today versus maybe 3-6 months ago. And then also, as you kinda think about your data center customers, has there been any real discernible shift, in, like, colos versus hyperscalers and where you're seeing demand growth today? Pipeline continues to remain very healthy and healthier. And it, it's not that things are just falling in our laps. You know, we're, we're working with our sales teams around the world. So in addition to the example I gave you about the doubling the amount of time that our HVAC sellers in one region are spending with customers, you know, we are also in the process of rolling out a very practical, pragmatic pipeline management approach, which basically aims to help and teach our sales leaders and our sales individual sales contributors on how to more effectively plan and spend their, their time. In my experience, having done that a number of times, what tends to happen is that, you know, you just get better pipeline growth, and over time, you are positioning yourself for even better order growth. So that's on the pipeline. And of course, the result of, as I alluded to in my prepared comments here, being much more deliberate with our teams about which parts of the market we want to go after, versus maybe not as important, that has an impact, as well. So as you shift your effort more to parts of the market that have healthier growth rates, your mix of your pipeline and order entry, of course, changes as well. And then colos versus hypers, yeah. Yeah, I mean, there are incremental changes in how certain hyperscalers or colos approach how they do business and how they buy and who they partner with and so on. But there... Look, there are no real material changes in how the big players are behaving. I think as a result of our growth in the future, it started to, but more in the future will come from also from Asia Pac and Europe. And the mix there of hyperscalers versus, let's call them local players, colos, is a little different than in the United States, not materially different. So I think if anything, you know, our data center business is gonna broaden, and I think that's a good thing. Thank you. This concludes our Q&A session. I will hand the call back over to Joakim Weidemanis for any closing comments. Thank you. And thank you for all your questions today, and thank you for those of you who visited our booth at AHR. You certainly kept our team on their toes there, so, but great, great to have you and host you there. This quarter's results reflect the momentum that's building across Johnson Controls as our teams operate with greater clarity, discipline, and consistency. And we're seeing those improvements show up in how we serve customers and in the strength of our results, as you can see. I want to thank our 90,000 colleagues for their commitment and energy. Your focus and ownership are what give me such confidence in our opportunities ahead. But I look forward to continuing my conversations with all of our stakeholders. Thank you for joining us today. This now concludes today's call. Thank you all for joining, and you may now disconnect your lines.