Johnson Controls (JCI) delivered a solid fiscal third quarter 2024, underscoring the ongoing benefits of its portfolio transformation and the growing contribution from higher-margin, recurring revenue. Organic revenue rose 3% in the quarter, led by resilient service growth and a favorable mix shift from higher-margin backlog, with total revenue of approximately $7.2 billion. Segment margins expanded 150 basis points to 17.9%, supported by productivity gains and the monetization of higher-margin backlog. Adjusted earnings per share (EPS) reached $1.14, up 11% year over year and topping the high end of guidance by $0.04, while GAAP net income was $975 million. Free cash flow was robust, with year-to-date free cash flow up about $700 million to roughly $1.3 billion, and net debt at approximately 2.3x within the company’s long-term target window of 2.0x–2.5x. Management reiterated progress on the portfolio transformation, including two major divestitures that shift the company toward a pure-play provider of engineered solutions for commercial buildings. The planned divestitures—Residential and Light Commercial HVAC to Bosch for about $8.1 billion (net ~$5 billion after tax) and Air Distribution Technologies to Truelink—represent roughly 20% of current sales and are expected to close in about 12 months with discontinued operations reported beginning in Q4 2024. In a parallel thread, CEO George Oliver signaled continued momentum in the data center vertical, with backlog approaching double-digit growth and a positive, multi-year outlook. The quarter also featured leadership and governance actions, including the initiation of a CEO succession process and the appointment of Patrick Decker to the Board. For the full year, JCI tightened guidance to adjusted EPS of $3.66–$3.69, with organic sales around 3% and free cash flow conversion anticipated at ~85% or better. Translation for investors: the company is transitioning to a higher-growth, higher-margin business with stronger recurring revenue, while actively simplifying the portfolio and maintaining a disciplined capital allocation framework.