Honeywell executives discussed Building Automation performance and 2026 expectations during the company’s fourth-quarter earnings call.
Honeywell (Nasdaq: HON) reported continued momentum in its Building Automation business during the fourth quarter of 2025, driven by strength in projects, fire systems, access solutions, and growing demand from data center and healthcare markets.
During the company’s Q4 2025 earnings call, executives said Building Automation delivered 8% organic sales growth in the quarter, with both products and solutions contributing evenly to performance.
“Building Automation grew 8% organically, supported by growth of 9% in solutions and 8% in products,” said Senior Vice President and CFO Mike Stepniak. He added that orders increased both year-over-year and sequentially, “highlighted by strength in the projects and fire businesses.”
Regionally, Stepniak said North America and the Middle East led results, with Europe posting strong mid-single-digit growth.
Security and access driving project growth
Honeywell executives emphasized that access control and broader security offerings are increasingly integrated into Building Automation project wins, particularly following the company’s Access Solutions acquisition.
“The Access Solutions acquisition is playing extremely well,” Chairman and CEO Vimal Kapur said during the Q&A session. “Sales synergies have been a big feature of it, and that’s been additive to the overall growth.”
Kapur said the acquisition has enabled Honeywell to expand security system pull-through within larger building projects. “We are able to pull through a lot of access solution in our projects business in our solutions side of the house,” he said.
Data centers emerge as growth area
Kapur also pointed to data centers as a growing source of demand for Honeywell’s Building Automation, fire, and security portfolio.
“Data center overall position of Honeywell in Building Automation is becoming slowly material,” he said. “We are inching towards that becoming greater than 5% of our revenue.”
He noted that Honeywell’s data center footprint has expanded rapidly in recent years. “That number was zero a couple of years back,” Kapur said, adding that growth is coming across multiple solution areas, including fire safety, environmental controls, building management systems, and security.
Platform strategy aimed at recurring revenue growth
Executives linked Building Automation performance to Honeywell’s broader strategy of increasing recurring revenue through its Honeywell Forge platform.
“We have been working very hard to change our business model to more recurring revenue,” Kapur said. “The basis of that is stronger linkage to our IoT platform, Forge.”
Kapur explained that in connected buildings, Honeywell creates asset-level data models that support software applications layered on top of physical systems. “When we connect the building, we are able to identify all its assets and really build a reference data model for our customer, which allows us to then build different applications on top of it,” he said.
He added that Honeywell is moving toward “agentic” software capabilities that support operations, maintenance, and energy management.
2026 outlook: continued growth and margin expansion
Looking ahead, Honeywell expects Building Automation to deliver above mid-single-digit organic growth in 2026, according to Stepniak. Growth is expected to be led by North America, with accelerating demand in Europe tied to healthcare investment and decarbonization infrastructure.
For the full year, Stepniak said both products and solutions are expected to grow at similar rates. Honeywell anticipates more than 50 basis points of margin expansion in Building Automation, driven by volume leverage, pricing, and productivity actions.
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