Rockwell Automation, Inc.

Q3 reported sales were up 8% year over year, and organic sales were up 10%; currency added about 1 point and the Sensia dissolution reduced sales by 3 points. Adjusted EPS was $3.49, up more than 20% year over year, and enterprise operating margin was 22.3%, up 280 bps. Gross margin was 49.5%, up 70 bps year over year. Free cash flow was $654 million, $165 million higher than the prior year. For fiscal 2026, Rockwell raised reported and organic sales growth guidance to 7.5% to 9.5% and increased adjusted EPS guidance to $13.00 to $13.30, with a midpoint of $13.15. Management still expects enterprise operating margin of 21.5%, organic annual recurring revenue to grow mid-single digits, free cash flow conversion of 100%, and tariff impacts to be EPS neutral in fiscal 2026. For Q4, the company expects reported sales to be up low single digits sequentially and enterprise operating margin to be approximately flat versus Q3.

Blake Moret said the quarter reflected strong execution, broadening customer investment, and rising adoption of Rockwell’s hardware, software, and services across new end markets. He highlighted demand in Semiconductor, Data Center, and E-commerce & Warehouse Automation, plus early signs of renewed activity in Automotive and Life Sciences. His tone was confident but measured: he emphasized that large project recovery is not broad-based yet, but Rockwell believes it is well positioned to benefit as spending improves.

Christian Rothe emphasized that Q3 margin performance was driven by higher volume and favorable mix, with gross margin at 49.5% and enterprise operating margin at 22.3%. He said Q3 free cash flow of $654 million reflected higher pretax income and good working-capital management, and noted the quarter’s adjusted tax rate was 19.2% versus a 19.5% full-year expectation. He also highlighted share repurchases of about 300,000 shares for about $150 million in the quarter, expects about $850 million of repurchases for the year, and sees fiscal 2026 CapEx at about 3% of sales, corporate expense around $115 million, and net interest expense around $120 million.

Analysts pressed management on pricing, inflation, and how much of the company’s price realization is tariff-related versus underlying. Rothe said total fiscal 2026 price is still expected to be about 250 bps, with about 100 bps from tariff-based pricing and about 150 bps from underlying price, and that tariff pricing is intended to offset tariff-related costs rather than be a major conversion driver. Questions also focused on Lifecycle Services and why ARR and services growth remain softer; Moret said delays are tied to cautious capital spending, terms and conditions, and weak investment in industries like Food & Beverage. Analysts also asked about Q4 margin progression and Software & Control margins; management said Q4 margins are pressured by inflation and unfavorable mix, but they still expect full-year Software & Control margins in the low 30s and not in the 20s.