Our actual results may differ materially from our projections due to a wide range of risks and uncertainties that are described in our earnings release and detailed in all our SEC filings. Rockwell had another good quarter as we returned to year-over-year sales growth. We're also making good progress on our journey to the segment margin goals we introduced at our November 2023 Investor Day. These investments will complement our robust productivity programs to drive our global growth and margin expansion goals.
Similar to last quarter, our total company book-to-bill was about 1.0, with year-over-year orders growth in the Americas, EMEA, and Asia. Reported sales were up 5%, and our organic sales were up over 4% year-over-year, with currency contributing less than a point of growth in the quarter. Similar to last quarter, product sales were better than some of the longer cycle businesses, which tend to be more capital intensive. Double-digit growth in our cloud-native software business was offset by relative weakness in recurring services, mainly driven by delays in cybersecurity investments.
Software and control organic sales grew 22% year-over-year, driven by strong growth in our hardware business. Our SaaS business grew 10% year-over-year with strategic wins across Plex and Fix. One of our important software wins in Q3 was with Beam Therapeutics, a leader in manufacturing of cell and gene therapies. FactoryTalk PharmaSuite MES software will help this customer automate their production process and ensure quality control as they continue to expand their commercial operations in this fast-growing vertical.
| Metric | Period | Current guidance |
|---|---|---|
| Reported sales growth | FY2025 | -0.5% YoY (midpoint, narrowed) (midpoint raised slightly) |
| Adjusted EPS | FY2025 | $9.80-$10.20 ($10.00 midpoint) (raised) |
| Segment operating margin | FY2025 | ~20% (unchanged) |
| Price realization | FY2025 | 2%+ (raised to 2%+) |
| Adjusted ETR | FY2025 | 17% (unchanged) |
| Full-year compensation expense | FY2025 | ~$230M (merit + bonus) |
| Net interest expense | FY2025 | ~$140M |
| Corporate and other expense | FY2025 | ~$155M |
| Five-year investment program | FY2025-FY2030 | over $2B (CapEx + OpEx, partly run-rate) (newly introduced) |
| Metric | YoY | Note |
|---|---|---|
| Reported sales | +5% | return to growth, minimal currency impact, product strength |
| Organic sales | +4%+ | product sales outperformed longer-cycle capital-intensive businesses |
| Software & Control organic sales | +22% | strong hardware growth, Logix up over 30%, SaaS up 10% |
| Intelligent Devices organic sales | +1% | double-digit product growth offset by configured-to-order decline |
| Lifecycle Services organic sales | -6% | in line with expectations against difficult comp; customers delaying capital projects |
| Discrete sales | +10% | growth in automotive and e-commerce and warehouse automation |
| E-commerce and warehouse automation sales | +30% | continued strength across all customer segments, growing AMR interest |
| Process industries sales | low single-digit decline | weak global demand and volatile commodity prices constraining investment |
| Software & Control margin | +800 bps (31.6%) | double-digit volume growth and strong price realization |
| Adjusted EPS | $2.82 (above expectations) | higher volume and strong cost reduction/margin expansion execution |
| Free cash flow | +$251M ($489M) | higher income and conversion of 153% |
| Annual recurring revenue | +7% | double-digit cloud-native software offset by weak recurring services (cybersecurity delays) |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Cost reduction / margin expansion program | $250M FY2025 target, $110M in FY2024 | $250M target met in three quarters; $360M over five quarters; transitioning into core | Ahead of plan, operationalizing |
| Five-year strategic investment | — | over $2B in plants, digital infrastructure, and talent; majority CapEx, on offense | New, expansionary |
| Large-project CapEx unlock | customers delaying capital projects | some advancing greenfields; delays not cancellations; higher U.S. capacity orders expected in FY2026 | Gradually improving |
| Tariffs and pricing | mitigation via resiliency and price; ~1% historical price | near-zero EPS tariff impact, ~1 point tariff-based price; full-year price 2%+ | Managed, higher price |
| Pull-in / demand sustainability | — | at most 2-3 points of Q3 growth from pull-ins; no notable demand inflection | Stable underlying demand |
| Tax outlook | — | BEPS Pillar Two to raise ETR 2%-3% in FY2026; new U.S. tax bill not material to Rockwell | Fy2026 headwind |