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. With the top-line guidance range that included limited growth, we knew it would be a challenge to both absorb higher costs and expand margins. With the very busy 12 months of fiscal year 25 in the books, I'm proud of the team's execution as we have returned to top-line growth and continued to reduce costs. Rockwell is well positioned for sustained market-beating growth and profitability as we build on this success for fiscal 2026 and beyond.
We close the year with another strong quarter of outperformance versus our expectations, including double-digit year-over-year growth in both sales and operating earnings. Free cash flow was also very good in the quarter and for the year. As we will discuss, we're taking further steps to streamline the organization and increase efficiency in the service of customer value and expanded margins. Both reported and organic Q4 sales were up double digits versus prior year.
While we did have favorable comps from a year-over-year standpoint, Q4 sales grew high single digits sequentially, which was better than we expected. Organic year-over-year sales growth of 13% was led by continued strength in our product businesses. On our last earnings call, we flagged the potential for Q4 pull-ins into Q3. Based on our analysis of daily orders and sales trends, inventory levels in our channel, and machine builder surveys, pull-in orders were less than expected in Q3 and not evident in Q4.
| Metric | Period | Current guidance |
|---|---|---|
| Organic sales growth | FY2026 | 2%-6% (4% at midpoint) (new) |
| Reported revenue growth | FY2026 | ~5% at midpoint (incl. ~100 bps currency benefit) (new) |
| Segment operating margin | FY2026 | ~21.5% (more than 100 bps higher YoY) (new) |
| Adjusted EPS | FY2026 | $11.20-$12.20 ($11.70 midpoint) (new) |
| Incremental margin | FY2026 | Exceed 40% (inclusive of tariff-based pricing) (higher) |
| Capital expenditures | FY2026 | ~3% of sales (new) |
| Pricing | FY2026 | ~2 points (1 pt underlying, 1 pt tariff-based) (new) |
| Sensia dissolution impact | FY2026 | Not yet in guide; will reduce revenue ~$250M annualized and add ~50 bps margin with no significant EPS impact (new) |
| Metric | YoY | Note |
|---|---|---|
| Q4 reported sales | +14% | Outperformance versus expectations, with ~1 pt currency, ~4 pts price (1 pt tariff-based), and strong product/Software and control growth |
| Q4 organic sales | +13% | Continued strength in product businesses led by Logix, with favorable year-over-year comps |
| Software and control organic sales | +30% | Continued Logix momentum plus Plex and FiiX new-logo wins |
| Software and control margin | +880 bps to 31.2% | Outstanding 30% organic sales growth and good price realization |
| Intelligent Devices organic sales | +14% | Strong power control growth aided by the CUBIC acquisition and double-digit OTTO AMR growth |
| Intelligent Devices margin | -90 bps to 19.8% | Tough comparison versus prior-year Clearpath earnout reversal and higher compensation |
| Lifecycle Services organic sales | -4% | Project delays across the core business and Sensia as customers await trade/policy clarity; margin still up 30 bps to 17.5% on strong execution |
| Adjusted EPS | +32% (34% excluding definition change) to $3.34 | Higher volume, strong productivity, and price, led by Software and control |
| Annual recurring revenue | +8% | Large software and services wins despite some delayed discretionary services spending |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Long-cycle CapEx delays | Customers holding off on larger investments | CapEx remains muted with projects subject to higher approval thresholds still delayed; gradual sequential improvement expected through FY2026 without a big capital release assumed | Stable |
| Sensia JV | Joint venture with SLB | Orderly dissolution agreed; Rockwell reabsorbs its process automation business for lower revenue but higher margin and simplified go-to-market | Deteriorating then repositioned |
| Logix recovery | Below pre-COVID unit volumes for FY2025 | Touched pre-COVID unit volumes in the back half; FY2026 expected to return to pre-COVID levels plus market growth and share gains | Improving |
| E-commerce and warehouse automation | — | Sales up over 70% in Q4 with broad contribution across Logix, drives, motion, OTTO AMRs, and software; multifaceted across data center, parcel, and CPG | Improving |
| Data center demand | Relatively small business | Strong double-digit growth with multiple global wins; Logix and modular power distribution well positioned for AI data center cooling and control needs | Improving |
| Margin expansion / cost reduction | $250M structural productivity target | Exceeded at $325M+; targeting FY2026 incrementals above 40% with additional opportunities, while keeping tariff pricing EPS-neutral | Improving |
| Medium-term 23.5% margin target | 23.5% target | Approaching given 22.5% Q4 and Sensia tailwind; management focused on hitting current target before setting a new one | Improving |