Rockwell Automation — Fiscal 2026 Earnings Summary

Financial Performance:

• Fiscal 2026 total sales reached $8,989 million, an 8% year-over-year increase; organic sales also grew 8% year-over-year.
• Fourth quarter 2026 sales were $2,332 million, a 1% year-over-year increase; organic sales grew 3% year-over-year.
• Reported and organic sales growth for both periods were reduced by approximately 4 percentage points (Q4) and 1 percentage point (Full Year) due to a customer tariff refund program.
• Diluted EPS for fiscal 2026 was $12.54 (up 63% year-over-year); Adjusted EPS was $13.42 (up 27% year-over-year).
• Fourth quarter 2026 diluted EPS was $3.11 (up 153% year-over-year); Adjusted EPS was $3.88 (up 16% year-over-year).
• Both Q4 and Full Year EPS figures included a favorable $0.11 net impact from IEEPA tariff refund related items.
• Pre-tax margin for fiscal 2026 was 18.7% compared to 11.0% in fiscal 2025; Q4 2026 pre-tax margin was 18.6% compared to 2.7% in Q4 2025.
• Enterprise operating profit for fiscal 2026 was $1,997 million (up 27% year-over-year); Q4 2026 was $572 million (up 16% year-over-year).
• Enterprise operating margin for fiscal 2026 was 22.2% compared to 18.9% in fiscal 2025; Q4 2026 was 24.5% compared to 21.3% in Q4 2025.
• Cash provided by operating activities for fiscal 2026 was $1,958 million (up 27% year-over-year); Q4 2026 was $680 million.
• Free cash flow for fiscal 2026 was $1,701 million (up 25% year-over-year); Q4 2026 was $602 million.
• Operating cash flow and free cash flow for both periods included a favorable $108 million impact from IEEPA tariff refunds and related interest income.
• GAAP effective tax rate for fiscal 2026 was 16.5% (down from 18.3% in fiscal 2025); Adjusted Effective Tax Rate was 19.6% (up from 17.1% in fiscal 2025).
• Return on Invested Capital (ROIC) was 23.3% for fiscal 2026 compared to 13.2% in fiscal 2025; Adjusted ROIC was 20.4% compared to 14.6% in fiscal 2025.
• Adjusted EBITDA for fiscal 2026 was $2,182 million (up from $1,753 million in fiscal 2025); Q4 2026 was $620 million.
• Free cash flow conversion for fiscal 2026 was 113% compared to 114% in fiscal 2025.

Guidance and Future Outlook:

• Fiscal 2027 reported sales growth guidance is 4.5% to 7.5%; organic sales growth guidance is 6% to 9%.
• Fiscal 2027 diluted EPS guidance is $13.78 to $14.78; Adjusted EPS guidance is $14.50 to $15.50.
• Fiscal 2027 guidance assumes inorganic sales growth of approximately 0% and divestiture impact of approximately (1.5)%.
• Management expects healthy customer demand and significant new product releases in fiscal 2027.
• Management aims to grow customer value, increase market share, and expand margins as industrial operations become increasingly AI-enabled and autonomous.

Business Segments and Product Lines:

• Intelligent Devices: Fiscal 2026 sales were $4,185 million (up 11% year-over-year); organic sales grew 10%. Segment operating margin increased to 20.0% in fiscal 2026 from 18.0% in fiscal 2025. Q4 2026 sales were $1,144 million (up 5% year-over-year).
• Software & Control: Fiscal 2026 sales were $2,818 million (up 18% year-over-year); organic sales grew 17%. Segment operating margin increased to 33.8% in fiscal 2026 from 29.7% in fiscal 2025. Q4 2026 sales were $754 million (up 15% year-over-year).
• Lifecycle Services: Fiscal 2026 sales were $2,071 million (down 6% year-over-year); organic sales decreased 2%. Divestitures decreased sales by 6%. Segment operating margin increased to 15.1% in fiscal 2026 from 14.5% in fiscal 2025. Q4 2026 sales were $519 million (down 9% year-over-year).
• Total Organic ARR grew 5% year-over-year; software ARR grew in the high single digits year-over-year.

Market and Competitive Landscape:

• Management stated the company is gaining share and strengthening its leadership in core markets.
• The company is expanding its position in high-growth areas including semiconductor and data centers.
• Currency translation increased fiscal 2026 sales by 2% and Q4 2026 sales by approximately 0%.

Risks and Challenges:

• Reported results were impacted by a customer tariff refund program which reduced sales growth by approximately 4 percentage points in Q4 and 1 percentage point for the full year.
• Fiscal 2026 included a $50 million charitable contribution to the Rockwell Automation Charitable Corporation.
• Fiscal 2026 included $25 million in restructuring charges.
• Fiscal 2026 included a gain on the dissolution of the Sensia joint venture, net of transaction costs.
• Fiscal 2025 included a non-cash impairment charge related to the Sensia joint venture and an accounting change/accretion increase for legacy asbestos liabilities.
• Management highlighted risks including macroeconomic factors, trade policies, tariffs, cybersecurity, AI adoption risks, and supply chain disruptions.

Management Commentary and Tone:

• Blake Moret, Chairman and CEO, described the results as a "strong finish to a great year" with broad-based topline growth, margin expansion, and double-digit earnings growth.
• Management emphasized the differentiation of their strategy and operating model.
• The tone was confident, citing a position of strength entering fiscal 2027 with healthy demand and new product releases.

Other Key Points:

• The company received $103 million in IEEPA tariff refunds and $5 million in related interest in Q4 2026.
• The company accrued $85 million for estimated refunds to customers under the customer tariff refund program in Q4 2026.
• Share repurchases totaled $1,254 million for fiscal 2026 (3.1 million shares); $673 million remained available under the existing authorization as of September 30, 2026.
• Amortization of acquisition-related intangible assets decreased to $120 million in fiscal 2026 from $141 million in fiscal 2025, primarily due to the dissolution of the Sensia joint venture.
• Corporate and other expenses were $116 million for fiscal 2026, down from $125 million in fiscal 2025.
• Net legacy asbestos and environmental charges were favorable in Q4 2026 ($5 million benefit) and fiscal 2026 ($2 million benefit) compared to significant charges in the prior year.