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- **Revenue Beat**: FY2025 ended with 1% growth, Q4 at 13% organic, driven by Software & Control (30% growth) and North America strength.
- **Margin Expansion**: 110bps segment margin improvement in FY2025, targeting >100bps in FY2026. 40%+ incremental margin in FY2026.
- **Sensia JV Dissolution**: $110M impairment charge, but +50bps margin benefit post-dissolution. Rockwell to focus on higher-margin software and digital services.
- **FY2026 Guidance**: 2-6% organic growth, $11.70 EPS midpoint, and 100%+ free cash flow conversion.
- **Strategic Investments**: $2B U.S. investment in infrastructure and talent, with Logix volumes nearing pre-COVID levels.

**【CEO Summary Section】**
- **Revenue Growth**: Fiscal 2025 ended with 1% reported and organic sales growth, driven by double-digit Q4 growth (13% organic). North America was the strongest region, with sequential sales growth in all segments.
- **Segment Performance**: 
  - **Intelligent Devices**: 14% organic growth, led by power control and Clearpath AMR wins (e.g., Africa's largest desalination plant). Sequential margin improvement in high 20s.
  - **Software & Control**: 30% organic growth, with Logix volumes nearing pre-COVID levels. New Logix L9 processor launched ahead of schedule.
  - **Lifecycle Services**: 4% decline vs. prior year, but margin expansion to 17.5% due to project execution efficiency.
- **Strategic Actions**: Dissolved Sensia JV with SLB, reducing annual revenue by ~$250M but improving margins by ~50bps. $2B+ U.S. investment in infrastructure and talent announced.
- **FY26 Outlook**: 2-6% organic growth (midpoint 4%), 11.70 EPS guidance, and 100%+ free cash flow conversion. Incremental margin >40%.

**【CFO Financial Commentary】**
- **Q4 Results**: 
  - Adjusted EPS: $3.34 (vs. $2.50 prior year), driven by 14% organic sales growth and 240bps margin expansion.
  - Gross Margin: 290bps year-over-year improvement under new reporting (engineering/R&D reclassified).
  - Free Cash Flow: $405M (114% conversion), with $1.4B annual record.
- **Sensia Impact**: $110M noncash impairment charge, but +50bps margin benefit post-dissolution. Rockwell assumes 100% ownership of process automation business.
- **FY26 Guidance**: 
  - Sales: 2-6% organic growth, 5% reported (including 1% FX tailwind).
  - Margin: 21.5% segment operating margin (vs. 20.4% in FY25).
  - EPS: $11.20-$12.20, excluding Sensia dissolution impact.
- **Cost Management**: $325M+ structural productivity savings vs. $250M target. Compensation expense at $255M for FY25.

**【Q&A Highlights】**
- **Sensia Postmortem**: JV underperformed due to COVID-era headwinds, broad scope, and evolving tech. Dissolution simplifies go-to-market, with Rockwell focusing on higher-margin software and digital services.
- **Tariffs & Pricing**: 1% underlying price and 1% tariff-based price in FY26. Tariffs neutral to EPS, with $70M pension contribution in Q4.
- **CapEx Trends**: Sequential Q1 sales decline expected, but gradual improvement through FY26. Book-to-bill ~1x in product business, withLifecycle Services facing project delays.
- **Margin Expansion**: 110bps margin improvement in FY25, targeting >100bps in FY26. 40%+ incremental margin driven by productivity, price, and mix.

Rockwell Automation, Inc. (ROK) Q4 2025 Earnings Call Transcript

Revenue

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Operating Expenses

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ROK

ROK fundamentals

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