Rockwell Automation (NYSE:ROK) reported fiscal first-quarter 2026 results that management said exceeded expectations on sales, margin, and earnings, supported by double-digit year-over-year growth and continued productivity initiatives. On the company’s earnings call, Chairman and CEO Blake Moret said demand remained “healthy” across core offerings and verticals, even as many customers continued to hold back on larger capital projects amid trade and geopolitical uncertainty.
Quarterly performance and profitability
Moret said first-quarter sales came in “slightly better than expected,” with double-digit growth in both reported and organic sales. CFO Christian Rothe added that reported sales rose 12% year over year, including about 2 points from currency. Rothe said pricing contributed 3 points of organic growth, split between underlying price realization and tariff-based pricing.
Rothe highlighted gross margin expansion driven by “positive price, cost, and productivity and favorable mix,” while SG&A was flat year over year. Engineering and development spending rose 10% year over year and remained about 8% of sales, which the company described as aligned with its innovation plans.
Segment results: strength in Intelligent Devices and Software & Control
Rockwell’s two largest segments delivered strong organic growth in the quarter, while Lifecycle Services declined modestly as customers delayed larger projects.
- Intelligent Devices: Organic sales increased 16% year over year, with especially strong performance in drives and motion. Segment margin was 17.3%, up 240 basis points year over year, driven by higher sales and price/cost productivity.
- Software and Control: Organic sales grew 17% year over year, ahead of expectations. Segment margin was 31.2%, up 610 basis points, driven by strong volume—particularly in Logix—partially offset by compensation.
- Lifecycle Services: Organic sales declined 6% year over year, with book-to-bill of 1.16. Segment margin rose 160 basis points to 14.1% as project execution and productivity offset lower revenue.
Management cited sustained momentum in Logix and motion, and said Rockwell’s new L9 controller had a strong start with early adopters citing performance and architectural benefits. Moret and Rothe also emphasized broad-based performance within Software and Control, including software and product contributions beyond Logix.
Recurring revenue, software wins, and AI-enabled offerings
Rockwell reported annual recurring revenue growth of 7% in the quarter, in line with expectations. Moret said performance was strong in recurring software across automotive, life sciences, and energy. He also noted that Plex posted its “strongest quarter yet” with significant customer wins, including R.H. Sheppard, which will use the cloud-native Plex platform for operational control and scalable expansion.
In recurring services, Moret cited a win with Hindalco Industries, which selected Rockwell to implement OT cybersecurity across six plants in India.
The company also discussed increasing adoption of digital twin and AI-related capabilities. Moret said customers continue to expand their use of Emulate3D for digital twins, and Rockwell is seeing momentum with Copilot functionality in FactoryTalk Design Studio. He cited Thermo Fisher selecting Rockwell for an AI-enabled troubleshooting agent designed to accelerate issue resolution and reduce downtime.
During Q&A, Moret described Rockwell’s approach to artificial intelligence as focused on specific industrial applications and workflow simplification rather than “large, nebulous models.” He said the company is applying AI at multiple levels of its architecture, including offerings such as vision AI, LogixAI, and AI capabilities in Plex modules such as demand planning.
Industry demand: strong e-commerce/warehouse automation and process, mixed project activity
Moret said discrete sales rose low double digits year over year, led by continued strength in e-commerce and warehouse automation. Automotive sales grew mid-single digits, which he said was consistent with the company’s outlook, while larger CapEx decisions remained cautious.
Rockwell reported e-commerce and warehouse automation sales growth of more than 60% in the quarter, driven by North America. The company also said data center-related business again delivered strong double-digit growth, citing demand tied to AI-driven power constraints and microgrid adoption that is increasing need for industrial-grade controls in power and advanced cooling.
In hybrid industries, sales rose high single digits, led by double-digit growth in food and beverage and home and personal care. Life sciences declined low single digits due to project delays in North America, though management said its pipeline is expanding in areas including GLP-1, radiopharma, and medical devices, and the company continues to expect full-year growth in life sciences.
Process industry sales increased 10% year over year, with strong growth in chemicals, water, and energy. Moret said Rockwell’s chemicals exposure is primarily in specialty chemicals, which he characterized as more resilient than bulk chemicals, and he highlighted share gains and PlantPAx momentum. In energy, he cited activity in oil and gas, power, and renewables, including a greenfield win with FS Bioenergia in Brazil involving automation for a new facility and carbon capture and storage project.
Outlook: guidance maintained, EPS midpoint raised on tax benefits
Rockwell maintained its fiscal 2026 organic sales growth outlook of 2% to 6%, with the midpoint assuming gradual sequential improvement through the year. Moret said the company would need “additional evidence of accelerating capital spend across additional verticals” to move toward the high end of its outlook. The company reiterated expectations for high single-digit growth in additional recurring revenue, segment margin expansion of more than 100 basis points, and free cash flow conversion of approximately 100%.
The company raised its adjusted EPS guidance range by lifting the low end to $11.40 and increasing the midpoint by $0.10 to $11.80, driven by discrete tax benefits in Q1. Rothe said the first-quarter adjusted effective tax rate was about 17% due primarily to stock option exercise benefits, and the company now expects a full-year effective tax rate of about 19.5%, better than its prior 20% guide.
For the second quarter, Rothe said Rockwell expects sales to be slightly up sequentially and total segment operating margin to improve modestly each quarter, with sequential margin expansion in “tens of basis points.” The company’s Q2 view implies mid-single-digit year-over-year sales growth and less than 100 basis points of margin expansion year over year, with low single-digit sequential growth in adjusted EPS. Rothe also noted about a $0.10 sequential headwind from the tax rate moving from roughly 17% in Q1 to approximately 20% in Q2.
Management also reiterated expectations around the planned dissolution of the Sensia joint venture, which the company said remains on track for an April 1 close. Rothe said guidance does not include Sensia’s impact and reiterated expectations of no significant effect on adjusted EPS, an annualized sales reduction of about $250 million, and an annualized total company segment margin improvement of about 50 basis points after the close.
During Q&A, Moret said inventory levels at distributors and machine builders have returned to normal, and he described customer and distributor sentiment as optimistic but “prudent.” He added that the start of the second quarter was aligned with the guidance provided.
About Rockwell Automation (NYSE:ROK)
Rockwell Automation is a global industrial automation and digital transformation company headquartered in Milwaukee, Wisconsin. The firm designs, manufactures and supports control systems, industrial control hardware and software, and related services that help manufacturers and industrial operators automate processes, improve productivity and enable data-driven decision making. Rockwell traces its heritage to the Allen-Bradley and Rockwell automation businesses and positions itself as a provider of integrated automation solutions across discrete and process industries.
The company’s product portfolio includes programmable logic controllers (PLCs), human-machine interfaces (HMIs), variable frequency drives, sensors, safety components and other industrial control hardware, often marketed under the Allen-Bradley brand.
