Emerson Electric (EMR) Citi's Global Industrial Tech & Mobility Conference 2026 summary

Software and AI integration

• Achieved 9% ACV growth last quarter, targeting 10%+ for the year, driven by integration of AI into core software products and strong customer demand for embedded AI solutions.

• Three key differentiators: deep domain expertise, mission-critical applications in regulated industries, and a usage-based economic model protect against generic AI threats.

• Released new AI-powered products like Ovation Virtual Advisor and Aspen Virtual Advisor, with over $100 million in outstanding quotations.

• Increased R&D investment in software to accelerate innovation and maintain competitive advantage.

• Customers are actively including the company in their AI roadmaps, seeking support for operational improvements.

Business performance and growth drivers

• U.S. market is the primary growth engine, supported by strong industrial policy and activity in semiconductors, aerospace, energy, life sciences, and power.

• Middle East and emerging markets like India and Africa are rapidly growing, offsetting weakness in China and Europe.

• Power segment saw 74% order growth, with significant opportunities in modernization, data centers, and future greenfield projects.

• MRO (maintenance, repair, and operations) remains stable, representing about two-thirds of sales and growing at mid-single digits.

• Test and measurement business achieved 20% order growth and 29% segment EBITDA, with cost synergies realized and ongoing R&D investment in AI tools.

Regional and sector trends

• U.S. posted 18% growth, with all verticals performing well; Middle East and Asia (outside China) also strong, while Europe and China remain soft.

• Life sciences seeing U.S. expansions for new drugs, with larger nearshoring investments expected to materialize through 2027–2028.

• Investments in Saudi Arabia and India are expanding manufacturing capacity to meet demand.

• Venezuela represents a potential future growth opportunity, with infrastructure and security being monitored.