Rockwell Automation (ROK) Q1 2025 earnings summary

Executive summary

• Orders increased 10% year-over-year and mid-single digits sequentially, with strong performance across all regions and business segments.

• Reported sales declined 8.4% year-over-year to $1,881 million, with organic sales down 7.6% and volume declines in Intelligent Devices and Software & Control, partially offset by growth in Lifecycle Services.

• Adjusted EPS was $1.83, down 10% year-over-year but above expectations, primarily due to lower sales volume.

• Free cash flow improved to $293 million from a net outflow of $35 million in the prior year, driven by higher operating cash flow and no incentive compensation payout.

• Early benefits from operational excellence and cost discipline initiatives contributed to margin outperformance and offset some volume declines.

Financial highlights

• Q1 reported sales were $1,881 million, down 8.4% year-over-year; currency translation was a 90 bps headwind.

• Segment operating margin was 17.1%, a 20 bps decrease year-over-year; adjusted EPS of $1.83.

• Free cash flow was $293 million, up from $(35) million in the prior year; free cash flow conversion at 140%.

• Net income was $184 million, or $1.61 per diluted share, down from $215 million, or $1.86 per share, in the prior year.

• Adjusted effective tax rate was 17.5%, down from 17.9% a year ago.

Outlook and guidance

• FY25 reported sales midpoint updated to ~$8.1B due to currency; reported sales growth range revised to (5.5)% to 0.5%.

• Organic sales growth guidance reaffirmed at (4)% to 2% year-over-year; ARR expected to grow ~10%.

• Segment margin expected around 19%; adjusted EPS guidance reaffirmed at $8.60–$9.80 midpoint.

• Free cash flow conversion expected at 100% for FY25.

• Management expects gradual sequential improvement in sales and margins through 2025, with potential impacts from tariffs.