Rockwell Automation (ROK) Q1 2026 earnings summary

Executive summary

• Reported sales increased 12% year-over-year to $2,105 million, with organic sales up 10% and currency contributing 2 points; strong performance in Intelligent Devices and Software & Control segments.

• Adjusted EPS rose 49% to $2.75, exceeding expectations, with diluted EPS up 67% to $2.69, driven by higher segment margins and favorable tax items.

• Segment operating margin increased to 20.7%, up 360 basis points year-over-year, reflecting productivity gains and operational efficiency.

• Total annual recurring revenue (ARR) grew 7% year-over-year.

• AI adoption, automation, and digital transformation trends continue to support long-term growth despite macroeconomic and geopolitical uncertainties.

Financial highlights

• Q1 sales reached $2,105 million, up from $1,881 million, with gross profit margin at 48.3% and adjusted EBITDA at $447 million (21.2% margin).

• Net income attributable to shareholders was $305 million, up from $184 million a year ago.

• Free cash flow was $170 million, down from $293 million, mainly due to incentive compensation and working capital.

• SG&A spend was flat year-over-year, reflecting strong cost discipline.

• Cash and cash equivalents at quarter-end were $444 million.

Outlook and guidance

• Fiscal 2026 reported sales growth guidance reaffirmed at 3%-7%, with organic sales growth of 2%-6%.

• Adjusted EPS guidance raised to $11.40–$12.20, reflecting a lower full-year tax rate; diluted EPS guidance updated to $10.75–$11.55.

• Segment margin expected to be ~21.5% for the full year, with free cash flow conversion projected at ~100%.

• Guidance excludes anticipated impacts from the Sensia joint venture dissolution, expected to close April 1, 2026.

• Q2 sales and margins expected to be slightly up sequentially, with mid-single-digit sales growth and less than 100 basis points of margin expansion year-over-year.