Rockwell Automation (ROK) Q2 2025 earnings summary

Executive summary

• Q2 2025 reported sales declined 6% year-over-year to $2,001M; organic sales down 4%, with a 2% negative currency impact, but organic sales grew 8% sequentially, indicating a rebound.

• Adjusted EPS was $2.45, down 2% year-over-year but above expectations; diluted EPS was $2.22, down 4%.

• Segment operating margin improved to 20.4% from 19.0% a year ago, driven by cost reduction and margin expansion initiatives.

• Total annual recurring revenue (ARR) grew 8% year-over-year.

• Productivity and cost actions are on track to exceed $250 million in annual benefits.

Financial highlights

• Q2 sales were $2,001M, down from $2,126M in Q2 FY24; gross margin improved to 40.5% from 39.2% year-over-year.

• Net income attributable to Rockwell Automation was $252M, compared to $266M in Q2 2024.

• Segment operating earnings rose 1% to $408M; segment operating margin increased to 20.4% from 19.0%.

• Free cash flow was $171M for Q2, up from $69M a year ago; conversion improved to 61% from 24%.

• Adjusted effective tax rate increased to 17.7% from 14.8% year-over-year.

Outlook and guidance

• Fiscal 2025 organic sales growth expected in the +2% to -4% range; reported sales growth guidance updated to (4.5)% to 1.5%, with a ~0.5% FX headwind.

• Adjusted EPS guidance raised to $9.20–$10.20; diluted EPS guidance updated to $8.23–$9.23.

• Segment margin target raised to ~20%; free cash flow conversion expected at ~100% for fiscal 2025.

• Annual recurring revenue targeted to grow about 10% for the year.

• Sequential improvement in sales and margins expected through 2025, with Q3 and Q4 sales to grow sequentially.