Rockwell Automation (NYSE: ROK) reported fiscal Q3 2026 sales of $2.313 billion, up 8% from $2.144 billion a year earlier, while diluted EPS rose 40% to $3.65 from $2.60. For the quarter ended June 30, 2026, organic sales increased 10%, enterprise operating margin expanded to 22.3%, and free cash flow reached $654 million. The company released the results on August 4 and raised its fiscal 2026 sales and EPS guidance.
Core Earnings Data
Reported growth trailed organic growth because divestitures reduced sales by 3%, partly offset by a 1% currency benefit. Higher volume, favorable business mix, and operating discipline allowed earnings and cash flow to grow faster than revenue, despite negative price/cost effects.
Pre-tax margin increased by 4.3 percentage points, while the non-GAAP enterprise operating margin rose by 2.8 percentage points. Higher pre-tax income was also the main driver of the quarter’s cash-flow improvement.
| Metric | Fiscal Q3 2026 | Fiscal Q3 2025 | Year-over-year change |
|---|---|---|---|
| Sales | $2.313 billion | $2.144 billion | +8% |
| Gross profit / margin | $1.144 billion / 49.5% | $1.046 billion / 48.8% | About +9% / +0.7 pts |
| Pre-tax income / margin | $470 million / 20.3% | $342 million / 16.0% | About +37% / +4.3 pts |
| Enterprise operating profit / margin | $516 million / 22.3% | $418 million / 19.5% | +23% / +2.8 pts |
| Net income attributable to Rockwell | $408 million | $295 million | About +38% |
| Diluted EPS | $3.65 | $2.60 | +40% |
| Adjusted EPS | $3.49 | $2.85 | +22% |
| Adjusted EBITDA | $565 million | $461 million | About +23% |
| Operating cash flow | $724 million | $527 million | About +37% |
| Free cash flow | $654 million | $489 million | About +34% |
Enterprise operating profit, adjusted EPS, adjusted EBITDA, and free cash flow are non-GAAP measures.
Business and Segment Performance
Software & Control delivered the fastest growth and the largest margin expansion. Intelligent Devices also produced double-digit reported and organic growth, while Lifecycle Services declined because of divestitures and modest organic weakness.
| Segment | Q3 sales | Reported growth | Organic growth | Operating earnings | Operating margin |
|---|---|---|---|---|---|
| Intelligent Devices | $1.080 billion | +12% | +10% | $216 million | 20.0%, vs. 18.8% |
| Software & Control | $751 million | +19% | +18% | $261 million | 34.8%, vs. 31.6% |
| Lifecycle Services | $482 million | -12% | -2% | $73 million | 15.1%, vs. 13.3% |
Intelligent Devices benefited from higher volume, favorable currency, and mix, partly offset by negative price/cost. Software & Control’s margin improvement was driven by volume, although price/cost was also a headwind.
Lifecycle Services’ reported decline included an 11% divestiture impact and a 1% currency benefit. Operating earnings were unchanged, but stronger project execution and the margin benefit from the Sensia dissolution lifted the segment’s margin despite lower volume.
Organic annual recurring revenue grew 6% year over year, while software ARR increased at a high-single-digit rate. ARR measures the annual contract value of active recurring-revenue contracts and does not represent recognized revenue, backlog, or future revenue.
Management attributed demand growth to semiconductor, data center, and warehouse automation customers, alongside improving activity in automotive and life sciences.
Sensia Benefits Widened the Gap Between GAAP and Adjusted Earnings
Rockwell completed the dissolution of the Sensia joint venture on April 1, including the divestiture of certain businesses to its former partner. The transaction reduced reported sales growth but benefited margins, making the difference between reported and organic performance especially important this quarter.
The company recorded an $18 million gain on the Sensia dissolution, net of transaction costs. Sensia-related discrete tax items also helped lower the GAAP effective tax rate to 13.2% from 14.3%, contributing to diluted EPS growth of 40%.
Adjusted EPS increased by a smaller 22%, but this growth was still supported by higher enterprise operating margin rather than the GAAP transaction and tax effects alone. The adjusted effective tax rate moved in the opposite direction, rising to 19.2% from 15.3% primarily because of BEPS Pillar Two minimum tax rules.
Profitability, Cash Flow, and the Balance Sheet
Gross margin increased to 49.5%, while selling, general, and administrative expenses declined to 21.2% of sales from 23.2%. Engineering and development spending rose slightly in dollars to $173 million from $170 million but fell to 7.5% of sales from 7.9%, providing additional operating leverage.
Operating cash flow and free cash flow both increased by more than 30%, primarily because of higher pre-tax income. At June 30, cash and equivalents were $479 million, compared with $468 million at September 30, 2025, while inventories were largely unchanged at $1.243 billion versus $1.247 billion.
Short-term debt increased to $688 million from $610 million over the same balance-sheet period, while long-term debt declined to $2.570 billion from $2.614 billion. During the quarter, Rockwell repurchased approximately 0.3 million shares for $145 million; about $1.2 billion remained under existing repurchase authorizations.
Fiscal 2026 Guidance
Rockwell raised and narrowed its fiscal 2026 sales-growth and EPS ranges. The updated outlook calls for both reported and organic sales growth of 7.5% to 9.5%, with the reported sales midpoint increasing to approximately $9.0 billion.
| Metric | Updated guidance | Prior guidance | Change |
|---|---|---|---|
| Reported sales midpoint | About $9.0 billion | About $8.9 billion | Raised |
| Reported sales growth | 7.5% to 9.5% | 5% to 9% | Both endpoints raised |
| Organic sales growth | 7.5% to 9.5% | 5% to 9% | Both endpoints raised |
| Diluted EPS | $12.72 to $13.02 | $11.88 to $12.48 | Raised and narrowed |
| Adjusted EPS | $13.00 to $13.30 | $12.50 to $13.10 | Raised and narrowed |
| Divestiture impact | About -1.5% | About -1.5% | Unchanged |
| Currency translation | About +1.5% | About +1.5% | Unchanged |
The guidance excludes sales, earnings, and cash flows from the divested Sensia businesses in the second half of fiscal 2026.
Recent Insider Transactions
The supplied insider data shows 68,132 shares purchased across 18 transactions and 70,153 shares sold across 20 transactions during the last six months, resulting in net sales of 2,021 shares. The transactions below are the most recent records with disclosed transaction details; all were reported as direct transactions.
| Date | Insider | Role | Transaction | Price per share | Reported value |
|---|---|---|---|---|---|
| July 16, 2026 | Terry Lee Riesterer | Officer | Sale | $453.24 | $127,359 |
| June 4, 2026 | Matthew W. Fordenwalt | Officer | Sale | $460.51 | $173,612 |
| June 2, 2026 | Matthew W. Fordenwalt | Officer | Sale | $456.34 | $99,482 |
| May 20, 2026 | John M. Miller | Officer | Sale | $426.02 | $449,025 |
| May 20, 2026 | John M. Miller | Officer | Derivative exercise/conversion | $136.40 | $95,480 |
| May 8, 2026 | Terry Lee Riesterer | Officer | Derivative exercise/conversion | $196.43–$279.50 | $960,190 |
| May 7, 2026 | Terry Lee Riesterer | Officer | Sale | $451.83–$452.02 | $1,818,722 |
| May 5, 2026 | Scott A. Genereux | Officer | Sale | $447.73 | $246,252 |
These records describe transactions only and do not establish insiders’ views on Rockwell’s outlook.
Risks Investors Should Monitor
- Negative price/cost: Rockwell identified negative price/cost as an offset to overall margin gains and to performance in its two largest segments. Continued pressure could limit further margin expansion.
- Lifecycle Services weakness: The segment’s organic sales declined 2%, while lower volume offset some of the benefits from project execution and the Sensia transaction.
- Sensia-related comparability: The dissolution reduced reported sales but benefited margins, GAAP income, and taxes. Investors will need to separate these transaction effects from underlying operating trends.
- Higher adjusted tax rate: BEPS Pillar Two increased the adjusted effective tax rate to 19.2%, creating an earnings headwind even as the GAAP tax rate declined.
Summary
Rockwell Automation’s fiscal third quarter combined double-digit organic growth with wider margins and substantially higher cash generation. Software & Control was the main segment driver, while Lifecycle Services remained the weakest area and Sensia-related effects complicated comparisons. The raised fiscal 2026 outlook indicates greater confidence in current execution, with future results depending on sustained customer demand, price/cost management, and the durability of margin gains after transaction-related benefits.
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