Rockwell Automation, Inc. reported second quarter fiscal 2026 results.
"We delivered a strong second quarter, with double-digit growth in sales and earnings exceeding our expectations. We saw solid momentum across much of the business, led by improving demand in warehouse automation, data center, semiconductor, and energy. Our performance this quarter reflects the strength of our portfolio and the team’s ability to execute in a dynamic global environment," said Blake Moret, Chairman and CEO.
Fiscal Q2 2026 Financial Results
Fiscal 2026 second quarter sales were $2,239 million, up 12% from $2,001 million in the second quarter of fiscal 2025. Organic sales increased 9% and currency translation increased sales by 3%.
Income before income taxes was $440 million in the second quarter of fiscal 2026 compared to $299 million in the same period last year. Pre-tax margin was 19.7% in the second quarter of fiscal 2026 compared to 14.9% in the same period last year. Enterprise operating profit was $504 million in the second quarter of fiscal 2026, up 32% from $381 million in the same period of fiscal 2025. Enterprise operating margin was 22.5% compared to 19.0% a year ago. The increases in pre-tax margin and Enterprise operating margin were primarily due to higher sales volume, positive price/cost inclusive of productivity, and favorable mix, partially offset by higher compensation.
Fiscal 2026 second quarter Net income attributable to Rockwell Automation was $350 million or $3.10 per share, compared to $252 million or $2.22 per share in the second quarter of fiscal 2025. The increases in Net income attributable to Rockwell Automation and diluted EPS were primarily due to higher pre-tax margin. Fiscal 2026 second quarter Adjusted EPS was $3.30, up 32% compared to $2.50 in the second quarter of fiscal 2025 primarily due to higher Enterprise operating margin.
Cash provided by operating activities in the second quarter of fiscal 2026 was $320 million, compared to $199 million in the second quarter of fiscal 2025. Free cash flow in the second quarter of fiscal 2026 was $275 million, compared to $171 million in the same period last year. Increases in cash provided by operating activities and free cash flow were primarily due to higher pre-tax income.
Fiscal Year 2026 Outlook
The table below provides updated fiscal 2026 guidance. Following the April 1, 2026 dissolution of the Sensia joint venture, the sales, earnings, and cash flows of the divested businesses are excluded from second-half guidance. Organic sales growth for the third and fourth quarters will reflect adjustments for comparable prior-year periods.
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(1) Updated guidance as of May 5, 2026; Prior guidance as of February 5, 2026. Updated guidance does not include sales, earnings, or cash flows related to the divested businesses of the Sensia joint venture in the second half of fiscal 2026. |
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(2) Organic sales growth and Adjusted EPS are non-GAAP measures. See Organic Sales, Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate for more information on these non-GAAP measures. |
"We see improvement in several additional end markets, although capital investment remains muted in other key verticals. We are focused on execution of our growth and performance objectives, with differentiated technology, expanded coverage of customers in high-growth end markets, and disciplined capital allocation. These actions position us to deliver near-term results while accelerating the creation of long-term value,” Moret continued.
Following is a discussion of second quarter results for our business segments.
Intelligent Devices
Intelligent Devices second quarter fiscal 2026 sales were $1.0 billion, an increase of 13% compared to $896 million in the same period last year. Organic sales increased 9% and currency translation increased sales by 4%. Segment operating earnings were $211 million compared to $159 million in the same period last year. Segment operating margin increased to 20.9% from 17.7% a year ago. The increase in segment operating margin from prior year was driven by positive price/cost inclusive of productivity, higher sales volume, and favorable mix, partially offset by higher compensation.
Software & Control
Software & Control second quarter fiscal 2026 sales were $684 million, an increase of 20% compared to $568 million in the same period last year. Organic sales increased 17% and currency translation increased sales by 3%. Segment operating earnings were $239 million compared to $171 million in the same period last year. Segment operating margin increased to 34.9% from 30.1% a year ago driven by higher sales volume and positive price/cost inclusive of productivity, partially offset by higher compensation.
Lifecycle Services
Lifecycle Services second quarter fiscal 2026 sales were $547 million, an increase of 2% compared to $537 million in the same period last year. Organic sales decreased (1)% and currency translation increased sales by 3%. Segment operating earnings were $80 million compared to $78 million in the same period last year. Segment operating margin was 14.6% compared to 14.5% a year ago.
Supplemental Information
ARR - Total ARR grew 6% compared to the end of the second quarter of fiscal 2025.
Corporate and other - Fiscal 2026 second quarter Corporate and other expense was $26 million compared to $27 million in the second quarter of fiscal 2025.
Amortization of acquisition-related intangible assets - Fiscal 2026 second quarter Amortization of acquisition-related intangible assets expense was $29 million, compared to $36 million the second quarter of fiscal 2025.
Tax - On a GAAP basis, the effective tax rate in the second quarter of fiscal 2026 was 20.2% compared to 17.1% in the second quarter of fiscal 2025. The Adjusted Effective Tax Rate for the second quarter of fiscal 2026 was 20.6% compared to 17.7% in the prior year. The increase in the effective tax rate and the Adjusted Effective Tax Rate was primarily due to the application of BEPS Pillar Two minimum tax rules.
Share repurchases - During the second quarter of fiscal 2026, the Company repurchased approximately 1.2 million shares of its common stock at a cost of $454 million. At March 31, 2026, approximately $318 million remained available under our existing share repurchase authorization.
Return on Invested Capital (ROIC) - On a GAAP basis, ROIC was 16.5% for the twelve months ended March 31, 2026, compared to 15.2% for the twelve months ended March 31, 2025. Adjusted ROIC was 17.2% for the twelve months ended March 31, 2026, compared to 14.2% for the twelve months ended March 31, 2025.
Net Income and Adjusted EBITDA - Net Income was $351 million for the three months ended March 31, 2026, compared to $248 million for the three months ended March 31, 2025. Adjusted EBITDA was $550 million for the three months ended March 31, 2026, compared to $425 million for the three months ended March 31, 2025. The increase was primarily driven by higher net income.
Definitions
Non-GAAP Measures - Organic sales, Enterprise operating profit, Enterprise operating margin, Adjusted Income, Adjusted EPS, Adjusted Effective Tax Rate, free cash flow, free cash flow conversion, Adjusted ROIC, Adjusted EBITDA, and Adjusted EBITDA margin are non-GAAP measures that are reconciled to GAAP measures in the attachments to this release.
Total ARR - Annual recurring revenue (ARR) is a key metric that enables measurement of progress in growing our recurring revenue business. It represents the annual contract value of all active recurring revenue contracts at any point in time. Recurring revenue is defined as a revenue stream that is contractual, typically for a period of 12 months or more, and has a high probability of renewal. The probability of renewal is based on historical renewal experience of the individual revenue streams, or management's best estimates if historical renewal experience is not available. Total ARR growth is calculated as the dollar change in ARR, adjusted to exclude the effects of currency, divided by ARR as of the prior period. The effects of currency translation are excluded by calculating Total ARR on a constant currency basis. Total ARR includes acquisitions even if there was no comparable ARR in the prior period. We believe that Total ARR provides useful information to investors because it reflects our recurring revenue performance period over period including the effect of acquisitions. Our measure of ARR may be different from measures used by other companies. Because ARR is based on annual contract value, it does not represent revenue recognized during a particular reporting period or revenue to be recognized in future reporting periods and is not intended to be a substitute for revenue, contract liabilities, or backlog.
Organic ARR - Organic annual recurring revenue is Total ARR that excludes comparable ARR in the prior period for the divested businesses.
