ROK · Q3 2026 Earnings

Neutral

Rockwell Automation

Reported August 4, 2026

30-second summary

SENTIMENT: Constructive Rockwell beat Q3 consensus on both lines ($2.31B revenue, +2.8% surprise; $3.49 adjusted EPS, +3.3% surprise) with enterprise operating margin at 22.3% and Software & Control up 19% (18% organic). FY26 guidance was raised on both axes: reported/organic sales growth ranges narrowed higher to 7.5%–9.5% (midpoint ~$9.0B, up ~$0.1B from the prior ~$8.9B midpoint) and adjusted EPS midpoint moved up $0.35 to $13.15. The Lifecycle Services reported print of -12% is dominated by the Sensia joint-venture dissolution (-11pt divestiture effect); organic Lifecycle was -2%, a modest deceleration from ~+2% prior. Margin and mix are reinforcing a genuinely clean raise, not covering for it.

Headline numbers

EPS

Q3 FY2026

$3.49

+3.3% vs est.

Revenue

Q3 FY2026

$2.31B

+8.0% YoY

+2.8% vs est.

Gross margin

Q3 FY2026

49.5%

Free cash flow

Q3 FY2026

$0.65B

Operating margin

Q3 FY2026

22.3%

Key financials

Q3 FY2026

Metric	Q3 FY2026	Q3 FY2025	YoY	Q2 FY2026	QoQ
Revenue	$2.31B	$2.14B	+7.9%	$2.24B	+3.3%
EPS	$3.49	$2.82	+23.8%	$3.30	+5.8%
Gross margin	49.5%	40.9%	+860bps	50.2%	-70bps
Operating margin	22.3%	21.2%	+110bps	22.5%	-20bps
Free cash flow	$0.65B	$0.49B	+33.7%	$0.28B	+137.8%

Guidance

Adjusted EPS and GAAP EPS guides raised substantially for FY2026 despite full-year revenue guide lowered, reflecting strong Q3 beat and operational leverage that more than offset demand headwinds.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q3 FY2026	roughly flat sequentially	$2.313B	beat qualitative 'flat' guide with $2.313B actual	Beat
Adjusted EPS	Q3 FY2026	up about $0.05 sequentially, mid to high teens YoY	$3.49	beat YoY guidance range (mid-to-high teens implied ~15-19% YoY; actual ~3.1% QoQ sequential is near low end of guidance)	Beat

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY2026	$8.7B - $9.1B	$8.505B - $8.895B	-0.195B to -0.205B (low end down ~2.2%, high end down ~2.3%)	Raised
Adjusted EPS	FY2026	$12.50 - $13.10	$13.00 - $13.30	+$0.50 to +$0.20 (low end up 4.0%, high end up 1.5%)	Raised
Diluted EPS (GAAP)	FY2026	$11.88 - $12.48	$12.72 - $13.02	+$0.84 to +$0.54 (low end up 7.1%, high end up 4.3%)	Raised
Enterprise Operating Margin	FY2026	21.5%	implied by full-year actuals: 21.4% (full-year EPS conversion suggests operating leverage maintained)	Q3 operating margin 22.3% vs. prior 21.5% guidance midpoint	Raised
Organic ARR Growth	FY2026	high single digits	Withdrawn — no replacement	—	Withdrawn
Free Cash Flow Conversion	FY2026	100%	Withdrawn — no replacement	—	Withdrawn

Reaffirmed unchanged this quarter: Reported Sales Growth (7.5% - 9.5%), Organic Sales Growth (7.5% - 9.5%)

Segment KPIs

Q3 FY2026

Segment	Q3 FY2026	Q3 FY2025	YoY
Intelligent Devices	$1.08B	$0.968B	+11.6%
Software & Control	$0.751B	$0.629B	+19.4%
Lifecycle Services	$0.482B	$0.547B	-11.9%

Other KPIs

Q3 FY2026

Segment	Q3 FY2026	Q3 FY2025	YoY
North America	$1.482B	—	+9.0%
EMEA	$0.404B	—	+3.0%
Asia Pacific	$0.288B	—	+8.0%
Latin America	$0.139B	—	+5.0%
Organic ARR Growth	6% YoY	—	—
Software & Control Segment Operating Margin	34.8%	31.6%	—
Intelligent Devices Segment Operating Margin	20.0%	18.8%	—
Lifecycle Services Segment Operating Margin	15.1%	13.3%	—
Enterprise Operating Margin	22.3%	—	—
Free Cash Flow Conversion	167%	153%	—
ROIC (12-month)	18.4%	—	—
Adjusted ROIC (12-month)	18.8%	—	—

Management tone

Q4 FY25 offensive posture → Q1 FY26 selective upside with guardrails → Q2 FY26 operational raise lands → Q3 FY26: raise extends on both revenue and EPS, on a post-Sensia base.

Transcript not available for this quarter; tone analysis below is grounded in press-release language and the shape of the guidance changes.

CEO Blake Moret framed the quarter around "healthy customer demand, an accelerated pace of innovation, and disciplined execution," calling out semiconductor, data center, warehouse automation, automotive, and life sciences as demand drivers. The updated outlook language — "perform at the high end of our growth framework while expanding margins and investing in innovation" — is consistent with the narrowed-higher growth ranges and the EPS raise.

The most important composition point this quarter is that the Sensia dissolution (completed April 1) mechanically depresses reported Lifecycle Services growth by ~11pt while modestly helping segment margins. On an organic basis, Lifecycle decelerated from ~+2% to -2% — worth watching but not a thesis break. Meanwhile, Intelligent Devices and Software & Control both posted double-digit organic growth (10% and 18% respectively), and enterprise operating margin expanded 280bps YoY to 22.3%.

The one soft spot management chose not to re-guide is organic ARR: three quarters at 6–7% now sits materially below the "high single digits" full-year framing, and the press-release guidance table no longer carries a forward ARR growth number. That is the item to press on when the transcript lands.

Answers to last quarter's watch list

Whether Q3 actual sales clear "roughly flat sequentially" with a positive surprise. Q3 revenue came in at $2.31B, ~$70M above the ~$2.24B implied by "roughly flat" — a ~3% QoQ positive surprise. Status: Resolved positively

Q3 enterprise operating margin holding at or above 22%. Q3 enterprise operating margin printed 22.3%, holding the 22% floor but 20bps below the "flat sequential" ~22.5% implied by prior guidance. Not a beat, but not the sub-22% print that would have signaled H2 inflation biting harder than guided. Status: Resolved positively

Organic ARR re-accelerating to high single digits. Organic ARR came in at +6% YoY — the third consecutive quarter at 6–7%, and materially below the high-single-digit FY guide. The press-release guidance table does not carry a forward ARR growth number. Status: Resolved negatively

H2 free cash flow conversion needs to clear ~130% to land the 100% FY target. Q3 conversion printed 167%. The FY 100% guide is now mechanically achievable with a normal Q4. Status: Resolved positively

Intelligent Devices margin clearing 22% — the lower bound of the target corridor. ID margin came in at 20.0%, down ~90bps sequentially from Q2's 20.9% and moving in the wrong direction. The 22–24% target corridor is now further away, not closer. Status: Resolved negatively

Lifecycle Services organic growth turning positive. Reported revenue printed -12% but organic decelerated only from ~+2% to -2%; the -10pt gap is the Sensia divestiture. A modest organic step down rather than an outright reversal, but the "inflection" thesis is on hold. Status: Continue monitoring

Memory-cost headwind sized vs. realized. Q3 gross margin came in at 49.5% — 50bps below the 50% watch threshold and 70bps below Q2's 50.2%. The headwind appears to be showing up in the print, though not catastrophically. Status: Continue monitoring

What to watch into next quarter

Whether the Q4 implied revenue path is achievable without heroics. YTD FY26 revenue through Q3 is $6,657M. New FY reported sales midpoint of ~$9.0B (range consistent with 7.5%–9.5% growth) implies Q4 of roughly $2.20B–$2.45B (midpoint ~$2.34B), broadly in line with the Q3 run-rate. Watch whether Q4 lands in the top half or bottom half of that band, and note that guidance excludes the divested Sensia businesses in H2.

Lifecycle Services organic stabilization off -2%. Now that the Sensia effect will run for another quarter in the reported line, watch the organic trajectory — a second consecutive organic decline would suggest the underlying demand backdrop is softer than the Q1 book-to-bill (1.16) implied.

Intelligent Devices margin direction. The 20.9% → 20.0% Q2→Q3 slip is the first sequential margin decline in this segment in the FY26 cycle. Q4 needs to reclaim 21%+ or the 22–24% corridor becomes an FY27 story at earliest.

Whether Q4 EPS meaningfully outperforms the implied step-up. FY adjusted EPS guide of $13.00–$13.30 minus YTD adjusted EPS of $9.55 implies Q4 of $3.45–$3.75. A Q4 that clears $3.60+ would validate the operating-leverage story; sub-$3.45 would suggest the FY EPS range was fattened at the low end for cushion rather than conviction.

Whether organic ARR growth accelerates in Q4 or the +6% run-rate persists. Three quarters at 6–7% argues for a permanent reset of the software growth framing from "high single digits" to "mid single digits" — a modest but real de-rating of the recurring-revenue thesis.

Q4 gross margin holding 50%+. Q3 slipped to 49.5%. A sub-49% Q4 gross margin would confirm memory-cost inflation running hotter than assumed.

Sources

Rockwell Automation Q3 FY2026 earnings press release (SEC filing): https://www.sec.gov/Archives/edgar/data/1024478/000102447826000028/q3fy26ex99.htm

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