Earnings Recap — Q3 FY2026
CY Q3 2026 · Reported August 4, 2026 · Beat 7 of last 7 quarters
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Rockwell's strong quarter underscores the AI infrastructure buildout's ripple effects into industrial automation, with data center, semiconductor, and e-commerce/warehouse driving double-digit growth. The company's Logix controllers are increasingly displacing commercial controls in data center central utility plants, and power infrastructure for data centers is boosting energy vertical growth. This signals sustained demand for automation and control systems across the AI supply chain.
Rockwell delivered Q3 FY2026 organic sales growth of 10% YoY, with reported sales up 8% to $2.313B, beating consensus. Adjusted EPS of $3.49 beat by $0.11, and enterprise operating margin expanded 280 bps to 22.3%. Intelligent Devices grew 10% organically, Software & Control grew 18%, and Lifecycle Services declined 2%. Book-to-bill in Lifecycle Services was 0.97. Organic ARR grew 6%, below expectations, with high single-digit software growth partially offset by slower services growth. Free cash flow was $654M, up $165M YoY. The company repurchased ~300K shares for ~$150M in the quarter.
Management raised full-year FY2026 reported and organic sales growth guidance to 7.5%-9.5% (midpoint 8.5%), up 150 bps from prior, and raised adjusted EPS guidance to $13.00-$13.30 (midpoint $13.15), up $0.35. They maintained enterprise operating margin guidance at 21.5% (up 260 bps YoY) and free cash flow conversion at 100%. They expect Q4 sequential sales up low single digits with flat enterprise margin, as seasonal mix and rising inflation offset volume. They expect price/cost to be positive in Q4 and for the full year, with tariffs EPS-neutral. They see broadening demand across discrete, hybrid, and process, with early signs of renewed CapEx in Automotive and Life Sciences, while Food & Beverage and parts of process remain subdued. They expect North America to be the fastest-growing region for the full year.
“We delivered a strong quarter with double-digit year-over-year growth in sales and earnings exceeding our expectations.”
on Q3 performance
“We now expect both our reported and organic sales growth to be in the 7.5% to 9.5% range for the year.”
on FY2026 guidance
“We are increasing our adjusted EPS guidance range to $13 to $13.30.”
on EPS guidance
Walk us through the price commentary—how much is tariff-based vs underlying, and how do you manage it?
Christian explained that full-year price is expected at 250 bps (100 bps tariff-based, 150 bps underlying). In Q3, tariff-based price was 1% and underlying was near 0 due to timing of price increases. An inflationary price increase was implemented late in Q3, to be realized in Q4. Tariff-based pricing is designed to offset tariff costs, not drive incremental conversion.
What's going to get better over the next 6-12 months given persistent inflation? What structural countermeasures do you have?
Christian noted inflation is increasing (memory, data center demand) but the team is securing component availability and taking pricing actions. Blake highlighted structural changes like fixed discount methodology for faster price realization, more frequent price changes, and alternate sourcing to introduce competition. They expect to offset inflation with price and productivity.
How do you see short-cycle vs large project business tracking into 2027?
Blake said tailwinds are broadening across verticals, not just short-cycle—energy was up high single digits. He cited data center, automotive, life sciences, and labor shortages as drivers. He acknowledged inflation and tariff volatility as headwinds but expressed confidence in Rockwell's position. He noted that excluding data center, organic growth would still have been 8% in Q3.