ROCKWELL AUTOMATION, INC
For the period ended Mar 31, 2026. Filed May 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 5, 2026
ROK$375.86-1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-02-05.
0001024478-26-000005
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-05.
0001024478-26-000022
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 124 previous paragraphs and 133 current paragraphs.
90 unchanged; 29 reworded; 14 added; 4 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
As a result of a U.S. Supreme Court ruling issued in February 2026, the Company may be entitled to a refund of tariffs previously paid on imported products under the International Emergency Economic Powers Act (IEEPA). As of March 31, 2026, the Company has not recognized an asset related to the potential refund. The Company will continue to monitor developments and will recognize a refund when realizable in accordance with ASC 450, Contingencies. If tariff amounts are ultimately refunded, the Company expects to implement a refund process for qualified customers.
Current report
During the second half of the fiscal year, we expect continued inflationary pressures to affect certain cost categories, driven by strong market demand for data centers and continued volatility related to geopolitical tensions in the Middle East. These factors are expected to primarily impact commodities, memory‑related electronic components, energy, and freight costs. Our objective is to mitigate these cost pressures over the remainder of the year through price and supply chain actions.
Current report
(4)Amortization of acquisition-related intangibles excludes amortization of internally developed and capitalized intangible assets. See the Supplemental Segment Information section for our presentation and reconciliation by segment.
Current report
Income before income taxes increased to $440 million and $782 million in the three and six months ended March 31, 2026, respectively, from $299 million and $512 million in the three and six months ended March 31, 2025, respectively.
Current report
Pre-tax margin was 19.7 percent and 18.0 percent in the three and six months ended March 31, 2026, respectively, compared to 14.9 percent and 13.2 percent in the three and six months ended March 31, 2025, respectively. Enterprise operating margin was 22.5 percent and 20.9 percent in the three and six months ended March 31, 2026, respectively, compared to 19.0 percent and 17.2 percent in the three and six months ended March 31, 2025, respectively. For both the three and six months ended March 31, 2026, pre-tax margin and Enterprise operating margin increased primarily due to higher sales volume, positive impact of price realization exceeding input costs, including productivity, and favorable mix, partially offset by higher compensation.
Current report
The effective tax rates for the three and six months ended March 31, 2026, were 20.2 percent and 16.5 percent, respectively, compared to 17.1 percent and 16.8 percent for the three and six months ended March 31, 2025, respectively. Our Adjusted Effective Tax Rates for the three and six months ended March 31, 2026, were 20.6 percent and 19.1 percent, respectively, compared to 17.7 percent for both the three and six months ended March 31, 2025. The increases in the effective tax rate and the Adjusted Effective Tax Rate were primarily due to the application of BEPS Pillar Two minimum tax rules in Singapore offset by favorable discrete tax items in the first quarter of fiscal year 2026.
Current report
Net income attributable to Rockwell Automation was $655 million or $5.79 per share in the six months ended March 31, 2026, compared to $436 million or $3.83 per share in the six months ended March 31, 2025. The increases in Net income attributable to Rockwell Automation and diluted EPS were primarily due to higher pre-tax margin. Adjusted EPS was $6.05 in the six months ended March 31, 2026, up 39 percent compared to $4.35 in the six months ended March 31, 2025, primarily due to higher Enterprise operating margin.
Current report
Intelligent Devices sales increased 13 percent and 15 percent year over year in the three and six months ended March 31, 2026, respectively. Organic sales increased 9 percent and 13 percent year over year in the three and six months ended March 31, 2026, respectively. The effects of currency translation increased sales by 4 percent and 2 percent year over year in the three and six months ended March 31, 2026. For the three months ended March 31, 2026, reported and organic sales increased in all regions. For the six months ended March 31, 2026, reported sales increased in all regions, while organic sales increased in all regions except for Latin America.
Current report
Intelligent Devices segment operating earnings increased 33 percent year over year in the three months ended March 31, 2026. Segment operating margin increased to 20.9 percent in the three months ended March 31, 2026, from 17.7 percent in the same period a year ago, primarily due to positive impact of price realization exceeding input costs, including productivity, higher sales volume, and favorable mix, partially offset by higher compensation.
Current report
Intelligent Devices segment operating earnings increased 35 percent year over year in the six months ended March 31, 2026. Segment operating margin increased to 19.2 percent in the six months ended March 31, 2026, from 16.4 percent in the same period a year ago, primarily due to higher sales volume, positive impact of price realization exceeding input costs, including productivity, and favorable mix, partially offset by higher compensation.
Current report
Software & Control segment operating earnings increased 40 percent year over year in the three months ended March 31, 2026. Segment operating margin increased to 34.9 percent in the three months ended March 31, 2026, from 30.1 percent in the same period a year ago, primarily due to higher sales volume and positive impact of price realization exceeding input costs, including productivity, partially offset by higher compensation.
Current report
Lifecycle Services segment operating earnings increased 3 percent year over year in the three months ended March 31, 2026. Segment operating margin increased to 14.6 percent in the three months ended March 31, 2026, from 14.5 percent in the same period a year ago.
Current report
(1)Amortization of acquisition-related intangible assets does not include amortization for intangibles internally developed, which is included in segment operating earnings. For the three and six months ended March 31, 2026, the amortization expense for internally developed intangible amortization was $4 million and $6 million, respectively.
Current report
The Company adjusts its non-GAAP results to exclude Amortization of acquisition-related intangible assets as such amounts are significantly impacted by the timing and/or size of acquisitions. Management believes that the adjustment of Amortization of acquisition-related intangible assets supplements the GAAP information with a measure that can be used to assess the comparability of operating performance between periods and as compared to industry peers. Although the Company excludes Amortization of acquisition-related intangible assets from its non-GAAP expenses, management believes that it is important for investors to understand that such intangible assets were recorded as part of an acquisition and contribute to revenue generation.
Removed paragraphs (4)
Previous report
Income before income taxes increased to $342 million in the three months ended December 31, 2025, from $213 million in the three months ended December 31, 2024. Pre-tax margin was 16.2% in the first quarter of 2026 compared to 11.3% in the first quarter of 2025. Total segment operating earnings increased to $435 million in the three months ended December 31, 2025, from $321 million in the three months ended December 31, 2024. Total segment operating margin in the first quarter of 2026 was 20.7% compared to 17.1% in the first quarter of 2025. Pre-tax margin and total segment operating margin increased primarily due to higher sales volume, positive impact of price realization exceeding input costs, including productivity, and favorable mix, partially offset by higher compensation.
Previous report
The effective tax rate for the three months ended December 31, 2025, was 11.7 percent compared to 16.4 percent for the three months ended December 31, 2024. The decrease in the effective tax rate was primarily due to higher discrete tax benefits, including a tax benefit related to the anticipated dissolution of the Sensia joint venture, and excess income tax benefits on share-based compensation. Our Adjusted Effective Tax Rate for the three months ended December 31, 2025, was 17.3 percent compared to 17.7 percent for the three months ended December 31, 2024.
Previous report
In October 2021, the Organization for Economic Cooperation and Development (OECD) and G20 Finance Ministers reached an agreement, known as Base Erosion and Profit Shifting (BEPS) Pillar Two, that, among other things, ensures that income earned in each jurisdiction that qualifying multinational enterprises operate in is subject to a minimum corporate income tax rate of at least 15 percent. Discussions related to the formal implementation and enactment of this agreement, including within the tax law of each member jurisdiction including the United States, are ongoing. Certain countries have enacted the Pillar Two framework, including Singapore, which is expected to result in the greatest impact to the Company. The enactment of this regulation applies beginning this fiscal year, resulting in an approximate increase in our effective tax rate of 3 percent as well as in the amount of global corporate income tax paid. Furthermore, the side-by-side agreement released by the OECD on January 5, 2026, has not altered the anticipated increase in our effective tax rate.
Previous report
Intelligent Devices segment operating earnings increased 38 percent year over year in the three months ended December 31, 2025. Segment operating margin increased to 17.3 percent in the three months ended December 31, 2025, from 14.9 percent in the same period a year ago, primarily due to higher sales volume, partially offset by the effects of currency translation and higher compensation.
Reworded paragraphs (29)
Previous wording
The following discussion includes organic sales, total segment operating earnings and margin, Adjusted Income, Adjusted EPS, Adjusted Effective Tax Rate, and free cash flow, which are non-GAAP measures. See Supplemental Sales Information for a reconciliation of reported sales to organic sales and a discussion of why we believe this non-GAAP measure is useful to investors. See Summary of Results of Operations for a reconciliation of Income before income taxes to total segment operating earnings and margin and a discussion of why we believe these non-GAAP measures are useful to investors. See Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate Reconciliation for a reconciliation of Net income attributable to Rockwell Automation, diluted EPS, and effective tax rate to Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate, respectively, and a discussion of why we believe these non-GAAP measures are useful to investors. See Financial Condition for a reconciliation of Cash provided by operating activities to free cash flow and a disc ussion of why we believe this non-GAAP measure is useful to investors.
Current wording
The following discussion includes organic sales, Enterprise operating profit, Enterprise operating margin, Adjusted Income, Adjusted EPS, Adjusted Effective Tax Rate, and free cash flow, which are non-GAAP measures. See Supplemental Sales Information for a reconciliation of reported sales to organic sales and a discussion of why we believe this non-GAAP measure is useful to investors. See Summary of Results of Operations for a reconciliation of Income before income taxes and pre-tax margin to Enterprise operating profit and Enterprise operating margin and a discussion of why we believe these non-GAAP measures are useful to investors. See Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate Reconciliation for a reconciliation of Net income attributable to Rockwell Automation, diluted EPS, and effective tax rate to Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate, respectively, and a discussion of why we believe these non-GAAP measures are useful to investors. See Financial Condition for a reconciliation of Cash provided by operating activities to free cash flow and a disc ussion of why we believe this non-GAAP measure is useful to investors.
Previous wording
In the first quarter of 2026, sales in the U.S. accounted for over half of our total sales. The various indicators we use to gauge the direction and momentum of our served U.S. markets include:
Current wording
In the second quarter of 2026, sales in the U.S. accounted for over half of our total sales. The various indicators we use to gauge the direction and momentum of our served U.S. markets include:
Previous wording
The table below depicts trends in these indicators since the quarter ended September 2024. These figures are as of February 5, 2026, and are subject to revision by the issuing organizations. Through December, the IP index did not significantly change from the fourth quarter of fiscal 2025. Manufacturing PMI results remained below 50 for each of the months in the fourth quarter of fiscal 2025 and have been below 50 for ten consecutive months. In January 2026, Manufacturing PMI increased to 52.6, 4.7 points higher than December 2025, and the highest level since August 2022.
Current wording
The table below depicts trends in these indicators since the quarter ended September 2024. These figures are as of May 5, 2026, and are subject to revision by the issuing organizations. Through March, the IP index increased versus the first quarter of fiscal 2026. Manufacturing PMI results increased as well during the second quarter of fiscal 2026, with January, February, and March registering readings above 50 and the highest levels in over three years.
Previous wording
Inflation in the U.S. has also had an impact on our input costs and pricing. The Producer Price Index (PPI), published by the Bureau of Labor Statistics, measures the average change over time in the selling prices received by domestic producers for their output. PPI growth did not significantly change from the fourth quarter of 2025, and remains in the low single digits.
Current wording
Inflation in the U.S. has also had an impact on our input costs and pricing. The Producer Price Index (PPI), published by the Bureau of Labor Statistics, measures the average change over time in the selling prices received by domestic producers for their output. PPI growth did not significantly change from the first quarter of 2026, and remains in the low single digits.
Previous wording
In the first quarter of 2026, sales to customers outside the U.S. accounted for less than half of our total sales. These customers include both indigenous companies and multinational companies with a global presence. In addition to the global factors previously mentioned in the Overview section, international demand, particularly in emerging markets, has historically been driven by the strength of the industrial economy in each region, investments in infrastructure, and expanding consumer markets. We use changes in key countries' gross domestic product (GDP), IP, and PMI as indicators of the growth opportunities in each region where we do business. Industrial output outside the U.S. was mostly positive in the first quarter of fiscal 2026. Manufacturing PMI readings outside the U.S were mixed with readings in Asia Pacific generally better than readings in Europe, Canada, Mexico, and Brazil.
Current wording
In the second quarter of 2026, sales to customers outside the U.S. accounted for less than half of our total sales. These customers include both indigenous companies and multinational companies with a global presence. In addition to the global factors previously mentioned in the Overview section, international demand, particularly in emerging markets, has historically been driven by the strength of the industrial economy in each region, investments in infrastructure, and expanding consumer markets. We use changes in key countries' gross domestic product (GDP), IP, and PMI as indicators of the growth opportunities in each region where we do business. Industrial output outside the U.S. was mostly positive in the second quarter of fiscal 2026. Manufacturing PMI readings outside the U.S were mostly positive as well except for Mexico and Brazil where readings remained below 50.
Previous wording
We continue to manage the impact of tariffs through actions including pricing and the use of alternative sources of materials and redundant manufacturing locations. Resiliency actions we took in recent years enable us to build certain high value product lines in more than one geographic location. In consideration of these mitigating actions, tariff costs are expected to be neutral to EPS in fiscal 2026.
Current wording
We continue to manage the impact of tariffs through actions including pricing and the use of alternative sources of materials and redundant manufacturing locations. Resiliency actions we took in recent years enable us to build certain high value product lines in more than one geographic location. We are still expecting that pricing actions will recover all tariff costs this year.
Previous wording
In the first quarter of 2026, we announced plans to build a new greenfield manufacturing site in Southeastern Wisconsin, and in the second quarter we confirmed New Berlin, Wisconsin as the specific site location. The facility has the potential to be the company’s largest manufacturing campus globally, with a significant footprint and the flexibility to scale operations. Additionally, in January we completed the purchase of our Mequon, Wisconsin facility, which we had previously leased and continue to use for engineering and development and manufacturing. These projects are aligned with the previously announced $2 billion investment in plants, digital infrastructure, and talent to grow share, build resilience, and expand margins over the next five years.
Current wording
In the first quarter of 2026, we announced plans to build a new greenfield manufacturing site in Southeastern Wisconsin, and in the second quarter we confirmed New Berlin, Wisconsin as the specific site location. The facility is expected to be the company’s largest manufacturing campus globally, with a significant footprint and the flexibility to scale operations. Additionally, in January we completed the purchase of our Mequon, Wisconsin facility, which we had previously leased and continue to use for engineering and development and manufacturing. These projects are aligned with the previously announced $2 billion investment in plants, digital infrastructure, and talent to grow share, build resilience, and expand margins over the next five years.
Previous wording
(3) Legacy asbestos and environmental charges were previously included in Corporate and other. Three months ended December 31, 2024 has been recast to conform to current year presentation.
Current wording
(2) Legacy asbestos and environmental charges were previously included in Corporate and other. Three and six months ended March 31, 2025 have been recast to conform to current year presentation.
Previous wording
(2)Total segment operating earnings and total segment operating margin are non-GAAP financial measures. We exclude purchase accounting depreciation and amortization, corporate and other, non-operating pension and postretirement benefit credit, net legacy asbestos and environmental charges, cost associated with dissolution of Sensia, change in fair value of investments, restructuring charges aligned with enterprise-wide strategic initiatives, and interest expense, net because we do not consider these items to be directly related to the operating performance of our segments. We believe total segment operating earnings and total segment operating margin are useful to investors as measures of operating performance. We use these measures to monitor and evaluate the profitability of our operating segments. Our measures of total segment operating earnings and total segment operating margin may be different from measures used by other companies.
Current wording
(3)Enterprise operating profit and Enterprise operating margin are non-GAAP financial measures. We exclude from income before income taxes and pre-tax margin amortization of acquisition-related intangible assets, impairment, non-operating pension and postretirement benefit credit, net legacy asbestos and environmental charges, change in fair value of investments, restructuring charges aligned with enterprise-wide strategic initiatives, cost associated with dissolution of Sensia, and interest expense, net because we do not consider these items to be directly related to the operating performance of our enterprise. We believe Enterprise operating profit and Enterprise operating margin are useful to investors as measures of operating performance. We use these measures to monitor and evaluate the profitability of our operating enterprise. Our measures of Enterprise operating profit and Enterprise operating margin may be different from measures used by other companies.
Previous wording
(4)Adjusted EPS is a non-GAAP earnings measure. See Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate Reconciliation for more information on this non-GAAP measure.
Current wording
(5)Adjusted EPS is a non-GAAP earnings measure. See Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate Reconciliation for more information on this non-GAAP measure.
Previous wording
Three Months Ended December 31, 2025, Compared to Three Months Ended December 31, 2024
Current wording
Three and Six Months Ended March 31, 2026, Compared to Three and Six Months Ended March 31, 2025
Previous wording
Sales increased 12 percent year over year in the three months ended December 31, 2025. Organic sales increased 10 percent year over year in the three months ended December 31, 2025. Currency translation increased sales by 2 percent in the three months ended December 31, 2025. Volume increased total company sales by approximately 7 percent year over year in the three months ended December 31, 2025, driven by the Software & Control and Intelligent Devices segments. Pricing increased total company sales by approximately 3 percent year over year in the three months ended December 31, 2025, driven by the Intelligent Devices segment.
Current wording
Sales increased 12 percent year over year in both the three and six months ended March 31, 2026. Organic sales increased 9 percent year over year in both the three and six months ended March 31, 2026. Currency translation increased sales by 3 percent in both the three and six months ended March 31, 2026. Pricing contributed 3 percentage points to organic growth year over year in both the three and six months ended March 31, 2026.
Previous wording
The table below presents our sales, attributed to the geographic regions based upon country of destination, and the percentage change from the same period a year ago (in millions, except percentages):
Current wording
The tables below present our sales, attributed to the geographic regions based upon country of destination, and the percentage change from the same period a year ago (in millions, except percentages):
Previous wording
Corporate and other expenses were $30 million in the three months ended December 31, 2025, compared to $35 million in the three months ended December 31, 2024.
Current wording
Corporate and other expenses were $26 million and $56 million in the three and six months ended March 31, 2026, respectively, compared to $27 million and $62 million in the three and six months ended March 31, 2025, respectively.
Previous wording
Fiscal 2026 first quarter Net income attributable to Rockwell Automation was $305 million or $2.69 per share, compared to $184 million or $1.61 per share in the first quarter of fiscal 2025. The increases in Net income attributable to Rockwell Automation and diluted EPS were primarily due to higher pre-tax margin and a lower effective tax rate. Adjusted EPS was $2.75 in the first quarter of 2026, up 49 percent compared to $1.85 in the first quarter of 2025, primarily due to higher segment operating margin.
Current wording
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 2025. The increases in Net income attributable to Rockwell Automation and diluted EPS were primarily due to higher pre-tax margin. Adjusted EPS was $3.30 in the second quarter 2026, up 32 percent compared to $2.50 in the second quarter of 2025, primarily due to higher Enterprise operating margin.
Previous wording
Software & Control sales increased 19 percent year over year in the three months ended December 31, 2025. Organic sales increased 17 percent year over year, and the effects of currency translation increased sales by 2 percent year over year in the three months ended December 31, 2025. For the three months ended December 31, 2025, reported and organic sales increased in all regions.
Current wording
Software & Control sales increased 20 percent year over year in both the three and six months ended March 31, 2026. Organic sales increased 17 percent year over year in both the three and six months ended March 31, 2026. The effects of currency translation increased sales by 3 percent year over year in both the three and six months ended March 31, 2026. For the three months ended March 31, 2026, reported sales increased in all regions, while organic sales increased in all regions except for Latin America. For the six months ended March 31, 2026, reported and organic sales increased in all regions.
Previous wording
Software & Control segment operating earnings increased 47 percent year over year in the three months ended December 31, 2025. Segment operating margin increased to 31.2 percent in the three months ended December 31, 2025, from 25.1 percent in the same period a year ago, primarily due to higher sales volume, partially offset by higher compensation.
Current wording
Software & Control segment operating earnings increased 43 percent year over year in the six months ended March 31, 2026. Segment operating margin increased to 33.1 percent in the six months ended March 31, 2026, from 27.7 percent in the same period a year ago, primarily due to higher sales volume, partially offset by higher compensation.
Previous wording
Intelligent Devices sales increased 18 percent year over year in the three months ended December 31, 2025. Organic sales increased 16 percent year over year, and the effects of currency translation increased sales by 2 percent year over year in the three months ended December 31, 2025. For the three months ended December 31, 2025, reported sales increased in all regions, except for Latin America, and organic sales increased in North America and Asia-Pacific, while decreasing in Latin America and Europe, Middle East, and Africa.
Current wording
Lifecycle Services sales increased 2 percent and decreased 1 percent year over year in the three and six months ended March 31, 2026, respectively. Organic sales decreased 1 percent and 4 percent year over year in the three and six months ended March 31, 2026, respectively. The effects of currency translation increased sales by 3 percent year over year in the three and six months ended March 31, 2026. For the three months ended March 31, 2026, reported and organic sales increased in Europe, Middle East, and Africa and Asia Pacific, while decreasing in North America and Latin America. For the six months ended March 31, 2026, reported and organic sales decreased in all regions, except Europe, Middle East, and Africa.
Previous wording
Lifecycle Services segment operating earnings increased 9 percent year over year in the three months ended December 31, 2025. Segment operating margin increased to 14.1 percent in the three months ended December 31, 2025, from 12.5 percent in the same period a year ago, primarily due to productivity and project execution, partially offset by lower sales volume and higher compensation.
Current wording
Lifecycle Services segment operating earnings increased 5 percent year over year in the six months ended March 31, 2026. Segment operating margin increased to 14.4 percent in the six months ended March 31, 2026, from 13.5 percent in the same period a year ago, primarily due to strong project execution, partially offset by higher compensation.
Previous wording
Purchase accounting depreciation and amortization and non-operating pension and postretirement benefit credit are not allocated to our operating segments because these costs are excluded from our measurement of each segment's operating performance for internal purposes. If we were to allocate these costs, we would attribute them to each of our segments as follows (in millions):
Current wording
Amortization of acquisition-related intangible assets and non-operating pension and postretirement benefit credit are not allocated to our operating segments because these costs are excluded from our measurement of each segment's operating performance for internal purposes. If we were to allocate these costs, we would attribute them to each of our segments as follows (in millions):
Previous wording
Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate are non-GAAP earnings measures that exclude non-operating pension and postretirement benefit credit, purchase accounting depreciation and amortization attributable to Rockwell Automation, net legacy asbestos and environmental charges, cost and tax items associated with dissolution of Sensia attributable to Rockwell Automation, change in fair value of investments, and restructuring charges aligned with enterprise-wide strategic initiatives, including their respective tax effects. See Note 9 in the Consolidated Financial Statements for more information on our net periodic pension and postretirement benefit cost.
Current wording
Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate are non-GAAP earnings measures that exclude non-operating pension and postretirement benefit credit, amortization of acquisition-related intangible assets, net legacy asbestos and environmental charges, cost and tax items associated with dissolution of Sensia attributable to Rockwell Automation, change in fair value of investments, and restructuring charges aligned with enterprise-wide strategic initiatives, including their respective tax effects. See Note 9 in the Consolidated Financial Statements for more information on our net periodic pension and postretirement benefit cost.
Previous wording
In fiscal 2026, we updated the definition of our non-GAAP earnings measures to exclude cost, net of tax, and tax items associated with the anticipated dissolution of the Sensia joint venture attributable to Rockwell Automation. We recognized these costs and tax items in fiscal 2026 in conjunction with a fiscal 2025 decision by the partners to pursue dissolution, which is expected to close on April 1, 2026. We believe the change to our definition provides a more useful presentation of our operating performance to investors as these costs and tax effects are not reflective of our ongoing operations. We did not revise prior years because there were no similar amounts.
Current wording
In fiscal 2026, we updated the definition of our non-GAAP earnings measures to exclude cost, net of tax, and tax items associated with the April 1, 2026 dissolution of the Sensia joint venture. We believe the change to our definition provides a more useful presentation of our operating performance to investors as these costs and tax effects are not reflective of our ongoing operations. We did not revise prior years because there were no similar amounts.
Previous wording
Cash provided by operating activities was $234 million for the three months ended December 31, 2025, compared to $364 million for the three months ended December 31, 2024. Free cash flow was $170 million for the three months ended December 31, 2025, compared to $293 million for the three months ended December 31, 2024. The year over year decreases in cash provided by operating activities and free cash flow were primarily due to the payout of incentive compensation in the first quarter of fiscal 2026 related to fiscal 2025 performance while no incentive compensation was paid in fiscal 2025 related to fiscal 2024 performance, and increases in working capital, partially offset by higher pre-tax income.
Current wording
Cash provided by operating activities was $554 million for the six months ended March 31, 2026, compared to $563 million for the six months ended March 31, 2025. Free cash flow was $445 million for the six months ended March 31, 2026, compared to $464 million for the six months ended March 31, 2025. The year over year decreases in cash provided by operating activities and free cash flow were primarily due to the payout of incentive compensation in fiscal 2026 related to fiscal 2025 performance while no incentive compensation was paid in fiscal 2025 related to fiscal 2024 performance, and increases in working capital, partially offset by higher pre-tax income.
Previous wording
Our Short-term debt as of December 31, 2025, included commercial paper borrowings of $671 million, with a weighted average interest rate of 3.89 percent, and a weighted average maturity period of 32 days. Our Short-term debt as of September 30, 2025, included commercial paper borrowings of $522 million, with a weighted average interest rate of 4.24 percent, and a weighted average maturity period of 16 days. Included in Current portion of long-term debt as of December 31, 2025, was $62 million related to the purchase of the Mequon facility in January 2026, referenced in Note 1 in the Consolidated Financial Statements.
Current wording
Our Short-term debt as of March 31, 2026, included commercial paper borrowings of $1,025 million with a weighted average interest rate of 4.00 percent, and a weighted average maturity period of 28 days. Our Short-term debt as of September 30, 2025, included commercial paper borrowings of $522 million, with a weighted average interest rate of 4.24 percent, and a weighted average maturity period of 16 days.
Previous wording
In December 2022, Sensia entered into an unsecured $75 million line of credit. There were no borrowings outstanding under the line of credit as of December 31, 2025, as the credit line matured and closed and outstanding debt was settled with loans from the joint venture partners. As of September 30, 2025, included in Short-term debt was $70 million borrowed against the line of credit with an interest rate of 5.18 percent. Also included in Short-term debt as of December 31, 2025, were the following interest-bearing loans from Schlumberger (SLB) to Sensia: $42 million due October 15, 2026, $14 million which in February 2026 was extended to be due June 15, 2026, and $33 million entered into in December 2025, and due June 10, 2026. As of September 30, 2025, the $14 million of interest-bearing loans and $42 million of interest-bearing loans were included in Short-term debt and Long-term debt, respectively. Pursuant to the separation agreement referenced in Note 1 in the Consolidated Financial Statements, all intercompany debt will be settled by the joint venture parents upon dissolution.
Current wording
In December 2022, Sensia entered into an unsecured $75 million line of credit. There were no borrowings outstanding under the line of credit as of December 31, 2025, as the credit line matured and closed and outstanding debt was settled with loans from the joint venture partners. As of September 30, 2025, included in Short-term debt was $70 million borrowed against the line of credit with an interest rate of 5.18 percent. Also included in Short-term debt as of March 31, 2026, were the following interest-bearing loans from Schlumberger (SLB) to Sensia: $42 million due October 15, 2026, $14 million due June 15, 2026, and $33 million due June 10, 2026. As of September 30, 2025, the $14 million and $42 million of interest-bearing loans were included in Short-term debt and Long-term debt, respectively. Pursuant to the separation agreement referenced in Note 1 in the Consolidated Financial Statements, all intercompany debt was settled by the joint venture partners upon dissolution.
Previous wording
We repurchased approximately 0.4 million shares of our common stock under our share repurchase program in the first three months of 2026. The total cost of these shares was $154 million, of which $2 million was recorded in Accounts payable at December 31, 2025, related to shares that did not settle until January 2026. Excise tax of $1 million was paid during the three months ended December 31, 2024, related to our 2023 share repurchases. At September 30, 2025, there were $1 million of outstanding common stock share repurchases recorded in Accounts payable. We repurchased approximately 0.4 million shares of our common stock under our share repurchase program in the first three months of 2025. The total cost of these shares was $99 million, of which $1 million was recorded in Accounts payable at December 31, 2024, related to shares that did not settle until January 2025. Our decision to repurchase shares in the remainder of 2026 will depend on business conditions, free cash flow generation, other cash requirements, and stock price. At December 31, 2025, we had approximately $773 million remaining for share repurchases under our existing board authorization. See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, for additional information regarding share repurchases.
Current wording
We repurchased approximately 1.6 million shares of our common stock under our share repurchase program in the first six months of 2026. The total cost of these shares was $608 million, of which $12 million was recorded in Accounts payable at March 31, 2026, related to shares that did not settle until April 2026. Excise tax of $2 million was paid during the three months ended March 31, 2026, related to our 2026 share repurchases. At September 30, 2025, there were $1 million of outstanding common stock share repurchases recorded in Accounts payable. We repurchased approximately 0.8 million shares of our common stock under our share repurchase program in the first six months of 2025. The total cost of these shares was $228 million, of which $3 million was recorded in Accounts payable at March 31, 2025, related to shares that did not settle until April 2025. Our decision to repurchase shares in the remainder of 2026 will depend on business conditions, free cash flow generation, other cash requirements, and stock price. At March 31, 2026, we had approximately $318 million remaining for share repurchases under our existing board authorization. See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, for additional information regarding share repurchases.
Previous wording
We expect future uses of cash to include capital expenditures, working capital requirements, dividends to shareowners, repurchases of common stock, repayments of debt, additional contributions to our retirement plans, and acquisitions of businesses and other inorganic investments. We expect to fund future uses of cash with a combination of existing cash balances, cash generated by operating activities, commercial paper borrowings, or new issuances of debt or other securities. In addition, we have access to unsecured credit facilities with various banks.
Current wording
We expect future uses of cash to include capital expenditures, working capital requirements, dividends to shareowners, repurchases of common stock, repayment of debt, additional contributions to our retirement plans, and acquisitions of businesses and other inorganic investments. We expect to fund future uses of cash with a combination of existing cash balances, cash generated by operating activities, commercial paper borrowings, or new issuances of debt or other securities. In addition, we have access to unsecured credit facilities with various banks.
Previous wording
Separate short-term unsecured credit facilities of approximately $276 million at December 31, 2025, were available to non-U.S. subsidiaries, of which, approximately $35 million was committed under letters of credit. Borrowings under our non-U.S. credit facilities at December 31, 2025, and September 30, 2025, were not significant. We were in compliance with all covenants under our credit facilities at December 31, 2025, and September 30, 2025. There are no significant commitment fees or compensating balance requirements under our credit facilities.
Current wording
Separate short-term unsecured credit facilities of approximately $275 million at March 31, 2026, were available to non-U.S. subsidiaries, of which, approximately $35 million was committed under letters of credit. Borrowings under our non-U.S. credit facilities at March 31, 2026, and September 30, 2025, were not significant. We were in compliance with all covenants under our credit facilities at March 31, 2026, and September 30, 2025. There are no significant commitment fees or compensating balance requirements under our credit facilities.
Previous wording
Net gains and losses related to derivative forward exchange contracts designated as cash flow hedges offset the related gains and losses on the hedged items during the periods in which the hedged items are recognized in earnings. During the three months ended December 31, 2025, we reclassified $1 million in pre-tax net losses related to cash flow hedges from Accumulated other comprehensive loss into the Consolidated Statement of Operations. Pre-tax net losses related to cash flow hedges reclassified from Accumulated other comprehensive loss into the Consolidated Statement of Operations were not significant during the three months ended December 31, 2024. As of December 31, 2025, we expect that approximately $9 million of pre-tax net unrealized losses on cash flow hedges will be reclassified into earnings during the next 12 months.
Current wording
Net gains and losses related to derivative forward exchange contracts designated as cash flow hedges offset the related gains and losses on the hedged items during the periods in which the hedged items are recognized in earnings. During the three and six months ended March 31, 2026, we reclassified $3 million and $4 million, respectively, in pre-tax net losses related to cash flow hedges from Accumulated other comprehensive loss into the Consolidated Statement of Operations. During both the three and six months ended March 31, 2025, we reclassified $7 million in pre-tax net gains related to cash flow hedges from Accumulated other comprehensive loss into the Consolidated Statement of Operations. As of March 31, 2026, we expect that approximately $6 million of pre-tax net unrealized losses on cash flow hedges will be reclassified into earnings during the next 12 months.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Lifecycle Services sales decreased 4 percent year over year in the three months ended December 31, 2025. Organic sales decreased 6 percent, and the effects of currency translation increased sales by 2 percent year over year in the three months ended December 31, 2025. For the three months ended December 31, 2025, reported and organic sales decreased in all regions, except Europe, Middle East and Africa.