Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains statements (including certain projections and business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Words such as “believe”, “estimate”, “project”, “plan”, “expect”, “anticipate”, “will”, “intend”, and other similar expressions may identify forward-looking statements. Actual results may differ materially from those projected as a result of certain risks and uncertainties, many of which are beyond our control, including but not limited to:

• macroeconomic factors, including inflation, global and regional business conditions (including adverse impacts in certain markets, such as Oil & Gas), commodity prices, currency exchange rates, the cyclical nature of our customers’ capital spending, and sovereign debt concerns;

• laws, regulations, and governmental policies affecting our activities in the countries where we do business, including those related to tariffs, taxation, trade controls, cybersecurity, and climate change;

• our profitability and market competitiveness may be adversely impacted by changes in trade policies, including tariffs or other factors;

• the severity and duration of disruptions to our business due to natural disasters (including those as a result of climate change), pandemics, acts of war, strikes, terrorism, social unrest, or other causes;

• the availability and price of components and materials;

• the availability, effectiveness, and security of our information technology systems;

• our ability to manage and mitigate the risk related to security vulnerabilities and breaches of our hardware and software products, solutions, and services;

• the successful execution of our cost productivity and margin expansion initiatives;

• our ability to attract, develop, and retain qualified employees;

• the successful integration and management of strategic transactions and achievement of the expected benefits of these transactions;

• the successful development of advanced technologies and demand for and market acceptance of new and existing hardware and software products;

• our ability to manage and mitigate the risks associated with our solutions and services businesses;

• competitive hardware and software products, solutions, and services, pricing pressures, and our ability to provide high quality products, solutions, and services;

• the availability and cost of capital;

• disruptions to our distribution channels or the failure of distributors to develop and maintain capabilities to sell our products;

• intellectual property infringement claims by others and the ability to protect our intellectual property;

• the uncertainty of claims by taxing authorities in the various jurisdictions where we do business;

• the uncertainties of litigation, including liabilities related to the safety and security of the hardware and software products, solutions, and services we sell;

• our ability to manage costs related to employee retirement and health care benefits; and

• other risks and uncertainties, including but not limited to those detailed from time to time in our Securities and Exchange Commission (SEC) filings.

These forward-looking statements reflect our beliefs as of the date of filing this report. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. See Item 1A. Risk Factors, of our Annual Report on Form 10-K for the year ended September 30, 2024, and Item 1A. Risk Factors, of this Quarterly Report on Form 10-Q for more information.

Non-GAAP Measures

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 O****perations 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 discussion of why we believe this non-GAAP measure is useful to investors.

Overview

Rockwell Automation, Inc. is the world’s largest company dedicated to industrial automation and digital transformation. Overall demand for our hardware and software products, solutions, and services is driven by:

• investments in manufacturing, including new facilities or production lines, upgrades, modifications and expansions of existing facilities or production lines;

• investments in basic materials production capacity, which may be related to commodity pricing levels;

• our customers’ needs for faster time to market, agility to address evolving consumer preferences, operational productivity, asset management and reliability, and business resilience, including security and enterprise risk management;

• our customers’ needs to continuously improve quality, safety, and sustainability;

• industry factors that include our customers’ new product introductions, demand for our customers’ products or services, and the regulatory and competitive environments in which our customers operate;

• levels of global industrial production and capacity utilization;

• regional factors that include local political, social, regulatory, and economic circumstances; and

• the spending patterns of our customers due to their annual budgeting processes and their working schedules.

Long-term Strategy

As the world’s largest company dedicated to industrial automation and digital transformation, our strategy is to bring the Connected Enterprise® to life. We understand and simplify our customers’ complex production challenges and deliver the most valued solutions that combine technology and industry expertise. As a result, we make our customers more resilient, agile, and sustainable, creating more ways to win. We deliver value by helping our customers optimize production, build resilience, empower people, become more sustainable, and accelerate transformation.

Rockwell Automation stands at the intersection of the technological and societal trends that are shaping the future of industrial operations. We see converging megatrends including digitization and artificial intelligence, energy transition and sustainability, shifting demographics, and an increased need for resiliency.

Our long-term profitable growth framework outlines how we will deliver accelerated growth while we continue to transform our company to meet stakeholder expectations over the longer term:

• achieve faster secular growth in traditional markets due to customer needs for resiliency (including cybersecurity), agility, sustainability, and mitigating impacts of labor shortages;

• grow share and create new ways to win through technology differentiation, industry focus, go to market acceleration, expanded offerings and new markets;

• continue double-digit growth in annual recurring revenue;

• add 1% average annual growth from acquisitions; and

• deliver profitable growth within a disciplined financial framework.

U.S. Economic Trends

In the third quarter of 2025, 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:

• The Industrial Production (IP) Index, published by the Federal Reserve, which measures the real output of manufacturing, mining, and electric and gas utilities. The Manufacturing IP Index shown in the chart below is expressed as a percentage of real output in a base year, currently 2017.

• The Manufacturing Purchasing Managers’ Index (PMI), published by the Institute for Supply Management (ISM), which indicates the current and near-term state of manufacturing activity in the U.S. According to the ISM, a PMI measure above 50 indicates that the U.S. manufacturing economy is generally expanding while a measure below 50 indicates that it is generally contracting.

The table below depicts trends in these indicators since the quarter ended September 2023. These figures are as of August 6, 2025, and are subject to revision by the issuing organizations. The IP index did not significantly change from the second quarter of fiscal 2025. Manufacturing PMI results remained below 50 for each of the months in the third quarter of fiscal 2025.

			Manufacturing IP Index						PMI
Fiscal 2025 quarter ended:
June 2025			100.2						49.0
March 2025			100.3						49.0
December 2024			98.9						49.2
Fiscal 2024 quarter ended:
September 2024			99.0						47.5
June 2024			99.4						48.5
March 2024			99.5						50.3
December 2023			99.2						47.1
Fiscal 2023 quarter ended:
September 2023			99.6						49.0

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 has remained in the low single digits during the third quarter, which is consistent with the prior six quarters. Producer prices continue to remain elevated, however, year over year increases remain decelerated from the surges in 2023 and 2022.

Non-U.S. Economic Trends

In the third quarter of 2025, 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 production outside the U.S. was mostly positive in the third quarter of fiscal 2025. Manufacturing PMI readings outside the U.S were mixed with readings in Asia Pacific generally better than readings in Europe, Canada, Mexico, and Brazil.

Outlook

We expect over $250 million of year-over-year benefits from cost reduction and margin expansion actions in 2025 including continuing benefits from restructuring actions we initiated last year and benefits from reduced costs of direct and indirect purchases, increased manufacturing efficiency, and price actions.

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 the current year.

Summary of Results of Operations

The following table reflects our sales and operating results (in millions, except per share amounts and percentages):

			Three Months Ended June 30,												Nine Months Ended June 30,
			2025						2024						2025						2024
Sales
Intelligent Devices (a)			$	968					$	957					$	2,670					$	2,858
Software & Control (b)			629						513						1,726						1,686
Lifecycle Services (c)			547						581						1,630						1,685
Total sales (d)			$	2,144					$	2,051					$	6,026					$	6,229
Segment operating earnings (1)
Intelligent Devices (e)			$	182					$	193					$	461					$	504
Software & Control (f)			199						121						503						418
Lifecycle Services (g)			73						112						219						264
Total segment operating earnings (2) (h)			454						426						1,183						1,186
Purchase accounting depreciation and amortization			(35)						(35)						(106)						(108)
Corporate and other			(40)						(29)						(111)						(97)
Non-operating pension and postretirement benefit credit			—						4						—						14
Change in fair value of investments			—						(5)						(3)						1
Restructuring charges			—						(70)						—						(70)
Interest expense, net			(37)						(36)						(109)						(101)
Income before income taxes (i)			342						255						854						825
Income tax provision			(49)						(24)						(135)						(116)
Net income			293						231						719						709
Net loss attributable to noncontrolling interests			(2)						(1)						(12)						(4)
Net income attributable to Rockwell Automation			$	295					$	232					$	731					$	713
Diluted EPS			$	2.60					$	2.02					$	6.43					$	6.19
Adjusted EPS (3)			$	2.82					$	2.71					$	7.11					$	7.25
Diluted weighted average outstanding shares			113.0						114.2						113.2						114.7
Pre-tax margin (i/d)			16.0		%				12.4		%				14.2		%				13.2		%
Intelligent Devices segment operating margin (e/a)			18.8		%				20.2		%				17.3		%				17.6		%
Software & Control segment operating margin (f/b)			31.6		%				23.6		%				29.1		%				24.8		%
Lifecycle Services segment operating margin (g/c)			13.3		%				19.3		%				13.4		%				15.7		%
Total segment operating margin (2) (h/d)			21.2		%				20.8		%				19.6		%				19.0		%

(1) See Note 16 in the Consolidated Financial Statements for the definition of segment operating earnings.

(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, 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.

(3) 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.

Three and Nine Months Ended June 30, 2025, Compared to Three and Nine Months Ended June 30, 2024

Sales

Sales increased 5 percent and decreased 3 percent year over year in the three and nine months ended June 30, 2025, respectively. Organic sales increased 4 percent and decreased 2 percent year over year in the three and nine months ended June 30, 2025, respectively. Currency translation increased sales by less than one 1 percent and decreased sales by 1 percent in the three and nine months ended June 30, 2025, respectively. Pricing increased total company sales by approximately 3 percentage points and 2 percentage points year over year in the three and nine months ended June 30, 2025, respectively, realized primarily in the Intelligent Devices and Software & Control segments. Volume increased total company sales by approximately 1 percentage point year over year in the three months ended June 30, 2025, driven by the Software & Control segment. Volume decreased total company sales by approximately 5 percentage points year over year in the nine months ended June 30, 2025, driven by the Intelligent Devices segment.

The tables 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):

									Change vs.						Change in Organic Sales (1) vs.
			Three Months Ended June 30, 2025						Three Months Ended June 30, 2024						Three Months Ended June 30, 2024
North America			$	1,354					7		%				7		%
Europe, Middle East, and Africa			392						10		%				5		%
Asia Pacific			266						2		%				2		%
Latin America			132						(21)		%				(14)		%
Total Company Sales			$	2,144					5		%				4		%

									Change vs.						Change in Organic Sales (1) vs.
			Nine Months Ended June 30, 2025						Nine Months Ended June 30, 2024						Nine Months Ended June 30, 2024
North America			$	3,792					—		%				—		%
Europe, Middle East, and Africa			1,082						(5)		%				(6)		%
Asia Pacific			744						(8)		%				(7)		%
Latin America			408						(13)		%				(4)		%
Total Company Sales			$	6,026					(3)		%				(2)		%

(1) Organic sales and organic sales growth exclude the effect of acquisitions, changes in currency exchange rates, and divestitures. See Supplemental Sales Information for information on these non-GAAP measures.

Corporate and Other

Corporate and other expenses were $40 million and $111 million in the three and nine months ended June 30, 2025, respectively, compared to $29 million and $97 million in the three and nine months ended June 30, 2024, respectively.

Restructuring Charges

Restructuring charges were $70 million in the three and nine months ended June 30, 2024, which relate to actions in conjunction with an enterprise-wide comprehensive program to optimize cost structure and expand margins. See Note 14 in the Consolidated Financial Statements for more information on our restructuring charges.

Income before Income Taxes

Income before income taxes was $342 million and $854 million in the three and nine months ended June 30, 2025, respectively, compared to $255 million and $825 million in the three and nine months ended June 30, 2024, respectively. The increase in the three and nine months ended June 30, 2025, was primarily due to restructuring charges taken in the prior year.

Total segment operating earnings increased 7 percent year over year in the three months ended June 30, 2025, primarily due to productivity, the positive impact of price realization, and favorable mix, partially offset by higher compensation and unfavorable currency. Total segment operating earnings decreased less than 1 percent year over year in the nine months ended June 30, 2025.

Income Taxes

The effective tax rates for the three and nine months ended June 30, 2025, were 14.3 percent and 15.8 percent, respectively, compared to 9.4 percent and 14.1 percent for the three and nine months ended June 30, 2024, respectively. Our Adjusted Effective Tax Rates for the three and nine months ended June 30, 2025, were 15.2 percent and 16.6 percent, respectively, compared to 13.3 percent and 15.1 percent for the three and nine months ended June 30, 2024, respectively. The increase in both the effective tax rate and the Adjusted Effective Tax Rate was primarily due to lower discrete benefits in the current year.

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%. 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. Enactment of this regulation in its current form would generally apply to the Company beginning in fiscal year 2026, which could result in an increase in our effective tax rate of 2 to 3 percent as well as in the amount of global corporate income tax paid.

In addition to BEPS Pillar Two, other items could also affect our effective tax rate, many of which are outside of our control,

including:

• changes in the valuation of our deferred tax assets and liabilities, and in deferred tax valuation allowances;

• changes in the relative proportions of revenue and income before taxes in the various jurisdictions in which we operate

• that have differing statutory tax rates;

• changing tax laws, regulations, rates and interpretations in multiple jurisdictions in which we operate;

• changes to the financial accounting rules for income taxes;

• the tax effects of acquisitions; and

• the resolution and timing of issues arising from tax audits.

On July 4, 2025, the OBBBA was enacted in the U.S. The OBBBA includes significant tax related provisions, such as the permanent extension of certain expiring provisions of the Tax Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. We are currently assessing its impact on our consolidated financial statements and the applicable results of our evaluations will be reflected on the Company’s Form 10-K for the year ended September 30, 2025.

Diluted EPS and Adjusted EPS

2025 third quarter Net income attributable to Rockwell Automation was $295 million or $2.60 per share, compared to $232 million or $2.02 per share in the third quarter of 2024. 2025 third quarter Adjusted EPS was $2.82, up 4 percent compared to $2.71 in the third quarter of 2024.

Net income attributable to Rockwell Automation was $731 million or $6.43 per share in the nine months ended June 30, 2025, compared to $713 million or $6.19 per share in the nine months ended June 30, 2024. Adjusted EPS was $7.11 in the nine months ended June 30, 2025, down 2 percent compared to $7.25 in the nine months ended June 30, 2024.

Intelligent Devices

Sales

Intelligent Devices reported and organic sales increased 1 percent year over year in the three months ended June 30, 2025. Sales decreased 7 percent year over year in the nine months ended June 30, 2025. Organic sales decreased 6 percent year over year in the nine months ended June 30, 2025. The effects of currency translation decreased sales by 1 percentage point year over year in the nine months ended June 30, 2025. For the three months ended June 30, 2025, reported sales increased in Europe, Middle East and Africa and Asia Pacific, were flat in North America, and decreased in Latin America. For the three months ended June 30, 2025, organic sales increased in North America and Europe, Middle East and Africa, were flat in Asia Pacific, and decreased in Latin America. For the nine months ended June 30, 2025, reported sales decreased in all regions. For the nine months ended June 30, 2025, organic sales decreased in all regions except Latin America.

Segment Operating Margin

Intelligent Devices segment operating earnings decreased 6 percent year over year in the three months ended June 30, 2025. Segment operating margin decreased to 18.8 percent in the three months ended June 30, 2025, from 20.2 percent in the same period a year ago, primarily due to higher compensation and unfavorable net currency, partially offset by productivity and the positive impact of price realization.

Intelligent Devices segment operating earnings decreased 9 percent year over year in the nine months ended June 30, 2025. Segment operating margin decreased to 17.3 percent in the nine months ended June 30, 2025, from 17.6 percent in the same period a year ago.

Software & Control

Sales

Software & Control sales increased 23 percent and 2 percent year over year in the three and nine months ended June 30, 2025, respectively. Organic sales increased 22 percent and 3 percent year over year in the three and nine months ended June 30, 2025, respectively. The effects of currency translation increased sales by 1 percentage point year over year in the three months ended June 30, 2025. The effects of currency translation decreased sales by 1 percentage point year over year in the nine months ended June 30, 2025. For the three months ended June 30, 2025, reported and organic sales increased in all regions except Latin America. For the nine months ended June 30, 2025, reported and organic sales decreased in all regions except for North America.

Segment Operating Margin

Software & Control segment operating earnings increased 64 percent year over year in the three months ended June 30, 2025. Segment operating margin increased to 31.6 percent in the three months ended June 30, 2025, from 23.6 percent in the same period a year ago, primarily due to higher sales volume, the positive impact of price realization, and productivity, partially offset by higher compensation.

Software & Control segment operating earnings increased 20 percent year over year in the nine months ended June 30, 2025. Segment operating margin increased to 29.1 percent in the nine months ended June 30, 2025, from 24.8 percent in the same period a year ago, primarily due to productivity and the positive impact of price realization, partially offset by higher compensation.

Lifecycle Services

Sales

Lifecycle Services reported and organic sales decreased 6 percent and 3 percent year over year in the three and nine months ended June 30, 2025, respectively. For the three months ended June 30, 2025, reported sales decreased in all regions except Europe, Middle East, and Africa. For the three months ended June 30, 2025, organic sales decreased in all regions. For the nine months ended June 30, 2025, reported sales decreased in all regions. For the nine months ended June 30, 2025, organic sales decreased in all regions except North America.

Segment Operating Margin

Lifecycle Services segment operating earnings decreased 35 percent and 17 percent year over year in the three and nine months ended June 30, 2025, respectively. Segment operating margin decreased to 13.3 percent and 13.4 percent in the three and nine months ended June 30, 2025, respectively, from 19.3 percent and 15.7 percent, respectively, in the same period a year ago, primarily due to higher compensation and lower sales volume, partially offset by productivity.

Supplemental Segment Information

Purchase accounting depreciation and amortization, non-operating pension and postretirement benefit credit, and restructuring charges 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):

			Three Months Ended June 30,												Nine Months Ended June 30,
			2025						2024						2025						2024
Purchase accounting depreciation and amortization
Intelligent Devices			$	9					$	9					$	28					$	29
Software & Control			16						17						49						51
Lifecycle Services			9						9						28						28
Non-operating pension and postretirement benefit credit
Intelligent Devices			$	—					$	(2)					$	—					$	(6)
Software & Control			—						(1)						—						(5)
Lifecycle Services			—						(2)						(1)						(7)
Restructuring charges
Intelligent Devices			$	—					$	32					$	—					$	32
Software & Control			—						24						—						24
Lifecycle Services			—						13						—						13

Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate Reconciliation

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, change in fair value of investments, and restructuring charges aligned with enterprise-wide strategic initiatives, including their respective tax effects. Non-operating pension and postretirement benefit credit is defined as all components of our net periodic pension and postretirement benefit cost except for service cost. See Note 10 in the Consolidated Financial Statements for more information on our net periodic pension and postretirement benefit cost.

We believe that Adjusted Income, Adjusted EPS, and Adjusted Effective Tax rate provide useful information to our investors about our operating performance and allow management and investors to compare our operating performance period over period. Adjusted EPS is also used as a financial measure of performance for our annual incentive compensation. Our measures of Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate may be different from measures used by other companies. These non-GAAP measures should not be considered a substitute for Net Income attributable to Rockwell Automation, diluted EPS, and effective tax rate.

The following are reconciliations of Net income attributable to Rockwell Automation, diluted EPS, and effective tax rate to Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate, respectively (in millions, except per share amounts and percentages):

			Three Months Ended June 30,												Nine Months Ended June 30,
			2025						2024						2025						2024
Net income attributable to Rockwell Automation			$	295					$	232					$	731					$	713
Non-operating pension and postretirement benefit credit			—						(4)						—						(14)
Tax effect of non-operating pension and postretirement benefit credit			(1)						1						(1)						3
Purchase accounting depreciation and amortization attributable to Rockwell Automation			33						33						98						100
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation			(7)						(6)						(22)						(17)
Change in fair value of investments			—						5						3						(1)
Tax effect of change in fair value of investments			—						(2)						(1)						(1)
Restructuring charges (1)			—						70						—						70
Tax effect of restructuring charges (1)			—						(18)						—						(18)
Adjusted Income			$	320					$	311					$	808					$	835
Diluted EPS			$	2.60					$	2.02					$	6.43					$	6.19
Non-operating pension and postretirement benefit credit			—						(0.04)						—						(0.13)
Tax effect of non-operating pension and postretirement benefit credit			(0.01)						0.01						(0.01)						0.02
Purchase accounting depreciation and amortization attributable to Rockwell Automation			0.29						0.28						0.86						0.87
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation			(0.06)						(0.05)						(0.19)						(0.15)
Change in fair value of investments			—						0.04						0.03						(0.01)
Tax effect of change in fair value of investments			—						(0.01)						(0.01)						—
Restructuring charges (1)			—						0.61						—						0.61
Tax effect of restructuring charges (1)			—						(0.15)						—						(0.15)
Adjusted EPS			$	2.82					$	2.71					$	7.11					$	7.25
Effective tax rate			14.3		%				9.4		%				15.8		%				14.1		%
Tax effect of non-operating pension and postretirement benefit credit			0.3		%				(0.2)		%				0.1		%				(0.1)		%
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation			0.6		%				0.4		%				0.6		%				0.2		%
Tax effect of change in fair value of investments			—		%				0.3		%				0.1		%				—		%
Tax effect of restructuring charges (1)			—		%				3.4		%				—		%				0.9		%
Adjusted Effective Tax Rate			15.2		%				13.3		%				16.6		%				15.1		%

(1) Restructuring charges in the three and nine months ended June 30, 2024, include $65 million for severance benefits and $5 million for strategic advisory services related to the enterprise-wide severance actions.

Financial Condition

The following is a summary of our cash flows from operating, investing, and financing activities, as reflected in the Consolidated Statement of Cash Flows (in millions):

			Nine Months Ended June 30,
			2025						2024
Cash provided by (used for)
Operating activities			$	1,090					$	432
Investing activities			(165)						(920)
Financing activities			(904)						(187)
Effect of exchange rate changes on cash			3						2
Increase (decrease) in cash and cash equivalents			$	24					$	(673)

The following table summarizes free cash flow, which is a non-GAAP financial measure (in millions):

			Nine Months Ended June 30,
			2025						2024
Cash provided by operating activities			$	1,090					$	432
Capital expenditures			(137)						(160)
Free cash flow			$	953					$	272

Our definition of free cash flow takes into consideration capital investments required to maintain the operations of our businesses and execute our strategy. Cash provided by operating activities adds back non-cash depreciation expense to earnings but does not reflect a charge for necessary capital expenditures. Our definition of free cash flow excludes the operating cash flows and capital expenditures related to our discontinued operations, if any. Operating, investing, and financing cash flows of our discontinued operations, if any, are presented separately in our Consolidated Statement of Cash Flows. In our opinion, free cash flow provides useful information to investors regarding our ability to generate cash from business operations that is available for acquisitions and other investments, service of debt principal, dividends, and share repurchases. We use free cash flow, as defined, as one measure to monitor and evaluate our performance, including as a financial measure for our annual incentive compensation. Our definition of free cash flow may be different from definitions used by other companies.

Cash provided by operating activities was $1,090 million for the nine months ended June 30, 2025, compared to $432 million for the nine months ended June 30, 2024. Free cash flow was $953 million for the nine months ended June 30, 2025, compared to $272 million for the nine months ended June 30, 2024. The year over year increases in cash provided by operating activities and free cash flow were primarily due to higher pre-tax income, no payout of incentive compensation in the first quarter of fiscal 2025 related to fiscal 2024 performance, and lower tax payments.

Our Short-term debt as of June 30, 2025, included commercial paper borrowings of $260 million, with a weighted average interest rate of 4.51 percent, and a weighted average maturity period of 11 days. Our Short-term debt as of September 30, 2024, included commercial paper borrowings of $657 million, with a weighted average interest rate of 5.14 percent, and a weighted average maturity period of 24 days. In December 2022, Sensia entered into an unsecured $75 million line of credit. As of June 30, 2025, and September 30, 2024, included in Short-term debt was $70 million borrowed against the line of credit with an interest rate of 5.32 percent and 6.17 percent, respectively. Also included in Short-term debt as of June 30, 2025, and September 30, 2024, was $14 million and $42 million, respectively, of interest-bearing loans from Schlumberger (SLB) to Sensia. In April 2025, $14 million of new interest-bearing loans from SLB to Sensia were entered into and are due October 15, 2025. The loans outstanding as of September 30, 2024, were extended to October 15, 2026, and are included in Long-term debt as of June 30, 2025.

In May 2025, we entered into a $500 million senior unsecured 364-day term loan credit agreement and were advanced the full loan amount. This agreement is in addition to our existing $1.5 billion unsecured revolving credit facility expiring in June 2027, which remains outstanding and undrawn. Borrowings under this term loan bear interest based on Secured Overnight Financing Rates (SOFR) in effect during the period the borrowings are outstanding, and the interest rate as of June 30, 2025, was 5.45 percent. The term loan agreement contains covenants similar to those under our $1.5 billion unsecured revolving credit facility, under which we agree to maintain an EBITDA-to-interest ratio of at least 3.0 to 1.0. The EBITDA-to-interest ratio is defined in the term loan agreement as the ratio of consolidated EBITDA (as defined in the term loan agreement) for the preceding four quarters to consolidated interest expense for the same period. We were in compliance with all covenants under our credit agreement and credit facilities at June 30, 2025, and September 30, 2024.

We repurchased approximately 1.3 million shares of our common stock under our share repurchase program in the first nine months of 2025. The total cost of these shares was $350 million, of which $1 million was recorded in Accounts payable at June 30, 2025, related to shares that did not settle until July 2025. At September 30, 2024, there were no significant outstanding common stock share repurchases recorded in Accounts payable. We repurchased approximately 1.7 million shares of our common stock under our share repurchase program in the first nine months of 2024. The total cost of these shares was $476 million, of which $1 million was recorded in Accounts payable at June 30, 2024, related to shares that did not settle until July 2024. Our decision to repurchase shares in the remainder of 2025 will depend on business conditions, free cash flow generation, other cash requirements, and stock price. On May 2, 2022, and September 11, 2024, the Board of Directors authorized us to expend an additional $1.0 billion to repurchase shares of our common stock. At June 30, 2025, we had approximately $996 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.

We expect future uses of cash to include working capital requirements, capital expenditures, 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.

At June 30, 2025, the majority of our Cash and cash equivalents were held by non-U.S. subsidiaries. We use a global cash pooling arrangement to efficiently manage liquidity among our entities. As a result of the broad changes to the U.S. international tax system under the Tax Act, the Company accounts for taxes on earnings of substantially all of its non-U.S. subsidiaries including both non-U.S. and U.S. taxes. The Company has concluded that earnings of a limited number of its non-U.S. subsidiaries are indefinitely reinvested.

In June 2022, we replaced our former $1.25 billion unsecured revolving credit facility with a new five-year $1.5 billion unsecured revolving credit facility, expiring in June 2027. This credit facility uses the secured overnight funding rate (SOFR) as the primary basis for determining interest payments. We can increase the aggregate amount of this credit facility by up to $750 million, subject to the consent of the banks in the credit facility. We did not borrow against this credit facility during the periods ended June 30, 2025, or September 30, 2024. Borrowings under this credit facility bear interest based on short-term money market rates in effect during the period the borrowings are outstanding. The terms of this credit facility contain covenants under which we agree to maintain an EBITDA-to-interest ratio of at least 3.0 to 1.0. The EBITDA-to-interest ratio is defined in the credit facility as the ratio of consolidated EBITDA (as defined in the facility) for the preceding four quarters to consolidated interest expense for the same period.

Among other uses, we can draw on our credit facility as a standby liquidity facility to repay our outstanding commercial paper as it matures. This access to funds to repay maturing commercial paper is an important factor in maintaining the short-term credit ratings set forth in the table below. Under our current policy with respect to these ratings, we expect to limit our other borrowings under our credit facility, if any, to amounts that would leave enough credit available under the facility so that we could borrow, if needed, to repay all of our then outstanding commercial paper as it matures.

Separate short-term unsecured credit facilities of approximately $275 million at June 30, 2025, were available to non-U.S. subsidiaries, of which, approximately $34 million was committed under letters of credit. Borrowings under our non-U.S. credit facilities at June 30, 2025, and September 30, 2024, were not significant. There are no significant commitment fees or compensating balance requirements under our credit facilities.

The following is a summary of our credit ratings as of August 6, 2025:

Credit Rating Agency						Short-Term Rating						Long-Term Rating						Outlook
Standard & Poor’s						A-2						A-						Stable
Moody’s						P-2						A3						Stable
Fitch Ratings						F1						A						Stable

Our ability to access the commercial paper market, and the related costs of these borrowings, is affected by the strength of our credit ratings and market conditions. We have not experienced any difficulty in accessing the commercial paper market. If our access to the commercial paper market is adversely affected due to a change in market conditions or otherwise, we would expect to rely on a combination of available cash and our unsecured committed credit facility to provide short-term funding. In such event, the cost of borrowings under our unsecured committed credit facility could be higher than the cost of commercial paper borrowings.

We regularly monitor the third-party depository institutions that hold our cash and cash equivalents and short-term investments. We diversify our cash and cash equivalents and short-term investments among counterparties to minimize exposure to any one of these entities.

We use foreign currency forward exchange contracts to manage certain foreign currency risks. We enter into these contracts to hedge our exposure to foreign currency exchange rate variability in the expected future cash flows associated with certain third-party and intercompany transactions denominated in foreign currencies forecasted to occur within the next two years. We also may use these contracts to hedge portions of our net investments in certain non-U.S. subsidiaries against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. There were no open net investment hedges for the nine months ended June 30, 2025, or September 30, 2024. In addition, we use foreign currency forward exchange contracts that are not designated as hedges to offset transaction gains or losses associated with some of our assets and liabilities resulting from intercompany loans or other transactions with third parties that are denominated in currencies other than our entities' functional currencies. Our foreign currency forward exchange contracts are usually denominated in currencies of major industrial countries. We diversify our foreign currency forward exchange contracts among counterparties to minimize exposure to any one of these entities.

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 June 30, 2025, we reclassified $1 million in pre-tax net losses related to cash flow hedges reclassified from Accumulated other comprehensive loss into the Consolidated Statement of Operations. During the nine months ended June 30, 2025, we reclassified $6 million in pre-tax net gains related to cash flow hedges reclassified from Accumulated other comprehensive loss into the Consolidated Statement of Operations. During the three and nine months ended June 30, 2024, we reclassified $5 million and $18 million, respectively, in pre-tax net gains related to cash flow hedges from Accumulated other comprehensive loss into the Consolidated Statement of Operations. As of June 30, 2025, we expect that approximately $18 million of pre-tax net unrealized losses on cash flow hedges will be reclassified into earnings during the next 12 months.

Information with respect to our contractual cash obligations is contained in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended September 30, 2024. We believe that at June 30, 2025, there has been no material change to this information.

Supplemental Sales Information

We translate sales of subsidiaries operating outside of the United States using exchange rates effective during the respective period. Therefore, changes in currency exchange rates affect our reported sales. Sales by acquired businesses also affect our reported sales. We believe that organic sales, defined as sales excluding the effects of acquisitions and changes in currency exchange rates, which is a non-GAAP financial measure, provides useful information to investors because it reflects regional and operating segment performance from the activities of our businesses without the effect of acquisitions and changes in currency exchange rates. We use organic sales as one measure to monitor and evaluate our regional and operating segment performance. When we acquire businesses, we exclude sales in the current period for which there are no comparable sales in the prior period. We determine the effect of changes in currency exchange rates by translating the respective period’s sales using the same currency exchange rates that were in effect during the prior year. When we divest a business, we exclude sales in the prior period for which there are no comparable sales in the current period. Organic sales growth is calculated by comparing organic sales to reported sales in the prior year, excluding divestitures. We attribute sales to the geographic regions based on the country of destination.

The following is a reconciliation of reported sales to organic sales by geographic region (in millions):

			Three Months Ended June 30, 2025																								Three Months Ended June 30, 2024
			Reported Sales						Less: Effect of Acquisitions						Effect of Changes in Currency												Organic Sales						Reported Sales
North America			$	1,354					$	—					$	(1)											$	1,355					$	1,268
Europe, Middle East, and Africa			392						—						17												375						356
Asia Pacific			266						—						1												265						260
Latin America			132						—						(12)												144						167
Total Company Sales			$	2,144					$	—					$	5											$	2,139					$	2,051

			Nine Months Ended June 30, 2025																								Nine Months Ended June 30, 2024
			Reported Sales						Less: Effect of Acquisitions						Effect of Changes in Currency												Organic Sales						Reported Sales
North America			$	3,792					$	2					$	(11)											$	3,801					$	3,809
Europe, Middle East, and Africa			1,082						—						7												1,075						1,143
Asia Pacific			744						—						(6)												750						806
Latin America			408						—						(42)												450						471
Total Company Sales			$	6,026					$	2					$	(52)											$	6,076					$	6,229

The following is a reconciliation of reported sales to organic sales by operating segment (in millions):

			Three Months Ended June 30, 2025																								Three Months Ended June 30, 2024
			Reported Sales						Less: Effect of Acquisitions						Effect of Changes in Currency												Organic Sales						Reported Sales
Intelligent Devices			$	968					$	—					$	1											$	967					$	957
Software & Control			629						—						2												627						513
Lifecycle Services			547						—						2												545						581
Total Company Sales			$	2,144					$	—					$	5											$	2,139					$	2,051

			Nine Months Ended June 30, 2025																								Nine Months Ended June 30, 2024
			Reported Sales						Less: Effect of Acquisitions						Effect of Changes in Currency												Organic Sales						Reported Sales
Intelligent Devices			$	2,670					$	—					$	(27)											$	2,697					$	2,858
Software & Control			1,726						—						(14)												1,740						1,686
Lifecycle Services			1,630						2						(11)												1,639						1,685
Total Company Sales			$	6,026					$	2					$	(52)											$	6,076					$	6,229

Critical Accounting Estimates

We have prepared the Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States, which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Consolidated Financial Statements and revenues and expenses during the periods reported. These estimates are based on our best judgment about current and future conditions, but actual results could differ from those estimates. Information with respect to accounting estimates that are the most critical to the understanding of our financial statements as they could have the most significant effect on our reported results and require subjective or complex judgments by management is contained in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended September 30, 2024. We believe that at June 30, 2025, there has been no material change to this information.

Environmental Matters

Information with respect to the effect of compliance with environmental protection requirements and resolution of environmental claims on us and our manufacturing operations is contained in Note 17 in the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for the year ended September 30, 2024. We believe that at June 30, 2025, there has been no material change to this information.

Recent Accounting Pronouncements

See Note 1 in the Consolidated Financial Statements regarding recent accounting pronouncements.