Rockwell Automation (ROK) Q4 2024 earnings summary

Executive summary

• Q4 sales declined 21% year-over-year, with organic sales also down 21%; orders fell sequentially but rose about 25% year-over-year.

• Full-year reported sales declined 9% to $8,264M, with organic sales down 10%.

• Adjusted EPS for Q4 was $2.47, down 32% year-over-year; full-year adjusted EPS was $9.71, down 20%.

• Annual recurring revenue (ARR) grew 16% year-over-year and now represents over 10% of total revenue.

• Cost reduction actions achieved $110 million in H2 2024, with global headcount down over 12% since Q2.

Financial highlights

• Q4 sales were $2,036M, down 21% year-over-year; organic sales down 21%; segment margin 20.1%, down 220 bps.

• Full-year sales were $8,264M, down 9%; segment margin 19.3%, down 200 bps; free cash flow $639M.

• Adjusted effective tax rate for Q4 was 14.9%, below prior year and expectations; FY24 rate was 15.1%.

• Return on invested capital for 2024 was 15.2%, down from 20.9% in 2023.

• Free cash flow conversion was 57–60% for the year, down from 86% in 2023.

Outlook and guidance

• Fiscal 2025 reported and organic sales growth expected between (4)% and 2%.

• ARR projected to grow about 10% in 2025.

• Adjusted EPS guidance for 2025 is $8.60–$9.80, midpoint $9.20.

• Free cash flow conversion expected to return to 100% in 2025.

• Q1 2025 sales expected to be down sequentially from Q4, with gradual improvement through the year.