Rockwell Automation (NYSE:ROK) 2025 Investor Day November 19, 2025 11:00 AM ET Company ParticipantsChristian Rothe - SVP and CFOMatt Fordenwalt - SVP of Lifecycle ServicesBlake Moret - Chairman and CEOTessa Myers - SVP of Intelligent DevicesNone - Company RepresentativeMateus Bulho - SVP of Software and ControlRobert Buttermore - Chief Supply Chain OfficerBob Buttermore - SVP and Chief Supply Chain OfficerAijana Zellner - VP of Investor RelationsGiuseppe Del Duca - CEO of Ferrero Technical Services and Head ...

Core Insights - Rockwell Automation has announced a significant advancement in industrial intelligence by integrating NVIDIA's Nemotron Nano, a small language model optimized for industrial applications, into its FactoryTalk Design Studio, enhancing real-time intelligence for industrial teams [1][2]. Group 1: Product Development - The collaboration with NVIDIA utilizes the open-source Nemotron-Nano-9B-v2 model and NVIDIA NeMo to create an edge-based generative AI solution tailored for industrial environments, which operates efficiently in terms of space and power compared to traditional data centers [2][4]. - The model is designed for various workflows including design, development, production, and maintenance, and can function on HMI panels, appliances, desktop IDEs, and private cloud environments, supporting both edge and air-gapped deployments [3][4]. Group 2: Performance and Benefits - Early evaluations indicate that the model offers significant improvements in reasoning, parallel processing, and overall performance, making it particularly suitable for industrial edge scenarios where instant responsiveness and data security are critical [4]. - The integration of the NVIDIA Nemotron model with FactoryTalk Design Studio data aims to enhance workflow acceleration without sacrificing predictability or control, addressing the specific needs of industrial automation [4]. Group 3: Market Impact and Future Plans - The innovation will be showcased at Automation Fair 2025 in Chicago, highlighting how edge-based generative AI is transforming industrial operations [4]. - Rockwell Automation, as a leader in industrial automation and digital transformation, continues to focus on connecting technology with human potential to improve productivity and sustainability across various industries [5].

Core Insights - Rockwell Automation is introducing a generative AI solution, integrating NVIDIA's Nemotron Nano, aimed at enhancing real-time intelligence for industrial teams [1][2][4] - The new AI model is optimized for FactoryTalk® Design Studio and is designed to operate efficiently in edge environments, requiring less space and power compared to traditional data centers [2][3] Group 1: Product Features - The generative AI capability is built for various workflows including design, development, production, and maintenance, and can function on HMI panels, desktop IDEs, and private cloud environments [3] - Early evaluations indicate significant advancements in reasoning, parallel processing, and performance, making it suitable for industrial edge scenarios where data security and offline operation are critical [4] Group 2: Industry Impact - The integration of small language models like NVIDIA Nemotron Nano is expected to bring real-time intelligence directly to operational decision-making environments, such as factory floors and power grids [4] - Rockwell Automation plans to showcase this innovation at Automation Fair 2025, highlighting how edge-based generative AI is transforming industrial operations [4]

Core Insights - Rockwell Automation has introduced the ControlLogix 5590, a next-generation controller aimed at enhancing operational efficiency in modern manufacturing [1][3] - The new controller addresses challenges faced by manufacturers, such as global competition, labor shortages, and disconnected control systems [2][3] Product Features - The ControlLogix 5590 is designed as a high-performance core for the Logix platform, offering integrated software and multidisciplinary control [1][4] - It includes advanced safety features, high-speed processing, built-in cybersecurity aligned with IEC 62443 standards, and a unified software suite for efficient engineering [5][4] Financial Performance - In August, Rockwell reported Q3 earnings of $2.82 per share, a 4.1% increase year-over-year, exceeding the consensus estimate of $2.66 [6] - Revenue for the quarter rose 4.5% year-over-year to $2.14 billion, surpassing the expected $2.07 billion [6] - The company raised its fiscal 2025 adjusted EPS guidance to $9.80-$10.20 and lifted its full-year sales outlook to $8.2 billion, up from $8.1 billion [7] Market Reaction - Rockwell Automation shares have increased nearly 22% year-to-date, reflecting positive market sentiment [7]

Core Insights - Roper Technologies, Inc. (ROP) is experiencing strong momentum in its Application Software segment, driven by solid demand across various markets, leading to a 6% year-over-year increase in organic revenues in Q2 2025 [1][8]. Group 1: Application Software Segment Performance - The Deltek, Vertafore, PowerPlan, and Aderant businesses are key contributors to the segment's growth, with SaaS solutions and GenAI innovation acting as significant catalysts [2][3]. - Aderant's growth is fueled by the increasing adoption of SaaS solutions, while Deltek benefits from strong demand in both GovCon and private sectors [2]. - The Vertafore business is seeing strong annual recurring revenue (ARR) growth due to excellent enterprise delivery capabilities [2]. - Roper anticipates mid-single-digit organic revenue growth for the Application Software segment in the second half of 2025 [3]. Group 2: Revenue Outlook - Roper has raised its total revenue outlook for 2025, now expecting approximately 13% growth compared to the previous estimate of 12% [4]. - Organic revenues are projected to rise by 6-7% year-over-year [4]. Group 3: Peer Performance Comparison - Rockwell Automation, Inc. (ROK) is expanding its portfolio and is expected to achieve above-market organic sales growth [5]. - Honeywell International Inc. (HON) is facing challenges in its Industrial Automation segment, with a 5% year-over-year sales decline in Q2 2025 [6]. Group 4: Valuation and Earnings Estimates - Roper's shares have decreased by 6.3% over the past year, outperforming the industry's decline of 12% [7]. - The company is trading at a forward price-to-earnings ratio of 24.37X, lower than the industry average of 26.17X [10]. - The Zacks Consensus Estimate for Roper's earnings for 2025 and 2026 has been on the rise, indicating positive revisions over the past 60 days [12].

Core Insights - ABB Ltd and Rockwell Automation, Inc. are key players in the industrial automation and electrification sectors, with ABB focusing on power and automation technologies while Rockwell is known for its industrial automation and information technologies [1][2] ABB Analysis - ABB's Process Automation segment is currently the strongest driver of its business, benefiting from robust project activity in marine, ports, and energy industries [3] - In Q2 2025, orders in the Process Automation segment increased by 45%, with revenues rising by 5% year over year, and a significant order worth $600 million was booked [4] - The Electrification segment is also performing well, with orders and revenues increasing by 11% and 14% respectively in Q2 [5] - The Motion segment saw orders and revenues rise by 5% and 6% year over year, supported by strong performance in commercial building HVAC and power generation markets [6] - However, the Robotics & Discrete Automation segment is facing challenges due to weak demand in chemicals, pulp & paper, and mining industries [7] - ABB's long-term debt increased to $8.26 billion from $6.65 billion at the end of 2024, with short-term debt surging by 90% [8] Rockwell Automation Analysis - Rockwell is expanding its portfolio of hardware and software products, benefiting from investments in cloud technologies [9] - The company's FactoryTalk Design Studio, which includes a copilot for automation system design, is an industry first and is expected to drive growth [9] - Rockwell's annual recurring revenues (ARR) grew in double digits in fiscal 2024 and are projected to grow by 10% in fiscal 2025 [13] - The company maintains a strong financial position, having repurchased 0.5 million shares for $129 million in Q2 2025 [14] - Rockwell's stock has appreciated by 28.9% over the past year, outperforming ABB's 18.7% increase [17] Financial Performance and Valuation - ABB's forward P/E ratio is 25.27X, while Rockwell's is higher at 31.49X, indicating that ABB may be more attractively valued [10][20] - The Zacks Consensus Estimate for ABB's 2025 sales and EPS implies growth of 6.1% and 14.1% respectively, although EPS estimates have decreased recently [18] - In contrast, Rockwell's fiscal 2025 sales estimates indicate a decline of 1.8%, but EPS estimates show a 1% increase, with positive trends for both fiscal 2025 and 2026 [19] Conclusion - ABB's strengths in Electrification and Process Automation are offset by weaknesses in Robotics and high debt levels [22] - Rockwell's market leadership and investments position it for strong growth, making it a more favorable investment option compared to ABB [23][24]

Core Insights - Rockwell Automation Inc. (ROK) has launched its innovative edge-gateway solution, OptixEdge, aimed at transforming data processing for industrial customers [1] Group 1: Product Launch and Features - OptixEdge utilizes Rockwell Automation's FactoryTalk Optix software to connect to user control systems, enabling data collection, analysis, and cloud transmission [2] - The solution allows for easy application configuration via a web browser, significantly reducing setup time, and supports the creation and deployment of custom applications [3] - OptixEdge integrates with existing Rockwell Automation hardware and third-party systems, reducing cloud data transfer, which lowers storage costs and enhances network performance [4][8] Group 2: Growth Strategy - Rockwell Automation is expanding its portfolio of hardware and software products, benefiting from investments in cloud technology [5] - The company is expected to achieve above-market organic sales growth by broadening its served markets and enhancing its offerings [6] - Significant investments in global manufacturing, product development, and channel capabilities are anticipated to drive growth and improve earnings [6] Group 3: Stock Performance - Over the past year, Rockwell Automation shares have increased by 27%, outperforming the industry, which saw an 8.6% decline [7]

Core Viewpoint - Rockwell Automation Inc. is experiencing positive momentum with improved guidance for fiscal 2025 and strategic initiatives aimed at enhancing productivity and expanding its market presence [2][4][5]. Group 1: Financial Performance and Guidance - The company has increased its adjusted EPS guidance for fiscal 2025 to a range of $9.20-$10.20, up from the previous expectation of $8.60-$9.80, indicating a stabilization in earnings year-over-year [2]. - Rockwell Automation's stock reached a new 52-week high of $314.94, closing at $312.39, with a market capitalization of $35.3 billion [1]. Group 2: Strategic Initiatives - The company is focusing on portfolio expansion by broadening its range of hardware and software products, which includes investments in cloud technology [3]. - Significant investments are being made to globalize manufacturing and product development, which are expected to drive above-market organic sales growth [4]. - Rockwell Automation is implementing restructuring actions to adjust its cost structure, achieving productivity savings of approximately $110 million in the second half of fiscal 2024, with a target of $250 million in year-over-year productivity benefits for fiscal 2025 [5]. Group 3: Technological Advancements - The newly released EtherNet/IP In-cabinet Solution has demonstrated significant efficiency improvements, reducing control panel wiring time by 66% and achieving a 36% smaller panel footprint [7]. Group 4: Market Performance - Over the past year, Rockwell Automation shares have gained 24.6%, contrasting with an 11.8% decline in the industry [8].

Summary of Rockwell Automation Conference Call Company Overview - **Company**: Rockwell Automation - **Event**: Oppenheimer's 20th Annual Industrial Growth Conference Key Industry Insights - **Demand Trends**: - Strong global demand with North America outperforming other regions [3][6] - No significant evidence of demand pull forward due to tariffs; inventory levels stable or slightly down [4][9] - Double-digit sequential growth observed in food and beverage, home and personal care markets [7] - **Regional Performance**: - North America expected to remain the strongest region for the year [6] - Sequential growth noted in Europe, particularly in Italy and Germany [6] - **E-commerce and Warehouse Automation**: - E-commerce and warehouse automation markets are experiencing strong demand, driven by modernization and labor cost issues [20][22] - Growth in data centers attributed to the acquisition of Cubic, contributing positively to the business [26] Financial Performance - **Revenue Guidance**: - Full-year revenue growth guidance increased from high single digits to 45% year-over-year [27] - **Cost Management**: - $125 million in tariff cost impacts anticipated, with mitigation strategies in place [45][46] - Structural productivity improvements expected to yield $250 million in year-over-year savings [59][62] - **Margin Insights**: - Margins expected to improve sequentially, with continued productivity benefits anticipated in Q3 and Q4 [63][70] - Focus on optimizing pricing and SKU rationalization to enhance margins [57][71] Strategic Initiatives - **Supply Chain Resilience**: - Enhanced supply chain flexibility and redundancy established during the supply chain crisis [17][18] - Ongoing monitoring of pre-buy activities to prevent inventory issues [9][10] - **Technological Advancements**: - Emphasis on AI capabilities within automation systems, including partnerships with NVIDIA and Microsoft [74][79] - Introduction of generative AI tools to streamline PLC programming and reduce deployment times by up to 30% [85] - **Portfolio Evolution**: - Transition towards a more software-defined portfolio, integrating AI and cloud capabilities to enhance customer offerings [74][91] Additional Considerations - **Trade Dynamics**: - Trade tensions impacting EMEA and APAC share dynamics, but overall low cancellations observed [34][36] - Uncertainty around tariffs affecting customer CapEx decisions, particularly in automotive and energy sectors [39][42] - **Market Diversification**: - Continued diversification of end markets and technologies to enhance resilience and growth opportunities [72] This summary encapsulates the key points discussed during the conference call, highlighting Rockwell Automation's performance, strategic initiatives, and market dynamics.