01—Abstract
Summary
Summary of the 10-K filed November 12, 2024. Cited figures are marked; the original filing is the authoritative source.
Rockwell Automation, Inc. (ROK) reported a decrease in sales for the fiscal year ended September 30, 2024, with total sales declining by 9%a compared to the previous year.
This downturn was driven by a significant 24%b decrease in the Software & Control segment and a 7% decrease in the Intelligent Devices segment, partially offset by a 10% increase in the Lifecycle Services segment. Despite the sales challenges, the company continued to focus on its long-term strategy of industrial automation and digital transformation, aiming to enhance customer resilience, agility, and sustainability. The company's financial performance was impacted by macroeconomic factors and a shift in customer spending.
While the company executed cost-optimization initiatives, including restructuring charges, the overall profitability decreased. Adjusted EPS fell to $9.71c from $12.12 in the prior year.
However, Rockwell Automation maintained a strong commitment to returning capital to shareholders, with significant share repurchases during the period. The company also highlighted its ongoing investments in technology innovation and its strong talent management practices as key drivers for future growth.
02—Key points
Key Highlights
- Sales for the fiscal year ended September 30, 2024, decreased by 9% to $8.26 billion, compared to $9.06 billion in fiscal year 2023.
- The Software & Control segment experienced a significant sales decline of 24%, while the Intelligent Devices segment saw a 7% decrease in sales.
- Lifecycle Services segment sales increased by 10%, demonstrating resilience in that area.
- Total segment operating margin decreased to 19.3% from 21.3% in the prior year, reflecting lower sales volumes and unfavorable mix.
- Adjusted Earnings Per Share (EPS) declined by 20% to $9.71 from $12.12 in fiscal year 2023.
- The company repurchased approximately $594.2 million of its common stock during fiscal year 2024.
- Annual Recurring Revenue (ARR) showed strong growth, with total ARR increasing by approximately 16%.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Rockwell Automation kept $0.12.
- Revenue$8.26B100.0%
- Cost of revenue−$4.41B53.4%
- Gross profit$3.85B46.6%
- Operating costs−$2.26B27.3%
- Operating income$1.59B19.3%
- Interest, other & tax−$642.0M7.8%
- Net income$953.0M11.5%
04—Financials
Financial Highlights
Figures from 10-KFY2024filed November 12, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $8.26B$9.06B | −8.8% |
| Cost of Revenue | $4.41B$4.63B | −4.8% |
| Gross Profit | $3.85B$4.42B | −12.9% |
| R&D Expenses | $658.00M$706.00M | −6.8% |
| SG&A Expenses | $2.00B$2.02B | −1.1% |
| Operating Income | $1.59B$1.93B | −17.3% |
| Net Income | $953.00M$1.39B | −31.3% |
| EPS (Basic) | $8.32$12.03 | −30.8% |
| EPS (Diluted) | $8.28$11.95 | −30.7% |
| Shares Outstanding (Basic) | 114.00M114.80M | −0.7% |
| Shares Outstanding (Diluted) | 114.50M115.60M | −1.0% |
05—Questions
Frequently Asked Questions
What were the main drivers of Rockwell Automation's sales performance in fiscal year 2024?
Rockwell Automation's sales in fiscal year 2024 decreased by 9% due to a slowdown in customer spending, particularly in the Software & Control and Intelligent Devices segments. Macroeconomic factors and a shift in customer capital expenditure priorities contributed to this decline. However, the Lifecycle Services segment showed positive growth, indicating a more stable demand in that area.
How did the company manage its costs and profitability in the face of declining sales?
The company implemented cost productivity and margin expansion initiatives, including enterprise-wide restructuring charges of $97.4 million to optimize its cost structure. Despite these efforts, profitability was impacted by lower sales volumes and an unfavorable mix, leading to a decrease in Adjusted EPS to $9.71 from $12.12 in the prior year. The total segment operating margin also compressed.
What is the company's outlook and strategy for future growth?
Rockwell Automation's long-term strategy focuses on accelerating growth through technology differentiation, industry specialization, and expanding its market presence. The company aims to capitalize on megatrends like digitization, artificial intelligence, energy transition, and the need for increased resiliency in industrial operations. Growth in Annual Recurring Revenue (ARR) is a key priority, with a target of double-digit growth. The company also continues to invest in acquisitions and partnerships to enhance its offerings and market reach.
How is Rockwell Automation addressing cybersecurity risks?
Rockwell Automation has a comprehensive cybersecurity risk management program led by a Chief Information Security Officer. This program focuses on risk and threat identification, protection, detection, response, and recovery. It includes employee training, robust security measures for systems and data, and a risk-based approach to third-party vendor management. The company stated that it has not experienced cybersecurity risks that have materially affected its business or financial condition but remains vigilant.
06—Continue