Rockwell Automation Sees Up to 9% Organic Growth as Orders Surge

Key Points

• Rockwell expects 6%–9% organic growth in fiscal 2027, supported by automation demand, pricing and potential acquisitions; its fiscal 2026 outlook had climbed to 7.5%–9.5% by August.
• Orders are providing momentum: U.S. plant-capacity orders hit a record in fiscal 2026, the pipeline is larger than a year earlier, and fourth-quarter orders grew at a mid-teens rate. Fiscal 2027 guidance includes three percentage points from pricing, while Rockwell says it has not seen broad demand destruction.
• Rockwell is expanding its software and recurring-revenue strategy, targeting 7% growth in annual recurring revenue in fiscal 2027 and seeking faster growth over time. The outlook implies about 80 basis points of operating-margin expansion, and the company expects acquisitions to contribute to growth.

Rockwell Automation NYSE: ROK expects organic growth of 6% to 9% in fiscal 2027, with demand for automation equipment, higher prices and potential acquisitions contributing to its outlook, Chairman and CEO Blake Moret said at a Baird event.

Moret said data centers, semiconductors, automotive and life sciences exceeded the company’s expectations in fiscal 2026. Automotive, which accounts for about 10% of Rockwell’s revenue, strengthened particularly in the latter part of the year, he said. Pharmaceutical demand was supported in part by GLP-1 drugs, although Moret described life sciences strength as broad-based.

The company began fiscal 2026 with an organic growth outlook of 2% to 6%, which had risen to 7.5% to 9.5% by August, Baird Senior Research Analyst Quinn Fredrickson said. Moret characterized the fiscal 2027 outlook as prudent.

Orders and Pricing Support Outlook

Moret said fiscal 2026 orders for new U.S. physical plant capacity were the highest Rockwell had seen to date, and the pipeline entering fiscal 2027 was larger than it had been a year earlier. Fourth-quarter orders grew at a mid-teens rate, he said, adding that the first quarter had started well.

Rockwell’s fiscal 2027 guidance includes three percentage points of price contribution but excludes a planned December price increase, Moret said. He identified memory as a major source of cost inflation and a reason for higher prices, although he said the company had largely kept ahead of memory supply shortages.

Matheus Bulho, senior vice president of Software and Control, said higher costs for IT infrastructure had suppressed some demand in Lifecycle Services, including projects involving network monitoring and industrial data centers. He said there was no significant business-continuity concern.

Moret said Rockwell had not seen broader demand destruction from pricing. He cited 25% growth in Logix in the fourth quarter, attributing it to underlying demand and pricing rather than customer restocking.

Software and AI Strategy

Bulho said Rockwell’s software-defined automation strategy is intended to increase demand by allowing more frequent updates and extending its Logix control technology into applications where it has not traditionally been used, including mobile robots. He said Rockwell expects most deployments to continue using traditional industrial hardware, even as the software becomes more pervasive.

Moret said the company plans to show FactoryTalk Conductor at its upcoming Automation Fair. He said the offering uses agents to speed the integration and operation of control systems, creating a new recurring revenue stream while potentially increasing demand for existing Rockwell hardware and software.

Rockwell guided to 7% growth in annual recurring revenue in fiscal 2027, Moret said, but wants the roughly $1 billion business to grow faster over time. He said the company is launching new software with recurring revenue models rather than perpetual licenses.

Bulho also said AI is helping Rockwell increase employee productivity, particularly in software development, allowing it to introduce more innovations with virtually the same staff.

Margins and Acquisitions

Fredrickson said Rockwell’s fiscal 2027 guidance implies about 80 basis points of enterprise operating margin expansion. Moret said additional pricing not included in the outlook could provide upside, while unusual inflation or greater tariff volatility could present risks.

Moret said Rockwell expects inorganic growth to return in the coming year. Its acquisition priorities include profitable hardware businesses that can increase share in Europe or Asia, fit with the company’s U.S. distribution network and add to earnings per share in the first year.

About Rockwell Automation (NYSE:ROK)

Rockwell Automation, Inc. is an industrial automation and digital transformation company headquartered in Milwaukee, Wisconsin. Its roots date to 1903, when it was founded as the Compression Rheostat Company. The company provides hardware, software and services that help manufacturers automate and manage industrial operations. Its offerings include control systems, sensors, motor-control products, industrial software and services for optimizing production and maintaining equipment. Its Allen-Bradley and FactoryTalk brands are among its best-known product lines.

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