Rockwell Automation Financial Model
Industrial Equipment Company Financials Example (Free Excel Download)
Rockwell Automation is a global leader in industrial automation and digital transformation solutions.
professionals from Deloitte
Used by professionals from
About this model
This model forecasts Rockwell Automation's future cash flows and earnings to determine an intrinsic equity valuation, helping an equity research analyst assess whether the company's transition towards higher-margin software and recurring revenue justifies its current market multiple.
- Rockwell Automation is a global leader in industrial automation and digital transformation solutions. The company provides hardware and software products that help manufacturers improve efficiency, reduce carbon footprints, and optimise plant floor operations.
- Business segments: Intelligent Devices (approx. 45% of revenue), Software & Control (approx. 29% of revenue), and Lifecycle Services (approx. 26% of revenue).
- Key geographies: North America is the primary market, followed by Europe, Middle East, and Africa (EMEA), Asia Pacific, and Latin America.
- Business model type: A hybrid model transitioning from traditional asset-heavy hardware sales to a higher-margin, asset-light software and subscription model (Software as a Service and Annual Recurring Revenue).
- Competitive position: Rockwell is a dominant player in discrete automation in North America, competing globally against industrial giants such as Siemens, Schneider Electric, ABB, and Emerson Electric.
- Recent major events: In fiscal 2025, the company recorded a non-cash impairment charge related to its Sensia joint venture and initiated changes to its legacy asbestos liability accounting, alongside a continued pause on major inorganic investments to focus on margin expansion.
The downloadable Rockwell Automation financial model includes SEC-sourced historical financials, forecast assumptions, core operating schedules, and valuation outputs in an Excel workbook built for review and scenario analysis.
A turnkey financial model
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
Historicals & AssumptionsRockwell Automation financial modelCompany, Historicals & Assumptions used
Source: SEC EDGAR · values in USD
| Line item | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue | $7.00B | $7.76B | $9.06B | $8.26B | $8.34B |
| Gross profit | $2.90B | $3.10B | $4.42B | $3.85B | $4.02B |
| Income before income taxes | $1.53B | $1.07B | $1.61B | $1.10B | $917.0M |
| Net income | $1.36B | $932.2M | $1.39B | $953.0M | $869.0M |
Forecast assumptions
Defaults used in the downloadable model. Forecast horizon: FY2026–FY2030.
See 8 moreSee less
How to build a detailed financial model for Rockwell Automation
A complete walkthrough of every driver, margin, working-capital input, and capital-allocation assumption used in the downloadable model.
Revenue Deep Dive
Intelligent Devices
- Segment name: Intelligent Devices
- Revenue driver formula: Industrial Production Volume x Automation Adoption Rate x Price per Unit
- Historical growth rate: Flat to low single digits (declined 1% organically in FY2025).
- Key growth levers and headwinds: Driven by secular trends in reshoring, electric vehicle manufacturing, and warehouse automation. Headwinds include cyclical industrial capex slowdowns and supply chain normalisation.
- Pricing dynamics: Highly dependent on raw material costs and tariffs; the company actively uses price realisation to offset inflation.
- Revenue recognition notes: Primarily point-in-time recognition upon shipment or delivery of hardware components (drives, motion, safety, sensing).
- Seasonality: Fiscal Q4 (ending September 30) is typically the strongest quarter due to year-end capital budget flushes by industrial customers.
Software & Control
- Segment name: Software & Control
- Revenue driver formula: Installed Hardware Base x Software Attachment Rate x Annual Contract Value
- Historical growth rate: Mid to high single digits (grew 9% organically in FY2025).
- Key growth levers and headwinds: Growth is fuelled by the transition to digital twins, cybersecurity, and cloud-based manufacturing execution systems. Headwinds include the macro-driven reluctance of customers to commit to large enterprise software deployments.
- Pricing dynamics: Shifting from perpetual licenses to subscription-based pricing, which creates a near-term revenue headwind but higher lifetime value.
- Revenue recognition notes: Subscription revenue is deferred and recognised rateably over the contract term, making Annual Recurring Revenue (ARR) a critical leading indicator.
- Seasonality: Less seasonal than hardware due to the rateable recognition of SaaS contracts, though bookings often spike in fiscal Q4.
Lifecycle Services
- Segment name: Lifecycle Services
- Revenue driver formula: Installed Base x Service Attachment Rate x Average Service Contract Value
- Historical growth rate: Flat to slightly negative (declined 3% organically in FY2025).
- Key growth levers and headwinds: Driven by the need for cybersecurity consulting, remote monitoring, and maintenance. Headwinds include the restructuring of the Sensia joint venture and lower engineered-to-order project volumes.
- Pricing dynamics: Contractual pricing for recurring services, while professional consulting is often billed on a time-and-materials basis.
- Revenue recognition notes: Recognised over time as services are performed or on a percentage-of-completion basis for large engineered solutions.
- Seasonality: Generally stable throughout the year, though project completions can cause lumpiness in specific quarters.
Cost Structure
Variable Costs / COGS
- Line-by-line breakdown: COGS includes raw materials (electronic components, metals), direct manufacturing labour, overhead, and third-party service delivery costs.
- Gross margin range: Typically 40% to 49% (reached 48.1% in FY2025).
- Key input costs and commodity exposures: Highly exposed to semiconductor availability, copper, and steel prices, as well as freight and logistics costs.
- How COGS scales with revenue: Hardware COGS scales linearly with volume, whereas software COGS exhibits massive operating leverage once development costs are covered.
Operating Expenses
- R&D: Typically runs at 5% to 6% of revenue. It covers hardware engineering and significant software development, a portion of which is capitalised.
- SG&A: The largest operating expense, driven heavily by the direct sales force, domain experts, and marketing. It includes significant incentive compensation which fluctuates with corporate performance.
- Depreciation & Amortisation: Driven by historical acquisitions (e.g., Plex, Fiix) and routine plant maintenance.
- Stock-Based Compensation: Material expense used to retain engineering and software talent, often adjusted out of non-GAAP earnings.
- Restructuring / one-time charges: Frequent adjustments for footprint consolidation, Sensia joint venture impairments, and legacy asbestos liability accruals.
Margin Profile
- Gross margin: 45% to 49% (expanding due to software mix).
- EBITDA margin: 20% to 24%.
- Operating margin: Total segment operating margin was 20.4% in FY2025.
- Margin trend: Expanding. The company achieved over 100 basis points of segment margin expansion in FY2025 driven by cost reduction actions, price realisation, and a favourable shift towards software.
- Segment-level margins: Software & Control is the most profitable (approx. 29.7% in FY2025), followed by Intelligent Devices (approx. 18.0%), and Lifecycle Services (approx. 14.5%).
Balance Sheet Structure
- Total assets: Approximately $10 billion to $11 billion.
- Key asset categories: Goodwill, intangibles, inventory, and accounts receivable.
- Goodwill & intangibles as % of total assets: Very high (often exceeding 40% of total assets) due to a history of bolt-on software acquisitions.
- Working capital profile:
- Days Sales Outstanding (DSO): Typically 60 to 70 days.
- Days Inventory Outstanding (DIO): Typically 100 to 120 days (elevated recently to buffer supply chain shocks).
- Days Payable Outstanding (DPO): Typically 50 to 65 days.
- Net working capital as % of revenue: Generally positive and consumes cash during periods of high hardware growth.
- Is working capital positive or negative? Positive. The company must hold physical inventory for its Intelligent Devices segment.
- PP&E: Relatively light compared to traditional industrials, consisting of assembly plants and testing facilities.
- Right-of-use assets / operating leases: Material but not dominant, primarily related to office space and regional distribution centres.
Capital Expenditure & Investment
- Capex as % of revenue: Typically 2% to 3% (targeted at approx. 3% for FY2026).
- Maintenance capex vs. growth capex: Roughly an even split, with growth capex increasingly directed towards digital infrastructure and software development.
- Major capex programmes underway or planned: Investments in plant modernisation and digital infrastructure to support internal productivity.
- Capitalised software / development costs if material: Yes, the company capitalises certain costs related to the development of its software platforms, which are then amortised over their useful lives.
- M&A pattern: Historically a serial acquirer of bolt-on software and cybersecurity firms (e.g., Plex Systems, Fiix, Clearpath Robotics), though management paused inorganic investments in FY2025 to focus on integration and margin expansion.
- Typical acquisition multiple paid: Often high (15x to 20x EBITDA) due to the premium valuation of industrial software assets.
Debt & Capital Structure
- Total debt: Approximately $2.61 billion in long-term debt at the end of FY2025.
- Debt/EBITDA ratio: Typically managed conservatively around 1.5x to 2.0x.
- Credit rating: Investment grade (typically A- or equivalent).
- Key debt instruments: Unsecured notes and a commercial paper programme backed by a revolving credit facility.
- Maturity profile: Well-laddered with a mix of medium and long-term notes.
- Interest rate profile: Primarily fixed-rate debt, resulting in a stable weighted average cost of debt.
- Covenants: Standard interest coverage and leverage ratio covenants, with ample headroom.
- Share repurchase programme: Highly active. The company repurchased 1.5 million shares for $419 million in FY2025.
- Dividend policy: Progressive dividend policy with a typical payout ratio of 40% to 50% of net income.
Cash Flow Characteristics
- Operating cash flow conversion: Very strong, typically >100% of net income.
- Free cash flow margin: Typically 12% to 16% of revenue.
- Major non-cash items that bridge net income to OCF: Depreciation, amortisation of acquired intangibles, stock-based compensation, and non-cash impairment charges (e.g., Sensia JV).
- Working capital cash flow impact: Inventory builds have been a use of cash in recent years, but normalisation is expected to become a source of cash.
- Capex intensity: Low (asset-light business model).
- Cash tax rate vs. GAAP effective tax rate: Cash taxes generally track the effective tax rate, though the GAAP rate can be volatile due to discrete items and legacy liability adjustments.
Sheet Structure
- Control Panel: Model toggles, scenario selectors (Base, Bull, Bear), and macro drivers.
- Assumptions: Hardcoded historical data and forward-looking assumptions for growth, margins, and working capital.
- Revenue Build: Segment-level revenue forecasting for Intelligent Devices, Software & Control, and Lifecycle Services, including ARR tracking.
- Income Statement: Consolidated P&L from revenue down to net income and EPS, mirroring the 10-K format.
- Balance Sheet: Assets, liabilities, and equity, balancing perfectly in all periods.
- Cash Flow Statement: Indirect method starting from net income, adjusting for non-cash items, and calculating Free Cash Flow.
- Working Capital Schedule: Detailed build of accounts receivable, inventory, accounts payable, and deferred revenue.
- Depreciation & Amortisation Schedule: Waterfall of existing PP&E and intangibles plus new capex and capitalised software.
- Debt Schedule: Tranche-by-tranche debt tracking, interest expense calculation, and commercial paper balances.
- Equity Schedule: Share repurchases, dividends paid, and retained earnings roll-forward.
- Valuation: Discounted Cash Flow analysis, WACC calculation, and terminal value assumptions.
Key Financial Relationships
- `Intelligent Devices Revenue = Prior Year Intelligent Devices Revenue * (1 + Intelligent Devices Growth Rate)`
- `Software & Control Revenue = Prior Year Software & Control Revenue * (1 + Software & Control Growth Rate)`
- `Lifecycle Services Revenue = Prior Year Lifecycle Services Revenue * (1 + Lifecycle Services Growth Rate)`
- `Total Sales = Intelligent Devices Revenue + Software & Control Revenue + Lifecycle Services Revenue`
- `Intelligent Devices Operating Earnings = Intelligent Devices Revenue * Intelligent Devices Segment Margin`
- `Software & Control Operating Earnings = Software & Control Revenue * Software & Control Segment Margin`
- `Lifecycle Services Operating Earnings = Lifecycle Services Revenue * Lifecycle Services Segment Margin`
- `Total Segment Operating Earnings = Sum of Segment Operating Earnings`
- `Gross Profit = Total Sales * Gross Margin Percentage`
- `SG&A Expense = Total Sales * SG&A Margin Percentage`
- `Accounts Receivable = (Total Sales / 365) * Days Sales Outstanding`
- `Inventory = (COGS / 365) * Days Inventory Outstanding`
- `Deferred Revenue = Prior Period Deferred Revenue + New Bookings - Recognised Software Revenue`
- `Free Cash Flow = Cash Provided by Operating Activities - Capital Expenditures`
- `Basic Shares Outstanding = Prior Period Shares - (Share Repurchase Amount / Average Share Price)`
Cross-Sheet Dependencies
- The Revenue Build feeds the top line of the Income Statement and drives the activity in the Working Capital Schedule (Accounts Receivable and Deferred Revenue).
- The Income Statement generates Net Income, which is the starting point for the Cash Flow Statement.
- The Working Capital Schedule calculates the change in net working capital, which feeds into the operating section of the Cash Flow Statement.
- The Depreciation & Amortisation Schedule feeds operating expenses on the Income Statement and is added back on the Cash Flow Statement.
- The Debt Schedule calculates interest expense for the Income Statement and requires operating cash flow from the Cash Flow Statement to determine cash available for debt paydown (creating a potential circularity that must be managed with a circuit breaker).
- The Cash Flow Statement determines the ending cash balance, which links directly to the Balance Sheet.
Sign Convention
- Income Statement: Revenues are positive. Expenses (COGS, SG&A, Interest, Taxes) are entered as positive numbers and subtracted in subtotal formulas (e.g., `Gross Profit = Revenue - COGS`).
- Balance Sheet: Assets are positive. Liabilities and Equity are positive. The check formula is `Total Assets - (Total Liabilities + Total Equity) = 0`.
- Cash Flow Statement: Cash inflows are positive. Cash outflows (capex, dividends, share repurchases, debt paydown) are negative.
- Working Capital: An increase in an asset (e.g., inventory) is a negative adjustment to cash flow. An increase in a liability (e.g., accounts payable) is a positive adjustment to cash flow.
Things Most Likely to Go Wrong
- Segment Margin Distortions: Total segment operating margin excludes corporate and other expenses. The model must explicitly deduct unallocated corporate costs to bridge from segment earnings to consolidated pre-tax income.
- Sensia Joint Venture Noise: The non-cash impairment charge related to Sensia in FY2025 distorts historical pre-tax margins. The model must normalise this to forecast run-rate profitability accurately.
- Asbestos Liabilities: Rockwell carries legacy asbestos liabilities that require periodic non-cash accrual adjustments. These should be modelled separately from core operations.
- Software Capitalisation: The company capitalises significant software development costs. Failing to model the cash outflow in investing activities and the subsequent amortisation in operating expenses will distort Free Cash Flow.
- Deferred Revenue Dynamics: As the company shifts to SaaS, reported revenue growth may lag bookings growth. The model must track the deferred revenue balance to capture the true cash generation of the Software & Control segment.
- Incentive Compensation Volatility: SG&A fluctuates significantly based on management incentive payouts. Using a flat SG&A percentage without adjusting for these swings can lead to inaccurate margin forecasts.
- Tariff Impacts: Management explicitly guides for tariff-based pricing (e.g., 1% in FY2026). The model should separate underlying volume/price growth from tariff pass-throughs.
- Share Count Reductions: Rockwell aggressively buys back stock. Failing to reduce the share count dynamically will result in understated EPS forecasts.
Validation Checks
- "Total segment operating margin should be in the 20% to 22% range; flag if outside this band."
- "Gross margin should remain between 45% and 49% based on the software mix."
- "Free Cash Flow conversion (FCF / Net Income) must exceed 100% due to the asset-light model and deferred revenue growth."
- "Capital expenditures should not exceed 3.5% of total sales."
- "The Balance Sheet must balance perfectly in every forecasted period."
- "Software & Control segment margin should remain the highest of the three segments (typically near 30%)."
- "Debt/EBITDA should remain below 2.5x to maintain the current credit profile."
- "Effective tax rate should be modelled between 16% and 18% excluding discrete one-time items."
Key Assumptions (Default Values)
| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| Intelligent Devices Revenue Growth | 2.0 | % | Reflects normalised industrial capex cycles and modest price realisation. |
| Software & Control Revenue Growth | 6.0 | % | Driven by secular transition to SaaS, ARR growth, and digital twin adoption. |
| Lifecycle Services Revenue Growth | 1.0 | % | Assumes stabilisation following Sensia restructuring and flat project volumes. |
| Intelligent Devices Segment Margin | 19.0 | % | Slight expansion from FY25 (18.0%) due to productivity and price/cost alignment. |
| Software & Control Segment Margin | 30.5 | % | Modest expansion from FY25 (29.7%) driven by software operating leverage. |
| Lifecycle Services Segment Margin | 14.5 | % | Held flat to FY25 actuals as the segment works through lower-margin backlog. |
| Gross Margin | 48.1 | % | Pegged to FY25 actuals, supported by favourable software mix. |
| SG&A as % of Sales | 23.0 | % | Historical average, adjusted for normalised incentive compensation. |
| Capex as % of Sales | 3.0 | % | Matches management guidance for FY2026 plant and digital infrastructure investments. |
| Days Sales Outstanding (DSO) | 65 | Days | Based on historical working capital efficiency. |
| Days Inventory Outstanding (DIO) | 110 | Days | Reflects current supply chain buffering strategy for hardware components. |
| Effective Tax Rate | 17.0 | % | Normalised rate excluding discrete legacy liability adjustments. |
| Annual Share Repurchase | 400 | $ Millions | Aligned with FY25 actuals ($419M) and management's capital allocation framework. |
| Dividend Payout Ratio | 45.0 | % | Consistent with historical progressive dividend policy. |
| WACC | 8.5 | % | Standard discount rate for a large-cap, investment-grade industrial technology firm. |
| Terminal Growth Rate | 2.5 | % | Reflects long-term GDP growth plus a slight premium for industrial automation tailwinds. |
Data Sources & Benchmarks
- Filings: SEC EDGAR database for Rockwell Automation (ROK) 10-K, 10-Q, and 8-K filings.
- Investor Relations: Rockwell Automation Investor Relations website for quarterly earnings presentations, transcript of the Q4 2025 earnings call, and Investor Day materials.
- Key Peers for Benchmarking: Emerson Electric (EMR), Siemens AG (SIE), Schneider Electric (SU), and ABB Ltd (ABBN).
- Industry Data Sources: Institute for Supply Management (ISM) Manufacturing PMI, U.S. Federal Reserve Industrial Production Index.
- Consensus Estimates: Bloomberg or FactSet for forward-looking EPS and revenue consensus to validate model outputs.
Sources
- Rockwell Automation, Inc. Form 10-K for the fiscal year ended September 30, 2025.
- Rockwell Automation Q4 2025 Earnings Release and Financial Charts (November 6, 2025).
- Rockwell Automation Q4 2025 Earnings Call Transcript and Prepared Remarks.
- Zacks Equity Research: Rockwell Automation Q4 Earnings Beat Estimates (November 6, 2025).
- Investing.com: Earnings call transcript - Rockwell Automation beats Q4 2025 forecasts (November 6, 2025).
Do more with the Rockwell Automation model
Frequently asked
What does Rockwell Automation do?+
Rockwell Automation is a global leader in industrial automation and digital transformation solutions. The company provides hardware and software products that help manufacturers improve efficiency, reduce carbon footprints, and optimize plant floor operations.
What are the primary revenue drivers for Rockwell Automation?+
Rockwell Automation's revenue is primarily driven by its Intelligent Devices, Software & Control, and Lifecycle Services segments. The company is also transitioning towards higher-margin software and recurring revenue models, which are becoming increasingly important drivers.
What is Rockwell Automation's typical capital expenditure as a percentage of revenue?+
Rockwell Automation's capital expenditure as a percentage of revenue is typically between 2% and 3%, targeted at approximately 3% for FY2026. This capex is roughly split between maintenance and growth, with growth investments increasingly directed towards digital infrastructure and software development.
How does the financial model assess Rockwell Automation's intrinsic valuation?+
The financial model forecasts Rockwell Automation's future cash flows and earnings to determine an intrinsic equity valuation. This analysis helps equity research analysts assess whether the company's transition to higher-margin software and recurring revenue justifies its current market multiple.
Can I download an Excel financial model for Rockwell Automation?+
Yes, a downloadable Excel financial model for Rockwell Automation is available. This model provides forecasts for the fiscal years FY2026 through FY2030 and includes key assumptions such as revenue growth and margin percentages.
What is Rockwell Automation's business model and competitive landscape?+
Rockwell Automation operates a hybrid business model, transitioning from traditional asset-heavy hardware sales to a higher-margin, asset-light software and subscription model. The company is a dominant player in discrete automation in North America, competing globally with industrial giants like Siemens, Schneider Electric, and ABB.
Have more financial modelling questions? Contact us
Created by ex-finance professionals
Hey, I’m Alex and I created Finamodel.
Over my years in the finance industry I kept building the same models over and over again. Same structure, same assumptions, different logo. So I started building frameworks to turn them into clean, reusable templates.
Every model here is one I’d actually use for a client, and I personally vet each one before it goes up.
I’m not an expert in every industry, but I’ve built enough models to know what belongs in one. And when something is completely foreign to me, I reach out to my network for experts to work on our models with us.
Having a template library on hand cuts a first build from hours to minutes.
Need help finding your model? You’ll find me in the Finamodel app!
Other Industrial Equipment Company Financial Models
Browse another company in the same sector.
Ametek
Ametek is a global manufacturer of highly engineered electronic instruments and electromechanical devices, serving niche industrial markets through organic innovation and disciplined acquisitions.
Caterpillar
Caterpillar is the world's leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives.
Cummins
Cummins designs, manufactures, distributes, and services a broad portfolio of power solutions, from diesel and natural gas engines to electric and hybrid powertrains, for commercial vehicle and industrial markets.
Deere & Company
Deere & Company is a global leader in the manufacturing of agricultural, construction, and forestry equipment, operating under the iconic John Deere brand.
Dover
Dover Corporation is a diversified global manufacturer delivering innovative equipment, consumable supplies, aftermarket parts, and software solutions.
Emerson Electric
Emerson Electric is a global technology and software company providing advanced automation solutions for process, hybrid, and discrete manufacturing industries, helping customers optimise operations, reduce emissions, and improve safety through proprietary hardware and software.
Fastenal
Fastenal Company is a leading North American wholesale distributor of industrial and construction supplies, operating through a dense network of branches and customer-specific Onsite locations.
Fortive
Fortive is a diversified industrial technology conglomerate that provides essential technologies for connected workflow solutions across industrial and healthcare applications.
Explore more Manufacturing financial model templates.
