Thank you for holding, and welcome to Rockwell Automation's quarterly conference call. I need to remind everybody that today's conference call is being recorded. At this time, I would like to turn the call over to Aijana Zellner, Head of Investor Relations and Market Strategy. Ms. Zellner, please go ahead.

Thank you, Julianne. Good morning, and thank you for joining us for Rockwell Automation's Third Quarter Fiscal 2025 Earnings Release Conference Call. With me today is Blake Moret, our Chairman and CEO; and Christian Rothe, our CFO. Our results were released earlier this morning, and the press release and charts have been posted to our website. Both the press release and charts include reconciliations of these non-GAAP measures. A webcast of this call will be available on our website for replay for the next 30 days. For your convenience, a transcript of our prepared remarks will also be available on our website at the conclusion of today's call. Before we get started, I need to remind you that our comments will include statements related to the expected future results of our company and are, therefore, forward-looking statements. Our actual results may differ materially from our projections due to a wide range of risks and uncertainties that are described in our earnings release and detailed in all our SEC filings. So with that, I'll hand it over to Blake.

Thanks, Aijana, and good morning, everyone. Thank you for joining us today. Before we turn to our third quarter results on Slide 3, I'll make a couple of initial comments. Rockwell had another good quarter as we returned to year-over-year sales growth. We had a diverse set of strategic wins in the quarter across discrete, hybrid and process industry segments. I'll highlight some of these in a few minutes. We're also making good progress on our journey to the segment margin goals we introduced at our November 2023 Investor Day. This is largely due to very good progress on our enterprise-wide productivity programs even as more of the year-over-year savings shifts from the initial SG&A reductions to direct material cost and indirect services cost savings and operational efficiencies. We have already achieved our full year goal of $250 million in year-over-year productivity, a quarter earlier than we anticipated, and I'm proud of how our organization has operationalized our ambitious productivity and continuous improvement targets. Price/cost also remains favorable, including the net impact from tariffs, which was minimal in the quarter. Importantly, we intend to take bold steps to continue our progress. Over the next 5 years, we will invest over $2 billion in plants, digital infrastructure and talent to grow share, build resilience and expand margins. The United States will be the largest beneficiary of these investments, which are primarily CapEx. These investments will complement our robust productivity programs to drive our global growth and margin expansion goals. We'll go into more detail on the scope and milestones tied to these investments in November, but it will include thoughtful implementation of automation to drive plant efficiency, talent to fuel our highest return offerings and an AI-first business system to provide unmatched employee partner and customer experiences. This is right in the wheelhouse of our expertise, and we'll be taking you and customers along with us on this journey. It's an exciting time to be a part of the Rockwell Automation story. Turning to our third quarter results on Slide 3. While most customers continue to prioritize their spending on the productivity and efficiency of existing capacity, some are advancing their strategic plans for larger CapEx projects, including greenfields. Similar to last quarter, our total company book-to-bill was about 1.0 with year-over-year orders growth in the Americas, EMEA and Asia. Q3 sales were above our expectations. Reported sales were up 5%, and our organic sales were up over 4% year-over-year, with currency contributing less than 1 point of growth in the quarter. Similar to last quarter, product sales were better than some of the longer-cycle businesses, which tend to be more capital intensive. It's likely there were some customer pull-ins in the quarter, and we'll talk more about that in a minute. Annual recurring revenue grew 7% in the quarter, below our expectations. Double-digit growth in our cloud-native software business was offset by relative weakness in recurring services, mainly driven by delays in cybersecurity investments. From a business segment standpoint, our Intelligent Devices organic sales were up 1% versus prior year, with double-digit growth in products more than offsetting the year-over-year decline in our longer-cycle configure-to-order business. We leveraged our differentiated intelligent devices portfolio to secure some new capacity wins, both in greenfield and brownfield applications. One of these wins was with Freshpet, a leading pet food manufacturer who is looking to expand their fresh food production capacity with a new processing plant in Ennis, Texas. Freshpet chose Rockwell for our standardized designs, product interoperability and a differentiated motor control center offering to help accelerate time to market at this greenfield. Another strategic MCC win in the quarter was also in the food and beverage space with Incobrasa Industries, a Brazilian soybean processing and biodiesel manufacturing company that is expanding in the United States. Rockwell was selected as Incobrasa's official automation partner for their new state-of-the-art facility in Central Illinois. Clearpath sales were up double digits, but continue to be affected by CapEx delays in automotive. We're making good progress in integrating the auto AMR platform with our overall roadmap for autonomous operations and to improve profitability even in a period of subdued customer CapEx investment. Software & Control organic sales grew 22% year-over-year, driven by strong growth in our hardware business. Logic sales were up over 30% versus prior year and up low double digits sequentially. Our SaaS business grew 10% year-over-year with strategic wins across Plex and Fix. One of our important software wins in Q3 was with Beam Therapeutics, a leader in manufacturing cell and gene therapies. FactoryTalk, PharmaSuite, MES software will help this customer automate their production process and ensure quality control as they continue to expand their commercial operations in this fast-growing vertical. Another competitive win in the quarter was with Hancock Iron Ore. We are excited to be partnering with HIO as they take the next step in their digital journey. Working closely with our Kalypso team, this customer is adopting our advanced AI-driven predictive maintenance solutions like GuardianAI and data mosaics to enhance reliability and performance across their operations. This engagement is a testament to the strength of the ongoing relationship and our mutual focus on building the future of mining together through co-innovation. Lifecycle Services organic sales declined 6% versus prior year, but were largely in line with our expectations given the difficult year-over-year comparison. Book-to-bill in this segment was 1.06 and was above 1.0 across all the contributing businesses. As we expected, customers continue to delay larger capital projects in Q3, waiting for more clarity and certainty around the impact of trade and policy on their input cost and volume. Rockwell's segment margin of 21.2% and adjusted EPS of $2.82 were both above our expectations, mainly due to higher volume and strong execution on our cost reduction and margin expansion actions. Let's move to Slide 4 to review key highlights of our Q3 industry performance. Our discrete sales grew 10% versus prior year, driven by growth in automotive and e-commerce and warehouse automation. While most of our automotive customers continue to delay their capital investments, we had a large number of wins in the quarter. One of these brownfield projects in Q3 was to help Hyundai Motor Group expand their hybrid electric vehicle production in Georgia as they transition from EV only to a multi-energy production model, which addresses evolving consumer demand. Another important automotive win this quarter was with Lucid Motors, who chose our FactoryTalk MES for their state-of-the-art greenfield facility in the Kingdom of Saudi Arabia. E-commerce and warehouse automation sales were up 30% year-over-year with continued strength across all customer segments. In addition to our core automation offering, we're seeing more interest in autonomous material movement as our customers realize the benefits of our auto platform. Whether it is basic station to station movement or handling complex payloads, Rockwell is uniquely positioned to help scale AMR fleets to the operational needs of our customers and integrate with the rest of their automation. Moving to our hybrid industries. Sales in this segment increased high single digits versus prior year with good growth across food and beverage, home and personal care and life sciences. I already talked about some of our strategic wins in food and beverage earlier on the call. We continue to see strong year-over-year and sequential growth at our packaging OEMs as they continue to invest in their next-generation machines for both food and beverage and HPC end users. Sales in our life sciences vertical were up high single digits in Q3. While tariff uncertainty has caused a number of end-user project delays, we continue to build a strong pipeline of projects with both machine builders and end users. Our strong software and digital services capabilities continue to differentiate us in the fast-growing GLP-1 space. This quarter, Rockwell was selected by Thermo Fisher to help accelerate production of GLP-1 injectables for new capacity expansion by cutting their MES implementation timeline in half. Turning to process industries. Our sales in this segment were down low single digits. From a broader process standpoint, energy, chemicals, mining and metals are all facing pressure from weak global demand and volatile commodity prices, which is hampering their ability to invest. With that said, each end market is selectively redirecting capital to their highest strategic priorities, including meeting their sustainability and modernization goals. In energy, we do have both the technical portfolio and market access to participate in an all-of-the-above strategy to meet accelerating capacity needs. And we had examples of both traditional fossil fuel and renewables wins in the quarter. One of these wins was with a global energy technology company, where our PlantPAx process control solution was chosen for their hydroelectric project in India as part of the country's push for energy security through reliable and renewable electricity. We also secured an important oil and gas win with a leading Middle Eastern national oil company who chose our Sensia joint venture for the region's most strategic automation and cybersecurity upgrade project with significant recurring revenue potential. Moving to Slide 5 and our Q3 organic regional sales. Once again, North America was our best-performing region in the quarter, and we expect it to be our strongest region for the full fiscal year 2025. Let's now turn to Slide 6 to review our fiscal 2025 outlook. To be sure, we continue to operate in a volatile environment. It's good to have the U.S. tax bill in place, continued low unemployment and to see some progress on tariff negotiations. However, U.S. trade policy with some important countries remains uncertain and geopolitical risk remains elevated. Accordingly, our top line outlook for the second half of this fiscal year is largely unchanged with a slight increase to our prior guide due to tariff-related price increases and favorable currency. We do see a modest shift forward in the calendarization of our sales between our fiscal third and fourth quarters. Given the continued trade uncertainty, we think some customers have pulled forward orders from Q4 to Q3 in order to mitigate risk and secure critical components. We now expect our reported and organic sales growth for the year to be in the positive 1% to negative 2% range. The midpoint of our guide assumes low single-digit sequential sales growth in Q4. We expect our annual recurring revenue to grow high single digits this year. We continue to expect our full year segment margin to be about 20%, and we are increasing our adjusted EPS outlook to be $10 at the midpoint. We continue to expect free cash flow conversion of 100% in fiscal '25. I'll now turn it over to Christian to give more detail on our Q3 and financial outlook for fiscal '25.

Thank you, Blake, and good morning, everyone. I'll start on Slide 7, third quarter key financial information. Third quarter reported sales were up 5% versus prior year with minimal impact from currency. About 3 points of our organic growth came from price. While price/cost was favorable, about 1 point of our price realization was from tariff-based pricing, which was neutral to EPS. Benefits from cost reduction and margin expansion actions and price realization more than offset higher compensation. Adjusted EPS of $2.82 was above our expectations, primarily due to the beat on the sales line as well as segment operating margin. The adjusted effective tax rate for the third quarter was 15.2%, above the prior year rate of 13.3%, primarily due to lower discrete tax benefits. We continue to expect a 17% ETR for fiscal 2025. Free cash flow of $489 million was $251 million higher than the prior year. Free cash flow conversion was 153% in the third quarter. Slide 8 provides the sales and margin performance overview of our 3 operating segments. While sales in lifecycle services came in as expected, performance in Intelligent Devices and Software & Control exceeded expectations, with product growth more than offsetting the decline in our configure-to-order businesses. All segments executed well on our cost reduction and margin expansion targets, helping absorb the year-over-year increase in compensation expense. As a reminder, we did not have any incentive compensation costs in the same quarter of last year. Intelligent Devices margin of 18.8% decreased by 140 basis points year-over-year against one of their most difficult comps of the prior year, primarily due to the higher compensation expense I just mentioned. Given the small year-over-year dollar change in sales in this segment, decrementals are not as meaningful this quarter. We continue to see good price realization in this segment. Software & Control margin of 31.6% was up 800 basis points versus prior year, driven by double-digit volume growth and strong price realization. The segment saw year-over-year incrementals in the high 60s. Lifecycle services margin of 13.3% was down 600 basis points year-over-year. A mid-single-digit sales decline against record segment margins that had no incentive expense in the prior year drove the decrementals in the quarter. I want to take a moment to point out the sequential movement we saw in each of our segments. Intelligent Devices had incrementals that were in the 30s from Q2 to Q3, reflecting revenue improvement, cost reduction and margin expansion execution and strong price realization, partially offset by tariff costs, compensation and FX. Software & Control sequential incrementals were in the mid-40s with strong volume partially offset by higher compensation. Lifecycle Services saw small sequential dollar changes in both sales and segment earnings, with higher compensation being the driver of lower margins. Overall, for Rockwell, the incremental margin on the sequential sales growth was in the low 30s. This rises to the mid-30s if you exclude tariff-based pricing and cost, which again was EPS neutral. The next Slide, 9, provides the adjusted EPS walk from Q3 fiscal 2024 to Q3 fiscal 2025. Year-over-year, core conversion was close to 60% and contributed $0.35 to our EPS on the 4% organic sales increase. Software & Control was the primary driver of both sales and earnings growth in the quarter, where we saw margin expansion on continued improvement in Logic sales. Pricing was strong for the company, and we continue to fund new product development with company R&D at 6% of total revenue. We saw excellent execution on our cost reduction and margin expansion actions, which were above our expectations, resulting in a $0.60 tailwind. You'll see a $0.60 impact from compensation. Our Q3 outperformance and higher guidance for the year brings with it increased incentive expense. As I said earlier, we had no annual bonus expense last year. We expect about $0.30 of compensation costs in Q4. Full year compensation expense, which includes merit and bonus, is expected to be about $230 million. Currency was a $0.15 EPS headwind as the timing and movement of exchange rates, particularly in some of our foreign production locations such as Mexico and Poland, created transactional headwinds. All other items resulted in a $0.09 net headwind. Moving on to the next slide, 10, to discuss our updated guidance for the full year. We narrowed our sales guidance range this quarter, raising the midpoint of our reported sales guidance to a negative 0.5% sales decline year-over-year. This reflects a slight increase from our prior organic sales guide, 0.5 points, driven by tariff-based price increases in the second half. The other portion of our sales midpoint guidance increase comes from currency as we now expect the full year FX impact to be neutral to sales and a $0.10 headwind to EPS. Our segment operating margin guidance of about 20% is unchanged. Last quarter, we talked about low single-digit sequential sales growth in Q3 and high single-digit sequential growth in Q4. With our updated guidance, we expect Q4 will be up low single digits sequentially after a high single-digit sequential increase in Q3. Segment operating margins exceeded expectations in Q3. For Q4, we expect margins to be similar to Q3 on slightly higher revenue with unfavorable mix offsetting the sequential volume leverage. We are updating our adjusted EPS guidance to a range of $9.80 to $10.20 or $10 at the midpoint. The EPS guidance increase reflects our strong operating performance and continued progress on our cost reduction and margin expansion actions. A few additional comments on fiscal 2025 guidance for your models. Corporate and other expense is expected to be around $155 million. Net interest expense for fiscal 2025 is expected to be about $140 million, and we're assuming average diluted shares outstanding of about 113 million shares. Our share buybacks in Q3 were approximately 500,000 shares in the quarter at a cost of $123 million. As of June 30, approximately $1 billion remain available under our existing share repurchase authorization. Moving on, I want to expand on a few topics. First, let's talk about tariffs and our assessment of possible pull-in activity. We continue to expect the EPS impact of tariffs for fiscal '25 to be mitigated through resiliency actions and price increases. The EPS impact in the third quarter was close to 0, while about 1 point of our sales growth in Q3 was attributable to tariff-based pricing. With regard to pull-ins, as Blake mentioned, we are not seeing a notable inflection in underlying customer demand. We have a strong process to identify and address obvious attempts to buy ahead of announced tariff-based price increases, and we have canceled some orders as a result. That being said, we think it's possible that pull-ins accounted for at most 2 to 3 points of our growth in the third quarter. Our thesis for the second half remains intact and we believe any pull-ins that may have happened were largely just Q3, Q4 timing differences. Second, our cost reduction and margin expansion initiative reached a major milestone this past quarter. This program was initiated midway through our last fiscal year with some very ambitious goals, $100 million of cost savings in the second half of fiscal 2024 and another $250 million of savings in fiscal '25. We exceeded our goal and delivered $110 million of savings in fiscal '24. This year, we met our full year target of $250 million of savings in only 3 quarters. All told, that is $360 million in structural cost savings achieved over 5 quarters. Our team has performed extremely well for the past 1.5 years, and we are all grateful for their efforts. Well done. At our last Investor Day, we shared our Rockwell operating model. One objective is to operationalize the excellent work of our cost reduction and margin expansion teams. This bridges the gap to take the program from an event and turn it into a way of life. The team is prepared. Now that we have achieved our targets, we are going to transition the tracking of our cost reduction and margin expansion program into core in our reporting structure because by operationalizing this work into our day-to-day, it is now becoming part of our core. Finally, let's talk about the next few years and the art of the possible as well as some of the areas where we have developing programs. As Blake shared earlier, we intend to invest $2 billion over the next 5 years. This is inclusive of OpEx and CapEx for plants, digital infrastructure and talent. To be clear, a portion of this will include brick-and-mortar. We will share additional information at our Investor Day in November, but know that each element of this program will have a clear ROI aimed at enhancing competitiveness, expanding margins, and positioning Rockwell for long-term growth. We believe in the power of industrial automation and digital transformation. That's true for our customers. It's also true for us. This investment reflects our conviction. With our progress on price, productivity and strong operating performance, we are on a good path to reach the segment margin targets we introduced in 2023. We are now focusing on long lead time actions that will help us define and drive the next phase of our operating margin expansion. That's this program, investing today to help expand margins in the future and to help us achieve the next set of goals. Some other items for your long-term model. CapEx as a percentage of sales, which has historically hovered around 2%, could range between 2.5% to 4% in any given year as we make ROI-based decisions on brick-and-mortar, digital infrastructure and capital equipment. R&D spending as a percentage of sales will remain targeted at around 6%. We believe this is important to support our growth engine. A couple of notes on upcoming tax changes. First, as we have mentioned in the past, we will become subject to Best Pillar Two in fiscal '26. Current framework could cause our effective tax rate to increase 2 to 3 percentage points in fiscal '26, resulting in an EPS headwind. Second, as it relates to the new U.S. tax bill, we don't expect it to provide significant savings to Rockwell, primarily due to our international structure and minimum tax laws. We do believe, however, that accelerated depreciation can drive investment by our small and medium-sized customers. This is a sweet spot for Rockwell, particularly with the help of our partners. We delivered 3 solid quarters so far in fiscal '25. That doesn't happen without great execution throughout our organization, great customer relationships and a strong partner network. Those efforts are truly appreciated. Let's have a solid finish to the year. With that, I'll turn it back to Blake for some closing remarks before we start Q&A.

Thanks, Christian. We're happy to see a return to year-over-year growth, including an improving outlook in some of our largest discrete and hybrid verticals. The leverage from this growth will complement our continued focus on cost discipline, execution and margin expansion. I'm excited to supercharge these efforts by further capturing the benefits of automation and digital transformation within our own operations. It's hard to believe, but this year's Automation Fair and Investor Day are only 3 months away. We returned to McCormick Place in Chicago, the week of November 17, with Investor Day activities on November 18 and 19. We're looking forward to showcasing the best solutions and partner network in the business, including software-defined automation and AI-enabled technology from sensor to software, integrated intelligent devices, robotics and digital services. You will hear from customers about our differentiated value and from management as we review progress on our goals, details of our internal investments and inorganic priorities. I'm looking forward to seeing you there. Aijana, we'll now begin the Q&A session.

Thanks, Blake. Julianne, let's take our first question.

Our first question comes from Scott Davis from Melius Research.

It's been a long earnings period. Can we discuss the capital expenditures since that's a significant figure for you? Historically, your spending on capital has been limited. What’s driving this change now? On one hand, you might be catching up on investments, but on the other, are you being proactive in your strategy? How do you perceive this?

Scott, let me start by saying this is solidly on offense. So we are very encouraged by the progress on our productivity programs over the last 1.5 years. And while we continue to be focused near term on getting to those margin goals for each business segment and overall for the company, you've asked us in the past, so what's next? What else can we do to continue to drive this? And we're taking decisive moves to be able to address just that in ways to, of course, address our ongoing capacity needs, but to continue that push to expand margins. And Christian has talked about the willingness to invest capital in the service of expanding margins, and that's really how you should think about this. And we've talked about our plants, our talent and our digital infrastructure. I want to also make it clear that we're not beginning from a standing start. We've already done this in a number of our operations, but this is accelerating that. And we're encouraged by what we've already seen in some of the places within our plants that we've done these things that we've digitized, we've added additional automation. We've used our own simulation tools to improve layout. And typically, we see the results show up in labor productivity, being able to do more with a finite amount of human resources. We see it in energy consumption. We see it in faster time to confidence. There's a number of benefits that we've seen in our plants. We certainly are talking about this every day with customers, and now we're doing it at scale. And I could go through the other benefits in each of these areas. We're going to spend some time on this in November at Investor Day. But now is the time because these things have a certain ramp time, and we want you to understand how, as you hear about individual investments, how they fit together as part of this cohesive program.

Maybe a couple of items that I'll add to that. Not all of this $2 billion is incremental. A portion of that is what's already built in our run rate and our current spending levels that we have on CapEx, for example. And so don't look at it all as incremental. We're including some of the run rate in that. The second part is that these programs, as I mentioned, are all going to be ROI-based and that our hurdle rate for these programs is in the double digits. But obviously, those are risk-adjusted based on the program and the project. But for sure, we are looking for each of these to be giving us an ROI and hopefully, over time, also helping us to expand our margins. The last part actually is around the margins. And just to underscore what Blake said, we do see a path already to getting to the 23.5% target that we have in place from November 2023 at our Investor Day that we put in place and the corridors for each of the segments. This is really about that next horizon. It's about thinking about where can we go over the long term with the business of Rockwell. And as we think about when we're going to achieve that 23.5%, what's that next target going to look like? And we have to create some more runway, and this is a great opportunity for us to do that.

Yes. I think about this as the current programs that we talk about each call get us to that 23.5% operating margin. These are programs that get us through those margin corridors.

I know that you're going to talk about at the Analyst Day, but you did sort of highlight some investment headwinds, some tax headwinds. How do you think about just generally about growth into next year? And this recovery basically and operating leverage trump this? Or does that mean structurally lower growth for the next couple of years?

Yes. Certainly, the top line growth that we'll be prepared to talk about in November is a really important piece of the equation. I'll say we're happy to have returned to year-over-year growth in Q3, and we intend to do everything that we can to continue that. We're encouraged as we talked about with some of the improvement in some of the key verticals within particularly discrete and hybrid, which are areas that are important to us. And we are committed to continuing to make progress towards those margin expansion targets regardless of what top line does, and we've certainly contemplated the potential for the tax headwind that Christian talked about as we say that. So we're continuing to forge through, and we feel like we're holding some good cards in terms of momentum that allow us to mitigate the impact of some of these other things.

Yes. And just to build off that a little bit more, we do expect we're going to get price next year. The cost reduction and margin expansion programs that we've been working on, while they are going into our core as we operationalize them, we still continue to expect that those programs are going to be giving us a yield. Obviously, the comps get more and more difficult as we continue to build out these programs, and that's okay. But we are expecting that we're going to get margin expansion next year as well. And we'll give you more detail as we get into the next quarter on the earnings call.

Yes. And I guess just one last point on that, Andrew, is the tariffs that have been announced, including the more recent ones, we feel like we have strong mitigation plans as we did this year for those tariffs as we go into next year.

Taking a step back to examine your broader restructuring program, I understand there's a shift towards emphasizing continuous improvement rather than larger restructuring initiatives. With the quarter wrapped up, how would you assess the progress made? Which areas, such as direct material spend, supply chain, SKU rationalization, or transport cost rationalization, did you find the easiest for achieving progress? Conversely, where do you believe there's potential for more significant advancements? I recognize this might come across as seeking a preview for Analyst Day, but it's worth noting that you achieved greater efficiency in cost reductions than anticipated.

Yes. I believe part of it, and I'm sure Christian will have more to add, is that the program's features enabled us to achieve results faster than anticipated due to the extensive range of cost savings we targeted. Initially, we realized savings mainly from SG&A cost reductions, but we quickly advanced to other structural savings. I'm pleased with the reductions we've made in our direct material costs, which will improve further as our volume increases, enhancing the per unit savings. Regarding indirect services and manufacturing efficiencies, I would say that there is significant potential for further gains in manufacturing efficiencies, making it a crucial aspect of the program we unveiled today.

Yes, to follow up on that, headcount reductions are difficult decisions, but they can be implemented quickly. The program initially focused on SG&A with some headcount reductions before expanding into indirect spending, which takes longer to address. We are also examining areas that require more time to adjust, like optimizing how we transport materials. Additionally, we are working on product redesigns and sourcing improvements. We have now shifted our focus toward enhancing operational excellence in our factories, where we're investing in warehouse automation, which also takes time to see results. Overall, the approach involves executing various initiatives effectively. It's crucial for us to remain vigilant about costs to prevent them from increasing again and to ensure that we maintain our progress.

Our next question comes from Andy Kaplowitz from Citigroup.

Blake or Christian, you reported a book-to-bill ratio of 1x, which indicates that you've experienced a gradual sequential improvement in bookings as you previously indicated this year. However, you also mentioned a 2% to 3% pull-in for Q3. Is the current environment still conducive to a gradual improvement in underlying bookings from this point onward? Additionally, you noted some increased greenfield activity from your customers, and Logic sales have significantly risen. Do you view this as a sign of increased reshoring activity or perhaps more capital expenditure-related activity despite some delays? Any additional insights would be appreciated.

Yes. Let me start by saying the projects that we're attracting, we're seeing delays, but not cancellations. People are still looking at these as opportunities to increase their resilience to make market share moves. In general, among our customers, they're just being subject to a higher level of scrutiny. People are looking again and again at the business case to make sure they have a good handle on their cost, what the demand picture is and so on. That being said, when projects do pass that hurdle rate, they are being green lit, and we've seen greenfields and brownfields. Overall, we expect to see a higher intake of orders related to new U.S. capacity in fiscal year '25, and we expect that number to go up again in fiscal year '26. We're tracking it. We're having a good success rate as we look at these and coordinate our coverage around the world. So I'm encouraged by that. And as I mentioned, we saw some nice development in, in particular, discrete and hybrid verticals, which, of course, is our strength. We've been in automotive for a long time, and we had some nice wins in both basic control as well as in software there. Food and beverage, our single biggest vertical, over half of that business is really concentrated through machine builders, especially packaging machine builders and some of our new products are helping us win new business there. So we saw some good results in the quarter. We didn't show it on the slide, but home and personal care, we're also seeing some spend there. So we think we're in a good spot, and we're looking forward to as hopefully, additional certainty frees up some of that CapEx spend, but we're not waiting. We're continuing to be on offense, both in terms of winning every order that is available out there as well as continuing to expand our margins.

On the book-to-bill question, yes, we've been running around 1 in the last couple of quarters, which is what we were expecting it was going to do as we got into a more normalized environment. So you can read that to be that the backlog is generally flattish. And as we get into Q4, we do have a little bit more seasonal shipments that happen in our project business, especially in the lifecycle. So we do give that visibility around book-to-bill and lifecycle. It wouldn't be surprising if their book-to-bill went a little bit below 1. But generally, the demand environment and what we're seeing from orders is keeping on with that pace of what we're seeing on the shipment side.

Appreciate that. And then you sound arguably a little more positive about getting to your medium-term target of that 23% segment margin. But maybe if we could just focus on your largest segment for a second of Intelligent Devices. How do you think about the margin potential in Intelligent Devices? The segment is still in the high teens, but as you guys know, it's delivered low 20s on lower revenue in the past. So what would it take to improve the margin there? Is it kind of what you guys talked about, more factory work, SKU reduction? Christian, maybe any thoughts there? Can you turn the corner in that segment as early as FY '26 towards significantly higher margin?

Look, we are absolutely committed to the overall margin target as well as the 22% to 24% corridor that we've talked about specifically for Intelligent Devices. We're encouraged that the last couple of quarters have seen sequential improvement in margin percentage, but we certainly have lots more work there, and we've identified specific areas. I'll mention a few, and Christian will have some others. First of all, I mentioned that we saw overall good progress in reducing the cost of what we pay for direct material. And that's especially important for intelligent devices because it is a big business with by far the largest SKU count. So as we increase unit volume, it's amplified across a broad range of all of those products. The pricing on the long tail of SKUs that we've talked about over the last year is especially important for Intelligent Devices, again, because they have such a diversity of SKUs in that offering. Project recovery, so the configure-to-order business is particularly leveraged to any uptick in CapEx spend, and we'll see some improvement there. And then specifically, Clearpath. I mentioned it in my prepared remarks, we're seeing double-digit growth. We're making progress on profitability, but there's more work to be done there.

Yes. I believe you addressed many of the same points I would have mentioned. Ultimately, it's about focusing on the individual elements of this business while also maintaining operational excellence. There is certainly a path forward. We have a long-term strategy that we've discussed with the team, indicating that we can continue to achieve leverage in this business.

Maybe I just wanted to start with the revenue. And sorry if it's a bit of a hodgepodge of a question, but I understand, Blake, you mentioned a 2% to 3% pull forward of sales into Q3, but you also referenced a handful of times project delays. And then if I look at Slide 13, you've got 9 markets laid out there, and I think the outlook is lower for 6 of them versus April. So I'm just sort of trying to understand how significant, let's say, were the pull forwards in Q3 versus the project delays effect? And again, the sort of weighting of the market updates on Slide 13 looks perhaps more negative than your overall tone.

Right. So let me break that down just a little bit further. So the potential pull forwards that we highlighted are really in the product side. So if people are going to make a pull-forward purchase, they're going to do that in the product area. And we thought that, while, again, we have good processes to avoid taking orders that are obviously opportunistic, let's say, to avoid a price increase, we think it's prudent to give allowance for the possibility that we did see some pull forward in our product orders. The delays are more on the project side, and you see that primarily in the configure-to-order portion of intelligent devices as well as in lifecycle services. So that would be the distribution. Now as you go through the different verticals. Automotive had a good Q3. We returned to good year-over-year growth. Again, I would look at that as a little bit of that prudence that we don't want to get too far ahead of ourselves and saying this is the beginning of a trend. But there was definitely some nice wins within automotive. There's a huge installed base that has to be serviced to be able to continue to keep production running at a good rate. The other vertical that isn't shown in the exhibit is Home & Personal Care that had strong growth year-over-year in the quarter. So you look at that, and I'd say it's a largely balanced view. And as Christian said, we think that the demand picture hasn't changed too much, but that's somewhat constructive on the product side and again, with continued delays on the projects.

Our next question comes from Nigel Coe from Wolfe Research.

I have a couple of points to clarify, Christian, regarding your comments about compensation for next year. I've always considered normal compensation to be around 175, and it appears we're aiming for 260 this year. It seems like there could be a favorable trend for next year, and I want to confirm that line of thinking. My main question, though, is about the $2 billion in investments. First, I want to emphasize that this figure represents total investments, not incremental investments. Also, it seems like the breakdown would likely be two-thirds capital expenditures and one-third operating expenditures; I would like to verify that. Lastly, could you elaborate on what additional benefits these investments will provide? It seems they are primarily focused on increasing U.S. capacity and overall capacity, but I'm curious if there is anything more.

Sure. I'll start with the compensation aspect related to operating expenses and capital expenditures. On the compensation side, to reiterate, the compensation figure mentioned is projected to be around $230 million for the full year. This figure encompasses both merit and incentive compensation. The historical number you referenced might be slightly higher and primarily reflects incentive compensation, excluding merit. If you separate these components, we believe the incentive portion is currently stable.

Yes. And I would say, look, we are proud of having gone through a year with, let's say, flattish overall growth and have returned to a more normal overall spend on compensation. That was something that was important for us to get to this year. And I think it does set us up well as we go into next year. In terms of the $2 billion, yes, we're going to get into more detail, but I think directionally, you're in the ballpark of that split. And as I said, the majority of the incremental spend is going to be on that CapEx side in the service of margin expansion. To be sure, there is some additional capacity that this helps with. We do believe that we're able to do these things with a net number of rooftops staying relatively flat. I think that's an important concept that we're not going out and building a lot of incremental rooftops without retiring others. So we think we have lots of opportunity for additional efficiency in our existing facilities as well as some greenfield investment as well. But the majority of the OpEx spend in these areas is really more about reprioritizing to the areas of highest return.

Julianne, we'll take one more question.

Certainly. Our last question will come from Steve Tusa from JPMorgan.

It sounds like you guys are super busy, no vacation this summer. So you've earned the IC bump for sure. Lots going on and good execution. Just a quick question on kind of the updated pricing outlook for what you booked this quarter and then what you expect for the fourth quarter and how that will trend into next year?

Yes. So on the pricing side, we would have started the year, I think we did in the Q4, Q1 call, talking about we expected price realization to be around our historical number, about 1%. Obviously, the last couple of quarters, we've had price realization more in the 3% range. I think last quarter, I would have talked about a 1% to 2% for the full year. Now I think it's very comfortable saying that we're going to be at 2% plus for the full year this year, which would include a decent portion that happens in the fourth quarter. Keeping in mind that part of that bump is happening from tariff-based price realization, which is not really high-value price realization because it's simply there to offset some costs.

And then for next year?

For next year, I'm not ready to provide a complete update. However, I can share that aside from the tariff-based price realization, which will be what it will be, we're generally optimistic about our capability to continue to achieve price increases. The organization is actively identifying areas and opportunities for us to pursue this, not only through basic price lists but also by discovering other methods to enhance realization from previous pricing actions.

Okay. Just one last question about the U.S. investments you mentioned. You said you booked a few for 2025 and that there are some for 2026. How close are we to seeing any progress on these? Is it just a matter of calming the headlines around tariffs, or do you seem a bit more cautious about the timing of these developments? It seems like every company is discussing significant pipelines and opportunities. Do you think this could happen in the first half of next year, or if it materializes, will it be more of a second half of next year situation regarding orders?

We have a big funnel, and we think that the orders we receive will be significantly larger related to capacity next year than this year. we haven't calendarized first half versus second half. But in general, what people are doing is they're looking at getting to a certain level of cost certainty with respect to their inputs. And obviously, tariffs are a portion of that. So think about the automotives. They're thinking about what does their demand look like and think about, for instance, the chemical industry and oil and gas, more commodity-oriented, metals, what's their demand looking like. They're also looking at general risk. And so with machine builders wanting to go to their suppliers and get certainty on pricing as they themselves are putting out quotes that need to be firm to their end users for a period of time. So those are kind of one click below the general uncertainty that people are looking for getting additional confidence in. And we're seeing some of those projects coming out. We booked some big ones across multiple industries, and we talked about a few of them, and we expect that to continue in Q4 and into next year. And hopefully, things settle down with respect to tariffs. We've got a tax bill in place, and that helps. That's going to provide some benefits, particularly for small and medium-sized manufacturers as they see things like bonus depreciation helping them. But some of these other areas with tariffs, I think, will accelerate the release of some of these big capacity orders.

And that is just on a percentage of your business, correct? The new capacity percentage, it's like 15% to 20%. That's kind of how you describe that size of that mix when you talk about big new capacity orders?

Yes. I mean, we haven't talked about a specific percentage of capacity, but it's a little bit more than it would have been in the past. And some of that is with the new offerings that we have, things like production logistics and AMRs are largely tied to CapEx. So it's a little bit more than it was in the past, but we're still largely a flow company. And I guess the other thing I would say is that whereas a lot of the new capacity initially was in areas like semiconductor and data centers, now we're seeing many more of those orders across areas that Rockwell has higher share in. So think about life sciences and food and beverage and so on.

Great. That concludes today's call. Thank you for joining.

At this time, you may disconnect. Thank you.