Thank you for holding, and welcome to Rockwell Automation's Quarterly Conference Call. I need to remind everyone 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 Fourth 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, and our call today will reference, non-GAAP measures. 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. I'll make a couple of initial comments before we turn to our fourth quarter results. When we introduced guidance for fiscal year 2025 last November, amid a mixed set of headwinds and tailwinds for growth, much of the discussion centered on additional detail around the cost reduction and margin expansion actions we initiated in 2024. With the top line guidance range that included limited growth, we knew it would be a challenge to both absorb higher costs and expand margins. So with the very busy 12 months of fiscal year '25 in the books, I'm proud of the team's execution as we have returned to top line growth and continued to reduce costs. Rockwell is well positioned for sustained market-leading growth and profitability as we build on this success for fiscal '26 and beyond. We closed the year with another strong quarter of outperformance versus our expectations, including double-digit year-over-year growth in both sales and operating earnings. Our differentiated portfolio, price discipline, and continued focus on productivity all contributed to this great finish to the year. Free cash flow was also very good in the quarter and for the year. As we will discuss, we're taking further steps to streamline the organization and increase efficiency in the service of customer value and expanded margins. Uncertainty remains, but it's clear that countries around the world are more aware than ever of the strategic importance of investing in advanced manufacturing capabilities and capacity. Nowhere is this more apparent than in the U.S., our home market. Let's now turn to our fourth quarter results on Slide 3. Both reported and organic Q4 sales were up double digits versus prior year. While we did have favorable comps from a year-over-year standpoint, Q4 sales grew high single digits sequentially, which was better than we expected. Organic year-over-year sales growth of 13% was led by continued strength in our product businesses. Similar to the last two quarters, CapEx activity and longer cycle businesses remain muted, with customers holding off on larger investments. On our last earnings call, we flagged the potential for Q4 pull-ins into Q3. Based on our analysis of daily orders and sales trends, inventory levels in our channel, and machine builder surveys, pull-in orders were less than expected in Q3 and not evident in Q4. Annual recurring revenue was up 8% in the quarter. While some customers continue to delay discretionary services spending, we did have a number of large software and services wins around the world in Q4. One notable win was with Stanley Electric, a Japanese Tier 1 automotive supplier, who will deploy our cloud-native Plex platform across 25 global sites. We also secured a key cybersecurity win in life sciences, with GSK selecting our Verve platform as their new standard for asset vulnerability management to be deployed across 33 sites over the next five years. In our Intelligent Devices segment, organic sales were up 14% versus prior year and up low double digits sequentially. Strong sequential growth in the quarter was driven by our power control business, where a combination of our existing business and our CUBIC acquisition is helping us win competitive projects around the world. A good example of this was our win with Ferri Systems, a Spanish system integrator, who will be providing our flexible and compact motor control system for Africa's largest desalination plant. I'll share some additional power control wins later on the call. We also had a good quarter in our Clearpath business with double-digit year-over-year growth in our OTTO autonomous mobile robot business. I'm pleased with how this acquisition continues to add new ways to win and expand our customer base. Our AMR business grew double digits in fiscal '25, and we are optimistic about fiscal '26 as we plan for Clearpath to turn profitable in the year. Software & Control organic sales in the quarter grew 30% year-over-year, led by continued momentum in our Logix business, both versus prior year and sequentially. On the software front, Plex and Fiix continue to add new logos as we augment our existing sales force with new go-to-market partners. One of our Plex software wins in Q4 was with THG, a U.K.-based global e-commerce leader in beauty and nutrition. This customer chose our cloud-native MES and quality management solution to eliminate manual processes and drive further operational efficiency. Organic sales in Lifecycle Services were down 4% versus prior year, slightly below our expectations. Book-to-bill in this segment was 0.9, consistent with our historical Q4 seasonality. We continue to see project delays across both our core business and Sensia as customers wait for more clarity and stability around the impact of trade and policy on their operations. Regarding our Sensia joint venture with SLB, following a strategic review, both parent companies have decided to pursue an orderly dissolution. Rockwell will assume 100% ownership of the process automation business that we initially contributed to the joint venture, and SLB will again fully own the parts that they contributed. After the expected close of the transaction in the first half of fiscal '26, Rockwell will realize lower revenue but higher operating margin going forward due to the deconsolidation. Rockwell's resulting sales into the oil and gas vertical will be about 10%, but with a simplified go-to-market motion. That go-to-market approach continues to include SLB as an important partner with deeper relationships than the two companies had six years ago. I want to be clear that Sensia did not meet our long-term expectations. That is why SLB and Rockwell have jointly agreed to make this change. However, the changes we are making demonstrate our continued commitment to the oil and gas market, and we are well positioned to grow in this space. Our portfolio has expanded since the JV was launched, with new process I/O and process safety capabilities from Logix, an industry-leading portfolio of cloud-native software applications and deeper domain expertise. Importantly, we have taken this step in order to grow in this vertical with improved profitability going forward. Christian will add more detail on the financial impact in the quarter and the benefits going forward later on the call. Turning back to our fourth quarter. Rockwell's overall segment margin of 22.5% and adjusted EPS of $3.34 were well above our expectations, driven by higher volume and strong productivity. We ended this fiscal year with over $325 million of structural productivity savings, exceeding our original target of $250 million. Similar to last quarter, tariffs did not have a meaningful impact on our results in Q4. Christian will talk more about tariffs and the expected fiscal '26 impact in a few moments. Moving to Slide 4 to review key highlights of our Q4 industry performance. Sales in Discrete were up 20% year-over-year with strong growth in e-commerce and warehouse automation and good performance in automotive. Automotive sales exceeded our expectations in the quarter with low double-digit growth versus prior year. The industry continues to shift from an EV focus to a mix of traditional ICE, hybrid, and electric vehicle offerings. Rockwell has good technical solutions and expertise for all of these types of vehicles. E-commerce and warehouse automation delivered another standout quarter with sales growing over 70% year-over-year. This quarter, Rockwell secured a significant European win with another global logistics and parcel-handling company. The customer selected our FactoryTalk Optix platform and digital services to digitize and expand operations across 28 sorting facilities. While our data center business is still relatively small, we continue to see strong double-digit growth with multiple wins across the globe. This quarter, Rockwell won a project with Alternative Heat Ltd. to supply modular cooling panels for large data centers in Europe. The rise of AI data centers is driving demand for faster deployment, advanced cooling solutions, and secure industrial-grade control platforms. Our Logix control platform and modular power distribution technology are well positioned to meet these needs. We'll share more about our differentiation and growth in the data center space at our Investor Day later this month. Turning to our Hybrid industries. We saw double-digit growth across food and beverage, home and personal care, and life sciences. In food and beverage, our customers are prioritizing productivity and operational efficiency in existing facilities. The industry is going through a period of consolidation, restructuring, and evolving consumer preferences. While this dynamic might delay some of the larger CapEx investments near term, we continue to build a strong pipeline of new capacity projects, both globally and in the U.S. In the quarter, Electrolit Manufacturing selected Rockwell as a key automation and digital partner for their state-of-the-art beverage blending and bottling facility in Waco, Texas. This is Electrolit's first greenfield in the U.S. Sales growth in our life sciences vertical was also strong in Q4 and exceeded our expectations. We continue to see growth in our software and cybersecurity services across the product life cycle. We're also seeing increased automation adoption in the medical device segment. One of the important wins here this quarter was with Haumiller, where our Independent Cart Technology is helping accelerate and optimize production of a high-speed auto injector line for the obesity drug market. Moving to Process, sales in this segment grew 10% with year-over-year growth across all industries. Similar to last quarter, Process customers are focusing on driving efficiency and profitability in their existing facilities as they continue to grapple with weaker demand and low commodity prices. Rockwell's technology is well suited for both greenfield and brownfield investments as demonstrated by several large wins in the quarter in energy, mining, and metals. A good example of this was our win with Vale Base Metals, where our arc-resistant power control systems are modernizing their Sudbury mill to significantly enhance safety and operational efficiency. This win positions Rockwell as a key automation partner in one of Canada's most critical mining operations. Turning to Slide 5 and our Q4 organic regional sales. North America had a strong finish to the year and was once again our best-performing region in the quarter. We expect North America to continue to be our strongest region in fiscal '26. Last quarter, we announced a $2 billion investment over the next five years to modernize infrastructure, grow talent, and enhance digital capabilities. These initiatives are now underway and will unlock future growth and margin expansion with the U.S. as the primary beneficiary. We'll share more in the months ahead. Let's move to Slide 6 for key highlights of full year fiscal 2025. Our reported and organic sales were up about 1% versus prior year. Total ARR grew 8% with solid performance in our Software as a Service business. We ended the year with a segment margin of 20.4% and adjusted EPS of $10.53. The improvement of over 100 basis points in year-over-year segment margin was driven by our cost reduction and margin expansion actions and strong price discipline. Free cash flow conversion of 114% exceeded our expectations for the year. I'm proud of our execution to get back above 100% free cash flow conversion, which remains an important part of our financial framework. Let's now move to Slide 7 to review our fiscal 2026 outlook. As we look to fiscal '26, we are confident in our ability to gain share and expand margins. We are less certain about the overall macro and geopolitical environment as well as the timing of the CapEx investment recovery in our key verticals. Increased stability in trade policy will help unlock additional capital spending. We expect our reported sales growth for the year to be in the 3% to 7% range. The midpoint of our guide assumes a sequential sales decline in Q1, which is typical, followed by gradual sequential improvement in the subsequent quarters. Christian will provide more detail on this and the expected impact from price and tariffs in his section. Annual recurring revenue is slated to grow high single digits next year. We expect our segment margin to expand by over 100 basis points, and our adjusted EPS is projected to be $11.70 at the midpoint. We expect free cash flow conversion of 100% in fiscal year '26. Before I turn it over to Christian, I want to reiterate how proud I am of the execution of the team in the quarter and throughout the year. To be sure, there remain plenty of opportunities for continued improvement, and we are taking action to further our progress throughout the coming year and beyond. As we'll discuss in less than two weeks at Investor Day, keys to execution include strengthening a high-performance culture, accelerating top line growth, expanding margin, and continuing our progress in operational excellence. And these are the elements of the Rockwell operating model. And with that, I'll turn it over to Christian.

Thank you, Blake, and good morning, everyone. Before I get into our strong fourth quarter results, I want to spend a few minutes highlighting some of our onetime items unique to Q4, so you understand how they flow through the P&L and where adjustments were made. At a high level, all these changes are outlined on Slide 8. For additional financial details, please also refer to Slides 21 and 22. First, starting in Q4, we're introducing a new engineering and development expense line in our statement of operations. This aligns with the SEC's expanded segment disclosure rules and enhances visibility into key metrics that inform management decisions, particularly total innovation spend. Engineering and development includes what you typically think of as R&D, which has been about 6% of sales historically, and our sustaining engineering spend, which maintains existing technology and has been about 2% of sales. Reclassifying these costs from cost of sales to operating expenses increases gross margin by about 8 points with no impact to the total P&L. This change is applied consistently across historical periods, as shown in the Q4 earnings slide deck appendix, Page 21. Importantly, this move improves visibility into Rockwell's total development spend, aligns our reporting with industrial and tech peers and provides a more meaningful view of gross margin performance. Second, we're making a change to how we treat certain costs related to our legacy asbestos exposure, which is unrelated to our ongoing operations. Historically, we expensed the defense cost for these claims as they were incurred. In Q4, we changed our accounting policy to a full horizon accrual for defense costs, consistent with how we account for indemnity. All told, inclusive of the indemnity and the defense cost accrual update, the result was a onetime pretax charge of $136 million or $0.91 per share in the fourth quarter. This is the accrual portion of the changes. Because these costs are not tied to current operations, we are also updating our definition of adjusted income and adjusted EPS to exclude legacy asbestos and environmental charges. In Q4, this change excluded $141 million in pretax charges or $0.94 per share from adjusted earnings. That includes the $136 million accrual as well as $5 million of normal asbestos and environmental spend we incurred in the fourth quarter. The EPS impact is $0.91 from the accrual and $0.03 from the normal spend, both now excluded. For full year fiscal 2025, the definition change increased adjusted EPS by $1.03, with $0.91 from the Q4 accrual update and $0.12 from excluding legacy asbestos and environmental costs that we incurred for the full year. Without the definition change to adjusted EPS and excluding other onetime items in the quarter, Q4 adjusted earnings would have grown 34% compared to the 32% under the new definition. For the full year, EPS growth was unchanged under the new definition. When compared to our previous guide, the Q4 change, excluding onetimes, was a net benefit of $0.03. For the full year, the net benefit was $0.12. Moving to the third item on the slide, we recorded an impairment in our Sensia business following the decision to dissolve the JV, which Blake discussed. The net result is a noncash impairment charge of $110 million or $0.97 per share, net of tax and the NCI adjustment. For reference, the approximate annualized impact from the planned dissolution will be a $250 million revenue reduction and virtually no impact on operating earnings. The approximate margin benefit to Rockwell on an annualized basis will be an increase of about 50 basis points. And finally, in Q4, we made a voluntary $70 million contribution to our U.S. pension plan. As Blake mentioned earlier, we delivered 114% free cash flow conversion for the year, inclusive of that contribution. Excluding the contribution, our conversion was 119%, with free cash flow reaching a record $1.4 billion and reflective of strong operational execution and solid performance across the P&L. All financials reported in our earnings release, conference call presentation and in our 10-K, which will be filed next week, reflect these changes. Turning to our financial results. Let's go on to Slide 9, fourth quarter key financial information. Fourth quarter reported sales were up 14% versus prior year, exceeding our expectations and closing 2025 on a strong note. About 1 point of growth came from currency. About 4 points of our organic growth came from price with about 1 point of that coming from tariff-based pricing. Price/cost was favorable in the quarter. Company gross margins under our new reporting methodology expanded 290 basis points year-over-year, and segment operating margin increased 240 basis points. While tariffs had a neutral impact on EPS, they did cause a slight margin dilution in the quarter. Adjusted EPS of $3.34 was above our expectations, primarily due to outperformance on revenue, better segment mix, and favorable price. The adjusted effective tax rate for the fourth quarter was about 18%, up from about 15% last year, driven by higher discrete benefits in the prior year. For the full year fiscal 2025, our adjusted ETR was 17%. Free cash flow in Q4 was $405 million and was $38 million higher than the prior year. Slide 10 provides the sales and margin performance overview of our three operating segments. Intelligent Devices margin of 19.8% decreased 90 basis points year-over-year due to a tough comparison with last year's Clearpath earnout reversal and higher compensation this year, resulting in incrementals in the teens. Excluding the earnout reversal, incrementals would have been about 30%. Software & Control margin of 31.2% was up 880 basis points versus prior year, driven by outstanding 30% organic sales growth and good price realization. The segment saw year-over-year incrementals in the high 50s. Lifecycle Services margin of 17.5% was up 30 basis points year-over-year. A mid-single-digit organic sales decline and higher comp would normally have driven segment margin lower year-over-year. However, the team continued to deliver strong project execution and higher productivity. Overall, for Rockwell, the incremental margin on the year-over-year sales growth was about 40% in Q4. I want to take a moment to point out the sequential movement we saw in each of our segments. Intelligent Devices had sequential incrementals in the high 20s on low double-digit sales growth, reflecting seasonal shipments of configure to order that created a sequential negative mix. Software & Control sequential incrementals were in the low 20s with modest sequential sales growth after a very strong Q3. Lifecycle Services saw similar sequential dollar growth in both sales and segment earnings, yielding 100% conversion on strong project execution. Overall, for Rockwell, the incremental margin on the sequential sales growth was in the high 30s. Let's move to the next Slide 11 for the adjusted EPS walk from Q4 fiscal 2024 to Q4 fiscal 2025. Year-over-year, core performance had a $1.45 impact in Q4. Software & Control was the primary driver of both sales and earnings growth in the quarter. The largest driver in our core was volume, followed by structural productivity and price. Compensation had a $0.45 impact in Q4 compared to our prior expectation of about $0.30 of impact, driven by our outperformance in the quarter. Full year compensation expense, which includes merit and bonus ended the year at $255 million. As I mentioned earlier, we are lapping the prior year benefit from a Clearpath earnout reversal this quarter. With some other onetime items, this resulted in a $0.15 headwind. Slide 12 provides full year 2025 key financial information. Reported and organic sales increased 1% to $8.3 billion, 200 basis points better than our original guidance midpoint for the year. Currency was neutral. Full year segment margin of 20.4% increased 110 basis points from last year and was 140 basis points better than our original guide. The increase was due to our margin expansion and cost reduction actions, price and favorable mix. This was partially offset by higher compensation and unfavorable net currency. Adjusted EPS of $10.53 was up 7% and well over $1 better than the midpoint of our initial guide for the year. For the year, we deployed about $1 billion of capital towards dividends and share repurchases, while we continue to pause on our inorganic investments. Our capital structure and liquidity remain strong. Moving on to the next slide, 13, to discuss our guidance for the full year. Our organic sales growth guidance is 2% to 6% or 4% at the midpoint. We expect about 100 basis points of currency benefit, so our reported revenue growth is expected to be 5% at the midpoint. Our guidance does not include the anticipated impact from the Sensia dissolution. Once the JV is dissolved, we'll update our FY '26 guide for the remainder of the year. As we mentioned, this will reduce reported revenue and increase margin percentage but have no significant impact on EPS. Our segment operating margin guidance is 21.5%, more than 100 basis points higher than last year. Our adjusted EPS guidance is a range of $11.20 to $12.20 or $11.70 at the midpoint. We expect a couple of points of price for fiscal 2026, 1% on underlying price and 1% from tariff price. From this growth, we expect our FY '26 incremental margin to exceed 40%, inclusive of tariff-based pricing. Looking ahead to 2026 capital expenditures, we plan to increase investments in plant and digital infrastructure with targeted CapEx spending of about 3% of sales. In terms of the calendarization, as Blake mentioned, we expect a sequential decline in Q1, followed by a gradual sequential improvement in subsequent quarters. This is true for both sales and margins as we progress through the year. Now let me share some additional color on our first quarter. In Q1, we expect overall company sales to be down low double digits sequentially, given normal seasonality and the continued uncertainty and slower CapEx activity. With that said, we do expect good year-over-year growth in both sales and margins with total company segment margins in the high teen range. This translates to more than 25% year-over-year growth for adjusted EPS. From a business segment standpoint, Intelligent Devices sales in Q1 are expected to be down low double digits sequentially due to ongoing softness in our configure-to-order shipments. As a result, we expect Intelligent Devices segment margins to be in the mid- to high teens. Software & Control margin is expected to be in the high 20s in the first quarter on sequential sales declines in the high single digits. Lifecycle Services sales are expected to be down high single digits sequentially, driven by a combination of both normal seasonality and continued CapEx project delays. We expect segment margin for Lifecycle Services in the low double digits. For the full year, we expect segment sales and margin as follows: Intelligent Devices reported sales growth is expected to be in the mid- to high single digits. We expect margins in the high teens to low 20s or 150 to 200 basis points higher year-over-year, driven by continued progress on productivity. Software & Control reported sales growth is expected to be mid-single digits. We expect margins in the low 30s, up slightly year-over-year and driven by better volume and price. Lifecycle Services reported sales growth is expected to be flattish. We expect margins in the low teens, lower than last year. Let's turn to Slide 14 for our adjusted EPS walk for the full year. Our core is expected to be $1.40 for the year. Included in our core is productivity, which is the term we are using for operationalizing our ongoing focus on cost reduction and margin expansion. FX is expected to be a $0.20 tailwind. We expect our adjusted effective tax rate this year to be 20%, reflecting the implementation of BEPS Pillar Two. The resulting EPS headwind from tax is $0.40. A few additional comments on fiscal 2026 guidance for your models. Corporate and other expense is expected to be around $100 million. Since we are no longer including legacy asbestos and environmental costs in other income, corporate and other expense is about $18 million lower than it was than it otherwise would have been for the year. Net interest expense for fiscal 2026 is expected to be about $120 million. We're assuming average diluted shares outstanding of about 112.7 million shares, and we are targeting approximately $500 million worth of share repurchases during the year. I'd like to thank the global Rockwell team for the outstanding execution that allowed us to exceed our cost reduction and margin expansion targets and company guidance for fiscal '25. This organization is ready to build on this momentum and deliver another strong year. With that, I'll turn it back to Blake for some closing remarks before we start Q&A.

Thanks, Christian. This year's Automation Fair and Investor Day at McCormick Place in Chicago is the best venue to see what's special about Rockwell. 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. We would like to get to as many of you as possible, so please limit yourself to one question and a quick follow up. Julianne, let’s take our first question.

Our first question comes from Scott Davis from Melius Research.

I'm sure you'll have many questions about the guidance, but I'd like to start with Sensia. It seems like it never gained the traction you anticipated, despite the support it received from the top levels in both companies. Can you share the insights on why it didn't succeed?

Yes. Scott, I think for starters, standing up a new entity a few months before COVID kind of descended on the world had a particular impact in energy markets for that period of time. So that created a challenging starting point. I think from an operational standpoint, the scope that Sensia had laid out was broad, which added costs. And while we worked it into a position of operational profitability, we jointly decided that it wasn't going to meet our long-term goals to justify the continued, let's say, complexity of a JV. And so returning the originally contributed businesses added simplification. And I would also say that we're different companies than we were in 2019. We've added considerable technology capabilities, both in terms of control architecture as well as software and digital twins, simulation, which is useful in a lot of these applications. And so we felt it was the right time to simplify and obviously, the increased profitability reflected on the overall company as attractive as well.

It seems that since the adjustment had minimal impact on earnings, the overall profitability of the joint venture was not very strong. Is getting the Process to Discrete margins primarily influenced by volume, or are there issues related to costs, products, or scale? A bit more detail on this would be helpful, and then I'll hand it off.

Yes, absolutely. First, because process applications generally need more engineering work, which is specific to each order, there are more personnel involved. This increases costs, affecting margins compared to just supplying raw products for an application. However, the improvements in margins achieved by Lifecycle Services over the past few years show that it's possible to enhance profitability even in a labor-intensive area. The integration of artificial intelligence and software-defined automation also contributes positively, particularly by utilizing libraries and lowering integration costs through digital twins. The efforts we are making on our products, the specific advancements in Lifecycle Services, and the careful project selection they have undertaken, which significantly contributed to our strong performance in Q4, all indicate that we can continue to achieve growth in process applications, especially in the energy and oil and gas sectors, in a more profitable manner moving forward.

Our next question comes from Andrew Obin from Bank of America.

Impressive growth numbers in Software & Control. Could you give us a sense, and I know you don't give an exact number, but can you give us a sense where the Logix volumes are relative to where we were pre-COVID?

Sure. So Andrew, in the back half of the year, we touched pre-COVID unit volumes for Logix. For the full year fiscal '25, we were still below pre-COVID. And so there's room to run just with the math of that as obviously, the market is expanding. And then, of course, we benefited from good price over that period of time. So in fiscal '26, we do expect Logix unit volumes to get back to those pre-COVID levels and then obviously continue on from there with market growth as well as market share.

Excellent. And I may be wrong on the timing, but I believe in '26, you're going to start rolling out new Logix products. And I'm sure you will talk about it at the Analyst Day. But does that impact sort of margin patterns seasonality in the year? Because I think there is a big product upgrade ahead of you over the next couple of years.

Yes. Andrew, you're right. And actually, we've already started. So we released new Logix L9 processor ahead of schedule. We're already taking orders for it. It provides a higher performance than any other Logix processors that we've had. And that's just one example. Process I/O is off to a good start where we've released a new family of Process I/O. And then what we've been talking about a lot is software-defined automation, which includes Logix and software form, and you'll be able to see that in a couple of weeks when you're in Chicago. So a lot of vitality in that business with more to come. In terms of the impact, we don't typically see a big swell of orders when we release a new product. It's more of a contribution to the steady sequential growth of the product family. But I would tell you that orders are off to an impressive start for those new products.

Our next question comes from Andy Kaplowitz from Citigroup.

I think you said previously that book-to-bill is now running close to 1x. So I assume that was the case in Q4. And would you expect that to continue to be the case moving forward? And then I know today, you said bigger CapEx projects are still getting delayed. But are you any more confident that you'll see some of these larger orders move forward in '26 or can you sustain a book-to-bill around 1x without a big improvement in these projects?

Sure. The product business orders and shipments are closely aligned, and we anticipate this will continue. Distributors are reporting that orders are converting to our orders at typical rates, and deliveries are proceeding smoothly. We do not foresee any changes in this for the year. We will keep tracking the book-to-bill in Lifecycle Services, although there are some offsets due to longer lead times in that sector. Regarding capital expenditures this year, we are still observing delays in projects, particularly those requiring higher levels of approval within our customers' organizations. Some projects are progressing, as mentioned earlier, and we expect to see gradual improvement throughout the year. However, our guidance does not assume significant enhancements in the capital environment, which could influence us to lean towards the upper end of our projections if capital releases accelerate.

That's helpful. And then just looking at your segment margin forecast, as you said, you're forecasting over 40% incremental margin, which could arguably be described as a more normal year for Rockwell where you're layering in restructuring savings as productivity. And I think incentive comp is more normalized as well versus FY '25. I think, Christian, you mentioned you're still absorbing some tariff headwinds. So does that mean that that's the kind of incremental margin we can count on from Rockwell moving forward? Maybe just a little bit more on the puts and takes would be helpful.

Sure. Andy, Christian will have some more to say on this. But at a high level, while we are proud of good incremental conversion expected in the year due to all the factors that you said, including normalized run rate for compensation, continuing aggressive productivity, and so on, we're not ready to change our guidance for incremental for a long-term framework.

Yes. And so just to build off of that, the long-term framework has us at a 35% incremental number. Again, that's kind of through the cycle, mid-cycle to mid-cycle. You're going to see some variability from quarter to quarter, obviously, and also from year to year periodically. So as we're looking at the momentum we're taking into fiscal '26, that 40% felt like an appropriate number. It's not a heroic change from the 35%, but we are seeing just a little bit better opportunity in this coming year.

Our next question comes from Julian Mitchell from Barclays.

I wanted to start on the top line guidance. So you're just finishing the year with very strong growth. You're guiding for sort of mid-single digits at the midpoint for the year ahead and starting off, I suppose, with high single digit year-on-year in the first quarter. So I just wanted to try and understand when we're thinking about that revenue guide for the balance of the year, was it sort of constructed with a view around sort of normal seasonality or just very tough comps in the second half? And anything happening to price year-on-year as we move through fiscal '26?

Yes. So a couple of comments. And again, I think Christian will have more detail. As we look across the end markets, in general, we're looking at mid-single-digit growth for Discrete and Hybrid, low single-digit growth for Process. We had some outliers there. Semiconductor flattish in Discrete, warehouse, e-commerce up around 10%. And then in Hybrid, good results expected from the part of the business, food and beverage, life sciences and so on. But CapEx continues to be suppressed in terms of spending, and so that influences the low single-digit expectation in process.

Yes. As we plan for the year, Julian, you're correct that we indicated in our guidance our expectations for the first quarter. We anticipate high single-digit growth year-over-year in that quarter, although the comparisons will become more challenging as the year progresses. We expect sequential revenue growth from the first to the second quarter and continuing through the rest of the year. However, if we focus on year-over-year growth rates throughout the year, those will likely show a declining trend, primarily due to tough comparisons.

And just on that pricing, I think it was 4 points in the fourth quarter. Does that sort of assume to be de minimis tailwind exiting this new fiscal year?

Yes. For fiscal '26, we are projecting a 1% underlying price increase and a 1% tariff-based price increase in our guidance. Price adjustments aren't straightforward due to market and competitive dynamics, so we're focusing on maintaining a balanced strategy. Tariff-based pricing is essential for preserving our earnings per share neutrality. At the same time, we want to achieve that underlying price increase. Tariffs have generally aided our price realization throughout fiscal '25, which is positive. As we move into fiscal '26, maintaining that balanced approach remains critical, and we are confident in our ability to achieve the 1% underlying price increase and hope to improve execution.

And then just a quick follow-up on margins. So you had 110 bps of margin expansion. The year just finished off volumes that were down slightly in the year and a big comp headwind. The year ahead, volumes are up low single digits in the guide, no big comp headwind and the same margin expansion. Is your point there that you're just using that sort of placeholder for now of 40% that there isn't some big hike in the specific investment spend or something like that?

Yes, there isn't a significant increase in investment spending. I wouldn't necessarily describe it as a placeholder. We saw substantial progress in fiscal '25 regarding cost reduction and margin enhancement, which Blake mentioned. That $325 million is a major milestone for our organization. We have more opportunities as we move into fiscal '26, which we will discuss in more detail during Investor Day. Part of that is included in our guidance. Meanwhile, we want to ensure we continue to experience strong profitability growth, and aiming for that 40% target appears achievable.

Our next question comes from Chris Snyder from Morgan Stanley.

It certainly seems like demand is getting better. If you look at the order rates in the above $2 billion the last two or three quarters. Last year, they were below $2 billion. Do you think that this is cycle momentum? Do you think this is a reshoring tailwind investment coming through? Do you think you guys are just gaining share versus the market because when you look broadly at the industrial economy or even your competitors in Discrete, we're not really seeing this level of acceleration or momentum broadly.

Sure. Well, Chris, I think there's pieces of each of the factors that you mentioned. First of all, the U.S. is probably the healthiest market around the world, and that's a home field for us with high share. So we're going to get a lot of that benefit from investment. And we'll talk more about this in a couple of weeks at Investor Day, but we did see higher orders due to capacity expansion in the U.S. this year than last year, and we expect to see higher orders from that activity in fiscal year '26. The demand, particularly for the product side of the business, which is still more than half of our business is good. Optimization of brownfields, adding software into facilities that have a base level of automation and looking for more efficiency with information management software. We have a portfolio that's second to none. We do think that we're taking share there. So I think it's all those pieces that put us in a favorable position.

And then I wanted to follow up around the medium-term margin target, which you guys have out there of 23.5%. You just did a 22.5% and I know Q4 is the seasonal peak, but the quarter did have headwinds from FX and tariffs. I imagine there's more cost-out opportunity next year given that you guys exited pretty strong on that front. And then another 50 bps, I guess, of margin uplift from Sensia JV going away. It just feels like we're getting awfully close to that 23.5% target. I guess in that context, are you rethinking that? And do you think there's meaningful upside to that prior target?

Christian and I are both smiling because it is something that we're proud of is that progress. But we are laser-focused on attaining the current targets that we've set out there. As we've talked about, we've got plans already underway to get us to and through that number, but we're focused on hitting it first.

Yes, we want to continue making progress on that. Blake's response is very important to us. We are dedicating a lot of time and energy to ensure we have a lot of momentum as we move forward. However, we are not ready to set a new target yet. Let's focus on achieving the current one first.

Our next question comes from Steve Tusa from JPMorgan.

Congrats on the execution. Just on inflation, what level of inflation did you guys see in the quarter?

Inflation was relatively modest. Keep in mind, we have a lot of cost reduction and margin expansion actions that are underway inside the organization. So it's a good countermeasure that we've been taking all year long. We expect that to continue to be an opportunity for us to work to offset inflation as we go into '26.

Okay. And then the 1% tariff you mentioned, was that offset during the quarter or were you ahead of the tariffs in the quarter?

Yes. On the EPS line, it was neutral for us in the quarter. That is the tariff-based price that we achieved. And the tariff-based price that we achieved in the fourth quarter was simply to offset the tariff-based costs.

Okay. That makes sense. And going forward, for next year, do you still expect inflation to be kind of minimal and then maybe a little bit ahead on the tariff stuff?

Yes, we expect inflation to remain relatively low. There is nothing significant out there that we feel needs to be highlighted. Regarding tariff-based pricing and costs, we anticipate that it will remain neutral for our earnings per share. This is very important to us. We are not utilizing tariffs as a chance to increase our margins or to enhance profits. Instead, we are using tariff-based pricing solely to cover the costs we are incurring.

Okay. One last quick question. You didn't mention orders this quarter. Last quarter, the book-to-bill was around 1. I know there's some seasonality involved. What was the book-to-bill for this quarter?

Yes, book-to-bill still within that range of around 1 that we have been talking about with product orders right on top of shipments.

Your next question comes from Nigel Coe from Wolfe Research.

Christian, I want to revisit the incremental margin of 40%. It seems the comp came in at 2.60% this year. You've previously mentioned that 2.25% is the appropriate run rate. Is that still accurate? Additionally, we anticipated some cost wraparound from 2025 into 2026, estimating it at around $50 million to $75 million. Is that the correct calculation?

Yes. The incremental compensation I mentioned in my prepared comments was $255 million, which is in line with what you're thinking. Moving forward to 2026, compensation has generally normalized, so you shouldn't expect to see it represented as a specific bar chart in our financial discussions. It will be integrated into our core strategy along with productivity, ongoing cost reduction, and margin expansion. We have effective strategies in place to focus on margin expansion across the organization, utilizing all available resources, including pricing and cost management. I feel confident in our efforts to work towards achieving that 40% target.

And is the math on the cost wraparound in the right zone as well?

Yes, the $100 million serves as a solid baseline. You're correct that there are a few factors contributing to the changes. One factor is the removal of asbestos and environmental concerns. Another key aspect driving the next stage of cost reduction is related to the implementation costs associated with our cost reduction and margin expansion initiatives that we incurred in fiscal '25. Much of that is already incorporated into our current base and is being influenced by various segments. However, many of those execution costs are also expected to decrease.

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

At this time, you may disconnect. Thank you.