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. Later in the call, we will open up the lines for questions. If you have a question at that time, please press star 1. 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. Thank you for joining us for Rockwell Automation's second quarter fiscal 2024 earnings release conference call. With me today is Blake Moret, our Chairman and CEO, and Nick Gangestad, 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. 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 second quarter results on slide 3, I'll make some initial comments. At a high level, our performance in Q2 was good, but I am not happy with the reduced guidance for the full year. The impact of high inventory levels at machine builders is larger than we expected. Orders are still expected to return to year-over-year growth in Q3 and continue to increase during the year, but the slower ramp is impacting shipments for the second half. Consequently, here's what we are doing. We are accelerating actions to bring costs in line with the revised outlook on current-year orders, aligned with the more comprehensive program to expand margins introduced during our Investor Day in November. We will save $100 million in the second half of this year from accelerated actions being taken now, creating a beneficial starting point for fiscal year 2025. We will see incremental savings of $120 million next year from these actions alone, plus a larger amount of additional savings from the more comprehensive program targeting sourcing, manufacturing, and SG&A. We will provide a more detailed view of this program on our next earnings call. We are improving our forecasting with new perspectives on the team, processes that include a deeper analysis of channel information, and better decision support technology. I'm optimistic about our position when we exit fiscal year 2024, regardless of next year's growth, for several reasons. Rockwell has built an unmatched portfolio to meet the world's growing need for smart manufacturing. Our home market, North America, is expected to grow faster than the worldwide PAM. We are winning major new business today with both our traditional offerings and new sources of value across Discrete, Hybrid, and Process industries. As we couple this with our focus on margin expansion through cost discipline, operational excellence, and organic growth, we will achieve the longer-range targets introduced in November and create significant shareholder value. Turning to the quarter, as we indicate on slide 3, we return to good operational performance in the second quarter, with both Organic sales and Adjusted EPS above our expectations. Sales of Products, configured-to-order offerings, Software, and Lifecycle Services were all at or above our forecast. In Products, we converted incoming orders at a much higher level than in Q1, and we now have a sufficient mix of safety stock in place to convert orders at the current level or higher through the balance of the fiscal year. We are essentially back to booking and billing product orders in the quarter they are received at pre-pandemic conversion rates. Our orders were up low double digits sequentially, with continued recovery across all business segments and regions. North America had the highest sequential increase in the quarter. Year-over-year, total sales were down 6.5% in the quarter based on an organic sales decline of 8% and a 0.5% of acquisition growth. In our Intelligent Devices segment, organic sales declined about 7.5% year-over-year. I'm pleased with our execution to meet our shipping commitments and build safety stock in the quarter for these products. We also continue to see strong performance from our recent Clearpath acquisition, with sales of autonomous mobile robots contributing almost 2.5 points to ITD growth in the quarter. One notable Clearpath win this quarter was with The Hershey Company. The Hershey Company continues to advance digital capabilities to enhance agility and efficiency across its operations, including supply chain and manufacturing processes. As part of their efforts, Hershey has selected automation technology to improve productivity in both fulfillment and manufacturing operations. Q2 margin performance for Clearpath was also better than expected. Software and Control organic sales were down 23% versus prior year, largely as we expected. As you know, this segment is significantly impacted by difficult year-over-year comparables in our Logix business. In Q2 of last year, we had 42% growth in software and control. There are particularly high levels of these products in inventory at our machine builders. Despite this temporary correction, we are gaining Logix share and winning new business across our software and hardware offerings. I'm proud of the vitality of our product development here, demonstrated by recent organic product launches and partnerships with Microsoft and NVIDIA that are focused on specific customer use cases, especially those that will benefit from simulation and simplification using artificial intelligence. These partners recognize that machines and manufacturing processes represent an enormous, largely untapped source of data, and petabytes of this data flow through our controllers. They also know we have the manufacturing domain expertise to select the best use cases for their technology. Lifecycle Services organic sales grew over 12% year-over-year and continue to outperform our expectations, driven by strong process and markets. Book-to-bill in this segment was 1.07, led by good order growth in our solutions and Sensia businesses. Our Sensia JV saw another quarter of over 25% year-over-year sales growth in Q2. The Lifecycle Services segment also continues to contribute strong growth from our high-value services, including cybersecurity, which saw orders growth of almost 50% in the quarter. We are making substantial progress to expand Lifecycle Services margin. We saw a 16% margin this quarter and were not done working on the performance of this business segment. Total ARR was up 20% again this quarter. We continue to see strong, profitable, recurring growth from both high-value services and software. Rockwell's segment margin was 19%. This would have been about 17% without the reversal of the bonus accrual we recorded in the quarter. Adjusted EPS of $2.50 was above our expectations, even after adjusting for the reversal of the bonus accrual. Nick will cover this in more detail later on the call. Let's now turn to slide 4 to review key highlights of our Q2 industry segment performance. Sales in our Discrete industries were down high teens versus prior year. The impact of high product inventory levels in the channel is most pronounced in our Discrete and Hybrid industry segments. Automotive, e-commerce, and other warehouse automation sales were all impacted. Within Discrete, automotive sales were down 20%. Much of this year-over-year weakness is driven by excess product inventory in our channel. However, we are also starting to see some impact on our fiscal 2024 sales as customers take time to reevaluate the timing of their EV investments. While we are not seeing any EV or battery project cancellations, we are seeing push-outs of certain production start dates. As we've mentioned, given our strong installed base and expanded portfolio, Rockwell is well-positioned with automotive customers, whether they are investing in electric vehicles or adding more hybrid options in the near term. They are all interested in increasing efficiency. In addition to our traditional sources of value, Clearpath autonomous mobile robots helped us secure over half a dozen wins with major brand owners and tier-one suppliers this quarter. Semiconductor sales declined 25% year-over-year with continued geopolitical pressures and a temporary oversupply of legacy chips weighing on semi-customers' CapEx investments. Our sales in e-commerce and warehouse automation were down high teens this quarter. We did see an improvement in sequential growth and increased our full-year sales outlook. We're rebuilding a strong warehouse pipeline with traditional retailers and global shipping and logistics customers. Turning to our hybrid sales, this industry segment was down mid-teens year-over-year. The weakness in this industry segment was led by food and beverage and home and personal care. Food and beverage sales declined 20% in the quarter, driven by slower activity at our packaging OEMs who are still working through their excess inventory. There are also some signs of slower end-user CapEx spend. Food and beverage end-users are continuing to fund capacity expansion in emerging markets like India and Southeast Asia and modernization and resilience projects across their existing facilities. We had wins in the quarter, including the AMR project I mentioned earlier and cybersecurity projects at new customers. Life sciences sales were down high single digits. Results in the quarter were mainly driven by project delays, especially in China. Outside of that region, we continue to expand our installed base with newer software and hardware offerings. One example of new value in this vertical was an important Q2 order with an innovative contract manufacturer, National Resilience, who selected Clearpath to provide a comprehensive AMR solution as they bring cell and gene therapies to market. Moving to process, our sales here grew high single digits year-over-year, supported by continued strength in oil and gas and mining. Oil and gas sales were up over 20% this quarter with continued momentum in energy transition projects. In Q2, we secured multiple decarbonization projects, including applications for carbon capture, storage, and hydrogen. Let's turn to slide 5 in our Q2 organic regional sales. The Americas continue to be our strongest region this year, with Latin America growing 8% versus prior year and North America organic sales down about 4% in the quarter. EMEA sales decreased 19% due to high machine builder inventory in Germany and Italy, particularly in consumer packaged goods. Asia-Pacific sales declined 17% in the quarter, with sales in China down almost 30% versus prior year. We expect a combination of weaker market conditions and slower distributor destocking to continue to impact our China performance through the balance of this fiscal year. Moving to slide 6 for our fiscal 2024 outlook. As I mentioned at an investor conference in March, while orders continue to increase sequentially from the trough in Q4 of last fiscal year, we have not yet seen the acceleration we expect once distributors and machine builders work through their excess inventory. The result is that some of the demand they are seeing does not translate to an equal amount of orders placed on Rockwell. I also said that if the pace of orders continued on its current trajectory, we would expect our full-year 2024 financial results to track closer to the low end of both our organic growth and EPS range. Since then, we've seen lower-than-expected order activity. While distributors and machine builders are continuing to work through their excess inventory, we have underestimated the amount of overstock at our machine builders. Based on information received directly from our largest machine builders, our downward revision is based largely on the size of their inventory and the expected pace of the reduction, resulting in a slower ramp of orders in the fiscal year. Again, we do expect to return to year-over-year growth in orders for the third quarter, and our updated forecast still implies sequential order growth in Q3 and Q4. We believe we are taking share in our major product lines globally and in the U.S. North America is our strongest market, and we are starting to see an increased order impact from customer mega projects as the year progresses. We now expect our full-year orders to be down low single digits versus prior year. Based on our performance to date and the lower-than-expected order ramp, we are revising our fiscal 2024 sales guidance range, with organic sales projected to decline 7% at the midpoint, and we continue to expect acquisitions to contribute a 0.5% of growth. ARR is still expected to grow about 15%. Segment margin of 20% is now expected to decline versus prior year, which still implies an increase in the second half, and specifically in fiscal Q4, driven by higher volume and the accelerated cost-down actions I mentioned earlier. Nick will share additional detail in his section. Adjusted EPS is slated to decrease 13% year-over-year at the midpoint. We are increasing planned share repurchases to roughly double our original plan for the year, and we expect free cash flow conversion of 80%. This is a reduction from our prior guide, and Nick will cover this in more detail later. The reduced guide for the fiscal year only strengthens our commitment to building a strong foundation for future growth and profitability. The company-wide program to comprehensively take cost down of our products and operations will positively impact our results next year. Savings will be used to expand margins and reinvest to drive future growth. We will provide additional detail no later than the Q3 earnings call. Our intention is to manage our business segments for consistent, forecastable performance. You've also seen the announcement of Nick's upcoming retirement. A search has been underway, and we expect to announce a new CFO in the coming months. Nick will be fully engaged in the transition to his successor, and he'll now provide more detail on our Q2 performance and financial outlook for fiscal 2024. Nick? Thank you, Blake, and good morning, everyone. Although my family and I are excited about what comes next in retirement, my continued focus is on delivering our plans for this year and ensuring a smooth, seamless transition to a new CFO. I'll start on slide 7, second quarter key financial information. Second quarter, reported sales were down 6.6% compared to last year. Q2 organic sales were down 8.1%, and acquisitions contributed 140 basis points to total growth. Currency translation increased sales by 10 basis points, and about 150 basis points of our organic growth came from price, in line with our projections. Segment operating margin was 19% compared to 21.3% a year ago. This 230 basis point decrease reflects lower sales volume, partially offset by lower incentive compensation. Adjusted EPS of $2.50 was higher than expectations. Given our lowered outlook for fiscal 2024, we did not accrue any bonus expense in Q2, and we reversed the prior quarter bonus accrual. This resulted in a total Adjusted EPS benefit of approximately $0.30 in the quarter. Even without the bonus impact, our Q2 Adjusted EPS was ahead of our expectation due to better-than-expected conversion of incoming orders into sales. I'll cover a year-over-year Adjusted EPS bridge on a later slide. Adjusted effective tax rate for the second quarter was 14.8%, below the prior year rate. Free cash flow was $69 million compared to $156 million in the prior year. Our lower year-over-year free cash flow generation in the quarter was driven by lower pre-tax income and higher tax payments, partially offset by decreases in working capital. The increased tax payments relate to our gain on our sale of PTC shares in fiscal year 2023 and our payments on the 2018 TCJA transition tax. One additional item not shown on the slide: we repurchased approximately 700,000 shares in the quarter at a cost of $195 million. On March 30th, $600 million remained available under our repurchase authorization. Slide 8 provides the sales and margin performance overview of our three operating segments. Intelligent Devices margin decreased to 16.5% compared to 20.2% a year ago. The decrease from the prior year was driven by lower sales volume and unfavorable mix, partially offset by lower incentive compensation. Higher sequential margin was driven by better volume and lower incentive compensation, partially offset by mix. Software and Control margin of 25.7% decreased from 33.6% last year. The lower margin was driven by lower sales volume, partially offset by lower incentive compensation, positive price-cost, and favorable mix, driven by higher software sales. Higher sequential margin was driven by lower incentive compensation, partially offset by lower volume. Lifecycle Services margin of 16.6% tripled from a year ago margin of 5.5%. The margin performance was driven by lower incentive compensation, higher sales, and higher margins in Sensia. Higher sequential margin was driven by volume, lower incentive compensation, and ongoing improvements in productivity. Lifecycle Services book-to-bill was 1.07, indicating continued strength in underlying demand. The next slide, 9, provides the Adjusted EPS walk from Q2 fiscal 2023 to Q2 fiscal 2024. Core performance was down $1.15 on an 8% organic sales decline. The EPS decline was driven by lower volume and unfavorable mix and was partially offset by positive price-cost. Incentive compensation was a $0.55 tailwind. This year-over-year improvement reflects no projected bonus payout this year versus an above-target payout last year. The dilution impact from acquisitions was neutral due to better-than-expected profitability in Clearpath and Verve. The year-over-year impact from tax was a $0.10 tailwind. Let's now move on to the next slide, 10, guidance for fiscal 2024. We are lowering our guidance for fiscal 2024. We now expect reported sales to decline in the range of -6% to -4% and organic sales to decline in the range of -8% to -6%. As Blake mentioned earlier, we continue to expect acquisitions to add 150 basis points to growth. We now expect currency to contribute about 50 basis points to growth as we are seeing continued strengthening of the US dollar. We continue to expect price to be a positive contributor to growth for the year. We expect the full-year adjusted effective tax rate to be around 17%. We are lowering our adjusted EPS guidance to a range of $10-$11. We now expect full-year fiscal 2024 free cash flow conversion of about 80% of adjusted income. The lowered expectations for free cash flow conversion are driven by the fact that the positive earnings impact from zero incentive compensation recorded this fiscal year does not result in better cash generation this year. This is because the payout of any annual incentive compensation occurs in the first quarter of the following fiscal year. Therefore, we will see the benefit of this on our cash flow conversion in fiscal year 2025. From an inventory standpoint, we continue to expect that inventory days on hand will drop to 125 days by the end of fiscal year 2024 compared to the 140 days of inventory we had at the end of fiscal year 2023. From a calendarization perspective, we expect mid-single digit sequential order growth in Q3 and high teens sequential order growth in Q4. We expect Q3 sales dollars and segment margin to be lower than Q2 levels. Now that we have largely cleared our product backlog, we are generating most of our product sales from new orders in the quarter, which are ramping up slower than we expected. We expect Q4 to be the highest revenue dollar and margin quarter of the year. From a sequential margin perspective, we expect margins in Q3 to be about 250 basis points lower than in Q2 due to the non-repeat of the bonus accrual reversal that benefited Q2, also lower volume and mix. By segment, we expect our Q3 margins to be up slightly in Intelligent Devices, down significantly in Software and Control due to lower Logix controller sales, and flat in Lifecycle Services. As Blake mentioned, we are adjusting our spending level with the lower outlook for this fiscal year. Last quarter, we expected our full-year 2024 investment spending to increase by $60 million year-over-year or to be up about 2%. We now expect our full-year spend to be down approximately $50 million versus prior year. This roughly $100 million spend reduction in the second half of fiscal 2024 is driven by a combination of structural and temporary cost-out actions, which will help protect our margins in the current fiscal year and will set the right foundation for fiscal year 2025 and beyond. Some examples of temporary cost reduction items include not filling open positions, reducing contractor spend, and further reducing our travel and marketing spend for the year. In terms of structural actions, we are expecting about $60 million of restructuring charges related to headcount reductions in the second half of the fiscal year. The expected restructuring charges are excluded from our Adjusted EPS. These savings and our continued cost structure optimization are aligned with our longer-term productivity focus and profitability targets. A few additional comments on fiscal 2024 guidance: corporate and other expense is now expected to be around $130 million. We're assuming average diluted shares outstanding of 114.3 million shares. We expect to deploy between $600 million and $800 million to share repurchases during the year. This is an increase from our prior range of $300-$500 million and reflects a higher near-term prioritization of returning cash to shareholders versus acquisitions. Net interest expense for fiscal 2024 is now expected to be about $135 million. With that, I'll turn it back over to Blake for some closing remarks before we start Q&A. Thanks, Nick. We are focused on getting synergies and efficiencies throughout the entire organization. The portfolio of capabilities that we have built and bought is second to none, and now is the time to knit all these pieces together. This will help us drive more customer value, efficiency, and cost savings, which in turn will yield higher margins and funds for reinvestment. Aijana will 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. Certainly. If you would like to ask a question, please press star followed by 1 on your telephone keypad. To withdraw any questions, press star 1 again. Our first question comes from Andy Kaplowitz from Citigroup. Please go ahead. Your line is open. Good morning, everyone. Nick, congrats, and thanks for all your help. Hey, Andy. So, Blake or Nick, could you give us more color into what's now embedded in terms of order trajectory and your $10-$11 EPS guidance? Have you seen continued positive improvement orders here to start Q3? Because obviously, you still need a pretty big order step up, especially in Q4, as you said, given your guidance. And it's been difficult to tell for you, I think, how much excess inventory has been out there, especially with machine builders. So what are you doing to try and get better visibility into when they may bottom with their inventory and ultimately you won't have to lower EPS again? Sure. Andy, I'll start, and then Nick may have some additional comments. We're expecting mid-single digits sequential growth in Q3 on orders. This is after low double-digit sequential order growth that we saw in Q2, and then we expect high teens sequential orders growth in Q4. And that's based on our analysis of the levels of existing inventory in distribution as well as in the machine builders. For distribution, we expect that largely to clear by the end of the third quarter in most regions. China's probably an outlier that goes a little bit longer, but we're tracking those inventory levels, and that's consistent with the direct feedback from those distributors. As we go out to the OEMs and have specific discussions with the largest OEMs, particularly in Europe and in North America, we're expecting that inventory to be largely cleared at the machine builders in Q4. This is imperfect because we have some of those machine builders that are buying direct from us, and then we have a lot that are going through distribution. So that's still evolving, but we have a much better view today than we did at the beginning of the year, and that's the primary reason for the reduced guidance for the year. Andy, one thing I'll just add on that. What we've seen in April orders is completely consistent with our guide of an expectation of order growth of 5% sequential order growth. Helpful guidance. Then, Blake, maybe just trying to step back and separate out the channel noise you've been seeing from the CapEx sweetness you mentioned, for instance, in food and beverage. I know you mentioned you will achieve the long-term targets, you said, November, but could you talk about your conviction at this point that Rockwell can resume that sort of 5%-8% organic growth trajectory, ex acquisitions sooner versus later? Can you give more color into the market share gains you mentioned in North America? And which core end markets would you think would drive Rockwell back to that improved growth? Sure. So we are confident that those growth ranges are reasonable as we look through the cycle. It's based on our offering. It's based on the higher growth that we see in North America, which, of course, is our home market where most of our sales are. And it's our portfolio that we've built that's winning today in the market. So we see that through the individual projects that are competitive, the growing impact of mega projects I and my team are directly involved with versus our toughest competitors around the world with a good win rate of those projects. We also see in the industries the win rates looking good. When I talk about market share gains, obviously, Logix controllers is one of the key areas, and we do see those gains both when we look at the U.S. and when we look around the world in terms of the reports on that important product line. There's some other areas as well, motor control centers, for instance, as we get those reports for our offering in North America, but also with the new Cubic offering, which is a space that was virtually unserved by us previously. Then with the autonomous mobile robots, you heard several examples of those wins in the production logistics space from our Clearpath acquisition. That's already a $5 billion or $6 billion market growing much faster than the general automation market. And so that gives us a lot of confidence with these new sources of value as well as the products that make up the majority of our business. We're confident about these long-term targets. And again, it's not just about the above-market growth. I think you've heard the tone on this call, and in the last few months, putting that together with the margin expansion is absolutely fundamental to our plans going forward. Appreciate all the color. Thanks, Andy. Our next question comes from Nigel Coe from Wolfe Research. Please go ahead. Your line is open. Oh, thanks. Good morning, everyone. Morning. Nick, enjoy your retirements. So just wondering if we maybe can get a bit more color on kind of the third quarter cut you provided. So I mean, I'm backing into an EPS closer to $2 per share for the third quarter. Just want to make sure that aligns with your model. And then in terms of the order rates that you're pointing to, mid-single-digit% increase sequentially, is that sort of backing into a $2 billion order number? Just trying to get a bit more quantification there. That'd be great. Yeah. Nigel, in terms of what you're backing into from an order rate in Q3, that's complete. That's consistent with how we're seeing this too. In terms of EPS, the one nuance I will point out from a quarterization on our tax rate, we expect our Q3 tax rate to be lower than the average and our Q4 tax rate to be higher than the average. That's just based on discrete items that are expected in the second half of the year and the timing. That's the only other nuance I'd say on this. But otherwise, I'd say your modeling is matching pretty closely what we're estimating. Okay. That's helpful. Thanks, Nick. And then on the cost savings, just on the $100 million of cost savings in the second half of this year, just want to make sure that that doesn't include any of the bonus accrual reversals or the investment spending pullback. That's all sort of additional cost savings. And it feels like it's mainly temporary costs in the back half of this year, and then we have more structural costs coming in in 2025. Is that the right way to think about it? Let me start with some general comments, and then Nick can add some detail to that. The $100 million of savings that I mentioned for the second half of the year is totally separate from anything with the incentive comp. So that's additional savings. That's totally separate from that. Embedded in that is a reduction in force of approximately 3%. So those are not temporary savings, and that will provide additional incremental benefit into next year. There's also some of the temporary actions that Nick talked about, but there's a meaningful reduction in force that's structural and is the front end of the additional structural actions that I alluded to and that we'll provide more detail on the next call. Nigel, part of what we were talking about there is the $100 million we're expecting in the second half of this year. Those actions, we expect to have a tail into fiscal year 2025 of an additional $120 million. And I'm saying that in reference to your comment about temporary. Some of it is temporary, but the majority of it is sustainable and makes that tailwind impact benefit into fiscal year 2025. Okay. Thanks, Nick. Our next question comes from Julian Mitchell from Barclays. Please go ahead. Your line is open. Hi. Good morning. Wish you all the best, Nick. Thank you for the help. Thanks, Julian. Just maybe circling back on the sort of EPS walk. So you've got that very helpful slide 11, for example. But if I think about sort of three big buckets of cost you've talked about this morning, you've got incentive compensation, you've got investment spend, and you've got these fixed cost reductions relating to headcount cuts. So it looks like for 2024, you've got about a $2 EPS tailwind year-over-year from incentive comp and investment spend combined. Is the right way to think about it, that a lot of that reverses in 2025? And then on the other hand, you've got these savings that maybe are worth about $1 of EPS from headcount cuts in 2025. Just trying to understand, of the incentive comp and investment spend, kind of how does that reverse in a substantial way kind of in the following year naturally? A couple of points, Julian. First of all, we certainly intend that the incentive compensation does reverse in fiscal year 2025. But the productivity actions that we're doing with the structural cost savings, we do not expect the majority of that investment spend that I noted on that slide to reverse. And that's why we're talking about the $120 million of carry-forward benefit into fiscal year 2025. So two different answers. The incentive comp absolutely does reverse, but investment spend does not. And again, investment spend in total for next year will be dependent on the opportunities we're seeing. We haven't set what that number is, but the benefits of what we're doing here, we are confident that will create this $120 million tailwind benefit into next year. Yeah. Just at a high level, the actions that were taken now with their benefit this year and then the incremental benefit next year, when you add that to the more structural actions that we're beginning, the more comprehensive program that I mentioned, we expect that to more than offset the headwinds from returned incentive comp investment and so on as we go into fiscal year 2025. That's really helpful. Thank you. And then just my follow-up would be trying to circle back to that point on sort of your revenues and your inventories and your customer inventories. So it sounds like you have this Q3 sales dip, I think, sequentially, Nick, you'd mentioned. Maybe help us understand why that's happening if orders are up sequentially in the second quarter finished and the third quarter that we're in now. And your own inventories on your balance sheet have been stuck at sort of the same dollar number for a year now. How are you so sure that your customers' inventories are coming down when your own are very stable? Yep. So as of the end of the second quarter, Julian, our product backlog is essentially back to normal. We've had good success working through with our supply chain, and we've brought our backlog back to normal. So going forward, we expect to be operating what we were like pre-pandemic, where orders in a particular quarter are very much like what our sales are in a particular quarter. In our second quarter, we were still benefiting from drawing down some of that backlog. We brought down our backlog in high single digits in the second quarter. And that's why our sales in second quarter were higher than our orders. That phenomenon will end going into the second half of the year. And that's why, even though we expect orders to be up sequentially, we expect revenue to be down sequentially. Super helpful. Thank you. Yep. Our next question comes from Noah Kaye from Oppenheimer. Please go ahead. Your line is open. Thanks so much. Maybe talk about some of the choices you're making around where to reduce investments in the business. I'd love any color. You've made a lot of acquisitions. Not sure if it's related to that. Maybe you can talk about it, if possible, on a segment level or by product. Sure. No, I'll make some comments, and Nick may have some additional ones. Most of the reduction in force that we're looking at is affecting SG&A. That does include sales and marketing and headquarters functions. I think as we look at guiding principles, we're directing the spend to the highest value activities. That's both geographically and from a product portfolio standpoint, going through and taking a look at what is generating the best returns in those areas. We're also integrating recent acquisitions with existing Rockwell resources and looking for the cost synergies there. So we're getting good performance out of our acquisitions. As we look at ways to get the efficiencies and, as I said, knit together what we built and bought, the actions we're taking are consistent with that. Then there's opportunities, as always, for back-office efficiencies by leveraging technology. We see that in SG&A. We see it in our development activities as well. There are some reductions in cost of sales, including some in manufacturing operations, as we're tuning our capacity to match what we're expecting near-term in terms of output. And that's product-specific, right? Some of our lines are growing very well year over year, and they're expected to continue. Others, as we've gotten back to full safety stock, we can tune that to reduce some of the variances in those operations. So that's the current list of actions that we're doing. As we look at the more comprehensive program, we'll be focusing on areas like sourcing. It's a big opportunity for us with the spend of direct material and other items. And then there's also additional opportunities for manufacturing efficiencies as we look at our portfolio and the wide range of SKUs that we offer. Nick? Yeah. The one piece I'd add to that, many of these costs are in organizations or functions that support multiple of our reporting segments. Given the way we allocate these costs across segments, Intelligent Devices and Software and Control will see the greatest impact from these actions that we're doing. Right. Makes sense. Thank you. And then very helpful on the walk sequentially on orders and your commentary around margins for 3Q. That does seem to imply - again, we're doing math here on the fly - a pretty big step up sequentially in margin for 4Q. I'm getting to something like 6 points here. Maybe just talk to the margin math around how you see exiting the year and what, apart from the cost reductions you've announced, would help that step up. Yep. There's a few things impacting our margin progression as we go through the second half of the year. You are correct. We expect Q4 to be, by far, our highest margin quarter of the four quarters. The biggest contributor to that is going to be volume that is positively impacting the margin, particularly in Software and Control. That's followed by the structural and temporary cost savings that we're doing. Then the third is we will be having a more favorable mix of revenue that will be benefiting margins. Volume is the largest, and then followed by the cost savings and then the mix, all contributing to that sequential improvement in margin in Q4. Very clear. Thank you. Our next question comes from Steve Tusa from JPMorgan. Please go ahead. Your line is open. Hey, guys. Good morning. Hi, Steve. When you talk about these investments, what's the trend on R&D this year relative to last year as a percentage of sales or on an absolute basis? Yeah, Steve. R&D as a percent of revenue is going to be pretty consistent at 6% of revenue. As a percent of revenue, it's not really changing from last year. Okay. And then I guess just more philosophically, thinking about the story, and I know you guys have talked about your business being more of an intellectual property business over time, certainly a part of the story at least, and what I struggle with a little bit higher level is whipping bonus accruals around, basically altering investments based on near-term sales. I guess that just seems juxtaposed with kind of an IP-type business. How do we have confidence that you're not rocking the boat with a lot of that core where the technology comes from? That would be kind of my biggest concern longer term. How are you guys managing that? Yeah. Steve, this is Blake. As Nick said, our development expense remains at 6%. We continue to invest robustly in areas like new product introduction, which is actually increasing over the last few years in terms of what we're delivering to the market, both in terms of the hardware products as well as new software as well. And so I think it'd be incorrect to talk about whiplashing that piece of it. We're looking for efficiencies that are taking costs down that had built up over the last few years of volatility as we've gone from pandemic to supply chain shortages and making sure that we're tuned for growth going forward with that. The incentive comp philosophy hasn't changed there, in that we operate in a pay-for-performance culture. We had great payouts last year because we performed really well with high teens, top-line growth, and even better EPS. This is a year that is below expectations, and we're not paying a bonus, but it's going to come back. That's the way we've operated for as long as I've been in the business. In no way it implies some sort of short-term activity to manage results at the expense of the long-term value that we continue to provide. And then just one last one on the 3Q to the 4Q. I know that the second half of this year was dependent on, obviously, the sales being there. I mean, how dependent are we going from the 2-ish to 4 and from 3Q to 4Q on sales actually being there? Is it the same kind of dynamic as we've been seeing in 3Q, just similar to the comments you made last quarter? Steve, the sales dynamic is the single biggest contributor to the increase in EPS from Q3 to Q4, followed second by, on a smaller scale, the cost actions. The total cost actions that we're projecting in the second half of the year, we expect about a third of that to be impacting Q3 and about two-thirds of that to be impacting Q4. So that is part of it, but it's still a smaller number compared to the reliance on revenue growth occurring in fourth quarter. Great. Thanks, as always, for all the details. Very helpful. And congrats on the coming retirement, Nick. Appreciate all the help. Thanks, Steve. Our next question comes from Rob Mason from Baird. Please go ahead. Your line is open. Yes. Good morning. I wanted to see if you could provide a little more color around the step-up in orders that you're expecting, the sequential step-up in orders that you're expecting in the fourth quarter. I know you mentioned distributor channel inventories normalizing at that point. But is that the entirety of the high-teens' growth, or are you expecting some shift and more positive shift in demand as well? There's a few elements of what informs that guidance, Rob. The first is a significant reduction in packaging machine builder inventory. So within the OEM inventory, packaging machinery has been particularly affected by that. The feedback we're receiving from the conversations directly with them indicates that that reduces significantly as we go through the third quarter and into the fourth quarter. The distributor inventory actually is expected to clear, again, in regions outside of China before that. Those two factors are an important part of it. We also see the normal seasonality in our engineer-to-order and lifecycle services shipments. There's always a higher shipment amount at the end of the year there, and that would include Sensia as well. We see the growing impact of mega projects. We do have a line of sight to some of those projects that are expected to come in with ordering and shipments beginning in the fourth quarter. We're seeing some of that now. Think of that as kind of a drumbeat that increases through the year and, again, into next year. Should we think about the fourth quarter order level as a solid jumping-off point as we go into 2025 then, absent the engineer-to-order normal seasonality there? Yeah. I mean, in this volatility that we've been operating in in the last four years, I'm going to reserve a few. But I think we're setting up the foundation so that we have an attractive cost base regardless of what orders do next year. Very good. Thank you. Our next question comes from Joe Ritchie from Goldman Sachs. Please go ahead. Your line is open. Thanks. Good morning, everybody. And Nick, wish you the best in retirement. No more back and forth. Thanks for all the help. Thanks, Joe. Yeah. So can I just maybe just start on that last comment on mega project spending specifically? I'm trying to square the comments around EVs earlier and some push-outs. And if I think about where we're seeing the biggest kind of expectation for mega project pickup, it would probably be in semi-fab, CapEx, and then also on the EV/battery plants. And so help me just kind of square the comments on EV pushing out and where you're actually starting to see some kind of some good green shoots on the mega project side? Yeah. So I mentioned that we're seeing some push-down on EV, but we are not seeing cancellations of those projects. And it doesn't mean that they've all gone away. EV is still about a third, a little bit more than a third of our total automotive business. So there's still some of those projects, EV projects, that we're winning and getting business for now. If we look at some of the other areas of mega projects, the facilities management and control systems for semiconductor fabs, we've got great capabilities there and are playing a major role in a lot of the fabs that have been announced and are currently under construction in the U.S. But around the world, that's been a good business for us in Asia for over a decade. So it's not a new application for us. Renewables is another area that we're seeing good investment playing in solar. We are seeing meaningful business in solar as well as wind, particularly with our Cubic acquisition. And then another area that we think has bottomed and we're seeing an impressive funnel building is in the area of warehouse automation and really the overall space of production logistics. And again, I'll go back to the capabilities that we have that's somewhat unique with AMRs, the mobile robots, combined with the fixed automation that we've always had. We're tracking some major projects there, and we've had some wins. And I talked about some of them on the call. To give you an example about how those are playing out, there are a couple of customers that we've talked to in the last couple of months that have come off of discussions with labor and have made it clear that they want to complement their people with technology to a greater extent over the next few years. Those have resulted in multi-million-dollar wins for Rockwell as a result of moving more aggressively into adding technology to complement their scarce resources. So those are the kinds of examples of mega projects that are starting to come in. That's super helpful, Blake. Thank you. And if I can maybe just make sure that I've got it totally squared for next year on the buckets of cost savings. So you mentioned $120 million for next year. We're going to get something more on the structural side. And then incentive comp goes to zero this year. And so in a normal year, that would be roughly basically about a $120-$130 million headwind in a normal year. So is that just baselining it? Is that the right way to think about it? Joe, you got it all right except for the last one. Our normal bonus expenses in the $160 million-$170 million range. Okay. Perfect. Thank you. Julianne, we'll take one more question. Certainly. Our last question will come from Joe O'Dea from Wells Fargo. Please go ahead. Your line is open. Hi. Good morning, everyone. Morning. Blake, when you talk about packaging, delivering better order activity from Q3 to Q4, just want to level set on sort of how that kind of sizes overall for the business. And so you're talking food and beverage and household and personal care, and we should be thinking about 25% of revenue that would be seeing that pickup? Yeah. So if you think about those verticals, and that's about the size of the overall verticals there, about 60% of our business in consumer packaged goods covered mainly by those two verticals is the OEMs, the machine builders. So that's the way you could kind of do the calculus of how much of that business has been suppressed by the higher inventory levels. And we're expecting that to be dissipating over the coming quarters. Got it. And then the bridge on sort of prior guide to revised guide and the core piece and the $3.75 sort of EPS impact on core, it looks like that could be something like a 60%-70% decremental. And if that's the case, and we think about the flip side, do you think about sort of a reversal of these headwinds as translating to better incrementals than what you would traditionally think about sort of through a cycle absent some of the temporary structural cost actions that are underway? Yeah. When you strip out things like incentive compensation and what we're showing there from investment spend because those things would normally be part of what we talk about in terms of our incrementals and decrementals. But we stripped out those two details to give you more detail of the underlying moving parts in there. But there are many parts of our portfolio where incrementals and decrementals like that in that 60% range are certainly normal. They're normally offset by some degree of incentive compensation or investment spend, though. Yeah. But directionally, I think you're right in that Logix. We've seen the biggest correction based on the really tough comps with the huge growth from last year. And as that comes back in, that hardware does have high incrementals and high decrementals. We'll put a lot around it with annual recurring revenue and so on, which does help us and continues to grow. But there's no getting around that Logix is very profitable. We have high incrementals and high decrementals there. I appreciate it. Thanks. Thank you, everyone, for joining us today. That concludes today's conference call. At this time, you may now disconnect. Thank you.