AGCO — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for the third quarter ended September 30, 2026, were $2.3 billion, a decrease of 8.6% year-over-year compared to $2.476 billion in Q3 2025; excluding favorable foreign currency translation of 0.1%, sales decreased 8.7%.
• Reported net income per share was $0.75 for the quarter, compared to $4.09 in Q3 2025; adjusted net income per share was $1.05, compared to $1.35 in Q3 2025.
• For the first nine months of 2026, net sales were approximately $7.2 billion, an increase of 0.7% year-over-year compared to $7.162 billion in the same period of 2025; excluding favorable foreign currency translation of 3.4%, sales decreased 2.7%.
• Reported net income per share for the first nine months of 2026 was $2.59, compared to $8.45 in 2025; adjusted net income per share was $3.42, compared to $3.11 in 2025.
• Consolidated income from operations for Q3 2026 was $116.1 million, down from $151.6 million in Q3 2025; adjusted income from operations was $137.0 million.
• Consolidated income from operations for the first nine months of 2026 was $337.5 million, down from $365.0 million in 2025; adjusted income from operations was $416.0 million.
• Adjusted operating margin for Q3 2026 was 6.1%, compared to 7.5% in Q3 2025; for the first nine months of 2026, it was 5.8%, compared to 6.8% in 2025.
• Cash and cash equivalents were $415.1 million as of September 30, 2026, down from $861.8 million as of December 31, 2025.
• Total debt (borrowings due within one year and long-term debt) was $2.677 billion as of September 30, 2026, compared to $2.441 billion as of December 31, 2025.
• Net cash used in operating activities for the first nine months of 2026 was $218.4 million, compared to net cash provided of $224.5 million in 2025.
• Net cash used in financing activities for the first nine months of 2026 was $198.6 million, compared to $52.7 million in 2025.

Guidance and Future Outlook:

• Full-year 2026 net sales are expected to be between $9.8 billion and $10.0 billion.
• Full-year 2026 adjusted operating margins are projected to be approximately 7.0%.
• Full-year 2026 adjusted earnings per share is targeted at approximately $5.50.
• Industry demand is expected to remain below historical mid-cycle levels through the remainder of 2026 due to cautious farmer spending.
• Industry demand in Western Europe is expected to remain challenged for the remainder of 2026 due to softer crop economics and elevated input costs.
• Estimates reflect tariff policies as of October 29, 2026, and AGCO's established mitigation actions; changes to tariff policies could affect projections.

Business Segments and Product Lines:

• North America: Net sales increased 35.1% (excluding currency) in Q3 2025, driven by higher unit sales in high-horsepower and mid-range tractors and parts. Income from operations was $13.8 million, compared to a loss of $42.0 million in Q3 2025, benefiting from approximately $13.0 million in IEEPA tariff refunds.
• Latin America: Net sales decreased 19.1% (excluding currency) in Q3 2025 due to softer industry demand. Income from operations was $13.0 million lower than the prior year period.
• Europe/Middle East (EME): Net sales decreased 18.1% (excluding currency) in Q3 2025, with pronounced declines in Germany, France, Italy, and Spain. Income from operations was $115.1 million lower than the prior year period.
• Asia/Pacific/Africa (APA): Net sales increased 9.2% (excluding currency) in Q3 2025, driven by higher sales in Australia, partially offset by lower sales in other Asian and African markets. Income from operations was $17.2 million higher than the prior year period.
• The company advanced its "Farmer-First" strategy by strengthening premium brands and expanding precision agriculture solutions, including AI-enabled targeted spraying and autonomous solutions.
• PTx allows farmers to add automation and autonomy to existing equipment across virtually any brand.
• Effective January 1, 2026, Mexico operations were transferred from the North America segment to the Latin America segment.

Market and Competitive Landscape:

• North American industry retail tractor sales were 9% lower in the first nine months of 2026 compared to 2025, with the largest declines in higher-horsepower categories.
• North American industry retail combine unit sales were 10% lower in the first nine months of 2026 compared to 2025.
• Brazil industry retail tractor sales were 17% lower in the first nine months of 2026, reflecting reduced demand for larger equipment.
• Western Europe industry retail tractor sales were 1% lower in the first nine months of 2026, with the third quarter down 9% compared to the third quarter of 2025.
• Hot and dry weather in Western Europe created yield variability and weighed on farmer sentiment in the third quarter.
• Farm profitability remains under pressure in Brazil due to higher interest rates, constrained credit conditions, and soft farm economics.
• The company faces significant competition from other agricultural equipment manufacturers.

Risks and Challenges:

• Financial results depend on the agricultural industry, including declines in the general economy, adverse weather, tariffs, increased farm input costs, lower commodity prices, and lower farm income.
• Higher inventory levels at dealers and high utilization of dealer credit limits could negatively impact future sales.
• The PTx Trimble joint venture transaction significantly increased indebtedness and interest expense; there is no certainty that anticipated benefits will be realized.
• Exposure to foreign laws, taxes, tariffs, trade restrictions, and political conditions; the validity and scope of tariffs and refunds remain uncertain.
• Conflicts in Ukraine and the Middle East have driven volatility in energy, logistics, and input markets, with potential for natural gas and diesel shortages affecting production.
• Dependence on Rabobank for retail financing and as a lead lender in credit facilities; difficulty in obtaining alternative financing could negatively impact sales.
• Substantial accounts receivable from dealers and end customers are dependent on the financial strength of the farm industry.
• Volatility in currency exchange rates and interest rates can adversely affect reported results and product competitiveness.
• Cybersecurity breaches, including ransomware attacks, pose a risk of disrupting operations or compromising systems.
• Reliance on suppliers for components and raw materials; potential disruptions could impact manufacturing and sales.
• Significant indebtedness subjects the company to restrictive covenants and payment obligations.

Management Commentary and Tone:

• Eric Hansotia, Chairman, President, and CEO, described the third quarter as "resilient" despite the "weakest global industry demand environment in more than a decade."
• Management noted that elevated input costs and uncertainty around commodity markets and the trade environment pushed industry demand below the last cyclical trough.
• The company aligned production with demand, managed dealer inventories, and maintained cost discipline.
• Management emphasized focusing on what can be controlled: helping farmers improve economics while strengthening the cost structure.
• The company remains focused on positioning for recovery as market conditions improve.

Other Key Points:

• On April 1, 2024, the company completed the acquisition of ag assets and technologies of Trimble through the formation of a joint venture, PTx Trimble, in which AGCO owns 85%.
• The company received refunds totaling approximately $13.0 million related to IEEPA tariffs during the third quarter of 2026.
• The company divested its interests in its Canadian finance joint venture during the first nine months of 2026, resulting in a foreign currency translation release.
• Cash dividends declared and paid per common share were $0.30 in Q3 2026 and $0.89 for the first nine months of 2026.
• Purchases and retirement of common stock totaled $403.7 million for the first nine months of 2026.
• The company received a refund resulting from a favorable resolution related to a prior settlement under the Brazilian government's "Litigation Zero" tax amnesty program during the first nine months of 2026.
• The company will host a conference call on October 29, 2026, at 10 a.m. Eastern Time.