Cummins Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third-quarter 2026 revenues were $9.4 billion, a 13% increase from $8.3 billion in the same quarter of 2025.
• Net income attributable to Cummins was $1.14 billion ($8.25 per diluted share), compared to $536 million ($3.86 per diluted share) in Q3 2025.
• Q3 2025 results included $240 million ($1.73 per share) of Accelera non-cash charges; Q3 2026 included $0.54 per share of favorable discrete tax items.
• EBITDA was a record $1.8 billion (18.9% of sales), up from $1.2 billion (14.3% of sales) in Q3 2025.
• Nine-month 2026 net sales were $27.3 billion, up from $25.1 billion in the prior year period.
• Nine-month 2026 net income attributable to Cummins was $2.73 billion ($19.70 per diluted share), compared to $2.25 billion ($16.23 per diluted share) in the prior year.
• Nine-month 2026 EBITDA was $4.73 billion (17.3% of sales), compared to $4.23 billion (16.8% of sales) in the prior year.
• Cash and cash equivalents at September 30, 2026, were $3.57 billion, compared to $2.85 billion at December 31, 2025.
• Long-term debt was $6.63 billion at September 30, 2026, compared to $6.79 billion at December 31, 2025.
• Deferred revenue totaled $2.86 billion ($1.69 billion current, $1.17 billion long-term) at September 30, 2026.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $3.21 billion, compared to $2.09 billion in the prior year.
• Capital expenditures for the nine months ended September 30, 2026, were $741 million.
• Cummins returned $661 million to shareholders in the third quarter via cash dividends and share repurchases.

Guidance and Future Outlook:

• Full-year 2026 revenue growth is expected to be approximately 10%, updated from a prior range of 10% to 13%.
• Full-year 2026 EBITDA margins are expected to be approximately 18.2%, consistent with the prior guidance range of 18% to 18.5% (excluding charges related to the sale of the low-pressure fuel cell business).
• The company expects fourth-quarter revenues to step up from third-quarter levels and set a new record.
• Cummins is committed to returning 50% of operating cash flow back to shareholders.
• The effective tax rate for 2026 is expected to approximate 23.0%, excluding discrete items and the unfavorable tax impact of the $199 million loss on the sale of the low-pressure fuel cell business.

Business Segments and Product Lines:

• Engine Segment: Sales were $3.1 billion (up 20%); Segment EBITDA was $422 million (13.5% of sales). North America sales increased 21% and international sales increased 18%.
• Components Segment: Sales were $2.9 billion (up 23%); Segment EBITDA was $408 million (14.3% of sales). North America sales increased 35% and international sales increased 8%.
• Distribution Segment: Sales were $3.3 billion (up 4%); Segment EBITDA was $461 million (13.9% of sales). North America sales increased 5% and international sales increased 4%, driven by power generation demand.
• Power Systems Segment: Sales were $2.3 billion (up 15%); Segment EBITDA was $582 million (25.4% of sales). North America sales increased 20% and international sales increased 11%, driven by data center markets.
• Accelera Segment: Sales were $103 million (down 15%); Segment EBITDA loss was $56 million. Sales decreased due to reduced electrolyzer sales following a strategic review.
• In July, the quarterly common stock cash dividend was increased from $2.00 to $2.20 per share.
• In August, the Power Generation business was selected to supply battery energy storage systems (BESS) for a large U.S. data center project.
• Cummins completed the 2026 Forever Rising Tour, showcasing the 2027 X15, X10, and natural gas X15N engines to over 500 customers and dealers.

Market and Competitive Landscape:

• Global demand for power generation equipment remains exceptionally strong, driven by data center buildout.
• U.S. medium- and heavy-duty truck markets strengthened.
• Customer orders in the pickup truck market have weakened, impacting the third quarter and expected to persist through the end of the year.
• Growth in China contributed to international revenue increases across segments.
• Cummins was named a World's Top Disability Inclusive Business® for the sixth consecutive year with a top score of 100 on the Disability Index®.

Risks and Challenges:

• Weaker than expected pickup truck demand in North America.
• Regulatory civil claims regarding emissions certification and compliance for certain engines used in U.S. pickup truck applications, including required mitigation projects and potential legal actions.
• Unpredictability in the adoption, implementation, and enforcement of emission standards globally.
• Changes in tariffs, trade laws, and international trade policies.
• Raw material, transportation, and labor price fluctuations and supply shortages.
• Risks associated with the development of new technologies and the energy transition.
• Potential security breaches or disruptions to the IT environment.
• Political, economic, and social uncertainty in global operations.

Management Commentary and Tone:

• Jennifer Rumsey, Chair and CEO, stated the company delivered record EBITDA and earnings per share, led by the Power Systems business.
• Management expressed confidence that market-leading positions and a broad portfolio will enable continued delivery for customers, improved financial performance cycle-over-cycle, and cash returns to shareholders.
• The company remains committed to pacing and focusing zero-emissions investments on the most promising paths to ensure long-term success while reducing the rate of ongoing EBITDA losses in the Accelera segment.

Other Key Points:

• In the first quarter of 2026, Cummins sold its low-pressure fuel cell business, resulting in a net payment of $175 million and a net charge of $199 million reflected in other operating expense.
• The company has increased the quarterly dividend to shareholders for 17 consecutive years.
• The BESS project announced in August represents Cummins' largest BESS deployment to date.
• The Accelera segment includes a $210 million goodwill impairment charge and a $30 million inventory write-down in the prior year period (Q3 2025).