Aug 27, 2026, 7:13 AM ETIndustrials

Titan Machinery Inc. — Fiscal Second Quarter 2026 Earnings Summary

TITNTITAN MACHINERY INC

Financial Performance

Consolidated revenue was $496.4 million for the quarter, a decrease from $546.4 million in the prior year period.
Equipment revenue was $328.5 million (down from $376.3 million), parts revenue was $106.6 million (down from $109.2 million), and service revenue was $46.4 million (down from $48.8 million).
Gross profit was $92.4 million compared to $93.6 million in the prior year, with gross profit margin expanding to 18.6% from 17.1% year-over-year.
Operating expenses increased to $94.1 million from $92.7 million, representing 19.0% of revenue compared to 17.0% in the prior year.
Floorplan interest expense and other interest expense decreased to $8.1 million from $11.5 million, driven by lower interest-bearing inventory levels.
Net loss was $9.2 million ($0.40 per diluted share) compared to a net loss of $6.0 million ($0.26 per diluted share) in the prior year.
Adjusted EBITDA was $4.6 million, down from $5.6 million in the prior year.
Cash at quarter-end was $29.5 million.
Total inventories increased by $28.4 million to $931.5 million from January 31, 2026, with equipment inventories rising $21.7 million to $746.9 million.
Outstanding floorplan payables were $623.6 million against $1.5 billion in total available floorplan and working capital lines of credit.
Net cash used for operating activities was $25.1 million for the six months ended July 31, 2026, compared to net cash provided of $49.9 million in the same period last year.

The Company reaffirms its previously issued profitability guidance for fiscal 2027, including Adjusted EBITDA of $17.0–$29.0 million and Adjusted Consolidated Pre-tax Loss of ($28.0)–($39.0) million.
Fiscal 2027 segment revenue modeling assumptions have been updated:
- Agriculture: Down 15%–20% (unchanged).
- Construction: Revised up to Up 5%–Up 10% from Flat–Up 5%.
- Europe: Revised down to Down 30%–Down 40% from Down 20%–Down 25%.
- Australia: Revised up to Up 15%–Up 20% from Up 10%–Up 15%.
Management anticipates calendar year 2026 could be the bottom of the current cycle.
Construction segment tailwinds are expected from increased activity in data centers and infrastructure projects.
Australia segment outlook is supported by healthy moisture levels leading to higher yield expectations and improving farmer sentiment.
Europe segment outlook is revised downward due to deteriorating regional sentiment and softer equipment demand.

Agriculture Segment: Revenue was $310.2 million, a 8.4% same-store sales decrease driven by softer equipment demand and continued pressure on grower profitability. Pre-tax loss improved to $3.3 million from $12.3 million in the prior year.
Construction Segment: Revenue was $78.6 million, a 9.2% same-store sales increase primarily due to higher equipment sales. Pre-tax income improved to $0.4 million from a $1.2 million loss in the prior year.
Europe Segment: Revenue was $66.1 million, including a $1.1 million foreign currency benefit. Net of currency, revenue decreased 33.7% ($33.1 million). The wind-down of German operations contributed approximately $11 million to the decrease. Pre-tax loss was $1.3 million compared to $5.1 million income in the prior year.
Australia Segment: Revenue was $41.4 million, including a $3.9 million foreign currency benefit. Net of currency, revenue increased 22.5% ($6.9 million). Pre-tax loss widened to $3.4 million from $2.1 million in the prior year.

The Agriculture segment faces continued pressure on grower profitability.
European demand was previously supported by EU stimulus programs in Romania, which have since waned.
The Company operates in a highly competitive environment with exposure to industry supply levels and fluctuating economic conditions.

Significant dependence on CNH Industrial for inventory allocation and supply chain continuity.
Risks associated with the Russia-Ukraine conflict impacting Ukrainian operations.
Foreign currency fluctuations affecting international revenue and earnings.
Potential difficulties integrating acquired stores and managing inventory levels.
Uncertainty in capital and credit markets affecting inventory financing availability.
Seasonal fluctuations and weather conditions impacting agricultural demand.

CEO Bryan Knutson stated that equipment margins in the Agriculture segment came in modestly ahead of expectations, driving consolidated gross margin improvement despite a difficult revenue environment.
Management expressed confidence that actions taken over the past two years regarding inventory health and cost structure management position the company favorably as fundamentals recover.
The tone reflects a focus on areas within management's control and pride in execution during a difficult environment.

The Company is winding down its German operations, which contributed approximately $11 million to the year-over-year revenue decrease in the quarter and is expected to result in approximately $11 million of revenue recognition for the full fiscal 2027 year.
The Company recognized $53.9 million of revenue from its German business in fiscal 2026.
Deferred revenue decreased significantly from $82.3 million at January 31, 2026, to $38.7 million at July 31, 2026.
The Company hosts a conference call and audio webcast for investors, with a replay available through September 27, 2026.