Cummins Inc.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 5 November 2026: press release. Guidance figures: 1 narrowed, 3 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Revenue rose 13% in quarter: Third-quarter revenue was $9.4 billion, up 13% from the third quarter of 2025. North America sales grew 15%, and international revenues, led by China, rose 11%. Source
• EBITDA reached record margin: EBITDA was $1.8 billion, or 18.9% of sales, against $1.2 billion, or 14.3%, a year earlier. The company described this as a record. Source
• Power Systems margin rose to 25.4%: Power Systems sales were $2.3 billion, up 15%. Segment EBITDA was $582 million, or 25.4% of sales, against $457 million, or 22.9%. Source
• Pickup truck orders weakened: Management said pickup truck demand in North America stayed below expectations and is expected to persist through year-end. This was the reason for lowering full-year revenue guidance. Source
• Data center power demand remains high: Management said global power generation equipment demand remains high, driven by data center buildout. Source
• $661 million returned to shareholders: Cash returned to shareholders in the quarter totaled $661 million, made up of cash dividends and share repurchases. Source
• Battery storage win for data center: Power Generation was selected to supply battery energy storage systems for a large U.S. data center project. The company called it its largest BESS deployment to date. Source

“We delivered record EBITDA and earnings per share in the third quarter”

Jennifer Rumsey, Chair and CEO of Cummins

Guidance

What changed from last quarter

• Guidance lowered: Full-year revenue growth expectation lowered to about 10%, from 10% to 13% in the prior release. Management cited weaker pickup truck demand in North America. Source
• Guidance kept: Full-year EBITDA margin expectation of about 18.2% is described as consistent with the prior range of 18.0% to 18.5%. Source
• New: Power Generation business selected to supply battery energy storage systems for a large U.S. data center project, the largest BESS deployment the company has announced to date. Source
• New: Accelera electrolyzer sales declined following a strategic review of the business. The release does not describe the scope or outcome of that review. Source

Results and growth drivers

• Revenue rose 13% in quarter: Third-quarter revenue was $9.4 billion, up 13% from the third quarter of 2025. North America sales grew 15%, and international revenues, led by China, rose 11%. Source
• EBITDA reached record margin: EBITDA was $1.8 billion, or 18.9% of sales, against $1.2 billion, or 14.3%, a year earlier. The company described this as a record. Source
• Net income and EPS both rose: Net income attributable to Cummins was $1.14 billion, or $8.25 per diluted share, against $536 million, or $3.86. The 2025 quarter included $240 million of Accelera non-cash charges. Source
• Tax items added $0.54 to EPS: Third-quarter diluted EPS included $0.54 per share of favorable discrete tax items, mainly favorable uncertain tax position and return-to-provision adjustments. Source
• Nine-month diluted EPS higher: Diluted EPS for the nine months was $19.70, against $16.23. Nine-month net sales were $27.3 billion, against $25.1 billion. Source

Segments and regions

• Engine sales up 20%: Engine sales were $3.1 billion, up 20%. Segment EBITDA was $422 million, or 13.5% of sales, against $261 million, or 10.0%. North America revenues rose 21%. Source
• Components margin rose to 14.3%: Components sales were $2.9 billion, up 23%. Segment EBITDA was $408 million, or 14.3% of sales, against $292 million, or 12.5%. Source
• Distribution margin fell to 13.9%: Distribution sales were $3.3 billion, up 4%. Segment EBITDA was $461 million, or 13.9% of sales, against $492 million, or 15.5% a year earlier. Source
• Power Systems margin rose to 25.4%: Power Systems sales were $2.3 billion, up 15%. Segment EBITDA was $582 million, or 25.4% of sales, against $457 million, or 22.9%. Source
• Accelera sales fell on electrolyzers: Accelera sales were $103 million, down 15%, mainly on lower electrolyzer sales after a strategic review of the business. The segment recorded an EBITDA loss of $56 million. Source

“We have updated our full-year revenue and profitability guidance primarily due to continued weaker than expected pickup truck demand in North America, which impacted our third quarter and is expected to persist through the end of this year”

Jennifer Rumsey, Chair and CEO of Cummins

Engine and distribution end markets

• Heavy and medium-duty engine sales rose: Engine sales to heavy-duty truck customers were $1,016 million, against $772 million, and medium-duty truck and bus sales were $1,045 million, against $784 million. Source
• Light-duty engine sales declined: Light-duty automotive engine sales were $500 million, against $583 million. Off-highway engine sales rose to $569 million from $466 million. Source
• Distribution power generation sales rose: Distribution power generation sales were $1,328 million, against $1,247 million, and parts sales were $1,049 million, against $1,013 million. Source
• Power Systems power generation rose: Power Systems power generation sales were $1,557 million, against $1,280 million. Industrial sales were $518 million, against $531 million. Source

Costs, margins and special items

• Gross margin rose to $2.6 billion: Gross margin was $2.6 billion, against $2.1 billion a year earlier, on cost of sales of $6.8 billion, against $6.2 billion. Source
• Overhead costs rose on SG&A: Selling, general and administrative expenses were $868 million, against $789 million. Research, development and engineering expenses were $400 million, against $345 million. Source
• Other operating expense fell sharply: Other operating expense, net was $30 million, against $247 million in the 2025 quarter, which included the Accelera charges. Source
• Excluding special items, margin 18.9%: Excluding special items, EBITDA was 18.9% of sales in the third quarter, against 17.2% in 2025, when the Accelera impairment and inventory write-down were excluded. Source
• First-quarter fuel cell sale charge: The first-quarter sale of the low-pressure fuel cell business, with cancelled commitments and resolved claims, produced a $199 million net charge, which the special-items EBITDA excludes. Source

“Global demand for power generation equipment remains exceptionally strong, driven by data center buildout.”

Jennifer Rumsey, Chair and CEO of Cummins

Demand and the order book

• Pickup truck orders weakened: Management said pickup truck demand in North America stayed below expectations and is expected to persist through year-end. This was the reason for lowering full-year revenue guidance. Source
• Medium and heavy truck markets improved: Management said the U.S. medium- and heavy-duty truck markets strengthened in the quarter, and that North America heavy-duty truck demand remains high. Source
• Data center power demand remains high: Management said global power generation equipment demand remains high, driven by data center buildout. Source
• Distribution North America up 5%: North American Distribution revenues rose 5% on higher power generation demand for data center applications. Source

Capital, cash and shareholder returns

• $661 million returned to shareholders: Cash returned to shareholders in the quarter totaled $661 million, made up of cash dividends and share repurchases. Source
• Dividends and buybacks paid in quarter: Dividends paid were $302 million and share repurchases $359 million in the quarter. Nine-month repurchases were $827 million, against none in the prior-year period. Source
• Quarterly dividend raised to $2.20: The quarterly common dividend was increased in July from $2.00 to $2.20 per share. The company says it has raised the dividend for 17 consecutive years. Source
• Operating cash flow rose: Operating cash flow was $1.4 billion in the quarter, against $1.3 billion, and $3.2 billion for nine months, against $2.1 billion. Capital expenditures were $303 million, against $298 million. Source
• Cash and securities at $4.2 billion: Cash, cash equivalents and marketable securities were $4.2 billion at September 30, 2026, against $3.6 billion at December 31, 2025. Source

Strategy and product launches

• Battery storage win for data center: Power Generation was selected to supply battery energy storage systems for a large U.S. data center project. The company called it its largest BESS deployment to date. Source
• HELM engine platforms nearing launch: The company completed the 2026 Forever Rising Tour, giving more than 500 customers and dealers a look at the 2027 X15, the X10 and the natural gas X15N engines. Source

Working capital and balance sheet

• Receivables and inventories increased: Receivables were $6.6 billion and inventories $6.8 billion at September 30, 2026, against $5.8 billion each at December 31, 2025. Source
• Payables rose to $4.9 billion: Accounts payable were $4.9 billion at September 30, 2026, against $3.8 billion at December 31, 2025. Source

Coming up, as management said on 5 November 2026

• Fourth-quarter record revenue expected: Management expects fourth-quarter revenues to step up from third-quarter levels and set a new record. Source
• HELM launch preparations continue: Management is preparing for the launch of its upcoming HELM engine platforms. The release gives no launch date. Source
• Cash generation and returns planned: Management plans to keep generating operating cash flow and returning cash to shareholders, with a goal of returning 50% of operating cash flow. Source

Figures management reported

Risks management discussed

• Demand: Management identified lower-than-expected pickup truck demand in North America as the cause of the guidance update, expected to persist through year-end. Source
• Financial: Accelera still reported an EBITDA loss in the quarter. Management said zero-emissions investment is being paced to reduce the rate of ongoing losses. Source

Earlier plans management reported on

• Not stated: Management said it remains committed to its goal of returning 50% of operating cash flow to shareholders. Source
• Not stated: Expected full-year EBITDA margin of about 18.2% is described as consistent with the prior guidance range. Source
• Not stated: Management said it remains committed to pacing zero-emissions investments on the most promising paths while reducing the rate of ongoing EBITDA losses. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.