WEST FARGO, N.D. — Case IH and New Holland dealership group Titan Machinery Inc. today reported financial results for the fiscal first quarter ended April 30, 2025.
Commenting on Titan’s results, Baird analyst Mig Dobre says, “Titan continues to take the steps necessary to destock its older inventory and realign its mix across both ag and construction. Margins reflected the pressure associated with destocking through a demand downturn, inventories were lowered by $12.5 million (in contrast to the normal seasonal build) with steeper reductions set to take place in the coming quarters.
“Our fiscal first quarter results demonstrated our ability to advance our short term goals in a challenging market environment, and while headwinds persist across the agricultural sector, our team remains focused on continuing to execute upon our initiative to optimize inventory and navigate through the trough of the cycle,” commented Bryan Knutson, Titan Machinery’s President and Chief Executive Officer. “The stronger than expected top-line performance during the fiscal first quarter primarily reflects the timing of delivery on pre-sold equipment, as opposed to an increase in demand, and does not change our overall expectations for the full fiscal year. We continue to anticipate a very subdued retail environment given the ongoing likelihood of weak farmer profitability, with government support programs remaining an important but still very much undefined variable. While challenges persist in the marketplace, our team’s relentless focus on disciplined execution of our inventory reduction initiatives and our customer care strategy is allowing us to manage key variables of the business that will improve our position as we navigate this cycle.”
Dobre adds, “Titan continues to work through the inventory destock, while this pressures equipment margins near term, lower inventories will mitigate the risk of downward earnings revisions lasting into FY27 (inventory normalization should result in earnings stabilization even absent a meaningful demand recovery).
Fiscal 2026 First Quarter Results
Consolidated Results
For the first quarter of fiscal 2026, revenue was $594.3 million compared to $628.7 million in the first quarter of last year. Equipment revenue was $436.8 million for the first quarter of fiscal 2026, compared to $468.1 million in the first quarter last year. Parts revenue was $105.6 million for the first quarter of fiscal 2026, compared to $108.2 million in the first quarter last year. Revenue generated from service was $44.0 million for the first quarter of fiscal 2026, compared to $45.1 million in the first quarter last year. Revenue from rental and other was $7.9 million for the first quarter of fiscal 2026, compared to $7.3 million in the first quarter last year.
Gross profit for the first quarter of fiscal 2026 was $90.9 million, compared to $121.8 million in the first quarter last year. The Company’s gross profit margin was 15.3% in the first quarter of fiscal 2026, compared to 19.4% in the first quarter last year. The year-over-year decrease in gross profit margin was primarily due to lower equipment margins, driven by softer retail demand and the Company’s initiatives to manage inventory to targeted levels.
Operating expenses were $96.4 million for the first quarter of fiscal 2026, compared to $99.2 million in the first quarter last year. The decrease was primarily driven by lower variable expenses associated with the year-over-year decline in revenue and profitability. Operating expense as a percentage of revenue was 16.2% for the first quarter of fiscal 2026, compared to 15.8% of revenue in the first quarter last year.
Floorplan interest expense and other interest expense was $11.1 million in the first quarter of fiscal 2026, compared to $9.5 million for the same period last year. The increase in interest expense is the result of higher long-term debt outstanding resulting from the Company’s purchase of previously leased facilities, as well as an increase in facilities being financed with finance leases. Floorplan and other interest expense decreased 15.3% sequentially, reflecting the Company’s continued efforts to optimize its inventory position.
In the first quarter of fiscal 2026, net loss was $13.2 million, with loss per diluted share of $0.58, compared to net income of $9.4 million, with earnings per diluted share of $0.41, for the first quarter last year.
EBITDA in the first quarter of fiscal 2026 was $2.6 million, compared to $30.9 million in the first quarter last year.
Segment Results
Agriculture Segment – Revenue for the first quarter of fiscal 2026 was $384.4 million, compared to $447.7 million in the first quarter last year, reflecting a same-store sales decrease of 14.1%. The revenue decrease resulted from a softening of demand for equipment, driven by the decline in net farm income and sustained high interest rates. Pre-tax loss for the first quarter of fiscal 2026 was $12.8 million, compared to $13.0 million of pre-tax income in the first quarter last year.
Construction Segment – Revenue for the first quarter of fiscal 2026 was $72.1 million, compared to $71.5 million in the first quarter last year, reflecting a same-store sales increase of 0.9%. Pre-tax loss for the first quarter of fiscal 2026 was $4.2 million, compared to $0.3 million of pre-tax income in the first quarter last year.
Europe Segment – Revenue for the first quarter of fiscal 2026 was $93.9 million, compared to $65.1 million in the first quarter last year, which includes a $2.1 million negative impact related to foreign currency fluctuations. Net of the effect of these foreign currency fluctuations, revenue increased $30.9 million, or 47.5%, largely driven by a stronger than expected response to European Union stimulus programs in Romania. Pre-tax income for the first quarter of fiscal 2026 was $4.7 million, compared to $1.4 million in the first quarter last year.
Australia Segment – Revenue for the first quarter of fiscal 2026 was $44.0 million, compared to $44.4 million in the first quarter last year, which includes a $2.0 million negative impact related to foreign currency fluctuations. Net of the effect of these foreign currency fluctuations, revenue increased $1.6 million or 3.6%. Pre-tax loss for the first quarter of fiscal 2026 was $0.6 million, compared to $0.5 million in the first quarter last year.
Balance Sheet and Cashflow
Cash at the end of the first quarter of fiscal 2026 was $21.5 million. Inventories were flat at $1.1 billion as of April 30, 2025 compared to January 31, 2025. Outstanding floorplan payables were $769.6 million on $1.5 billion total available floorplan and working capital lines of credit as of April 30, 2025, compared to $755.7 million outstanding floorplan payables as of January 31, 2025.
For the three months ended April 30, 2025, the Company’s net cash provided by operating activities was $6.2 million, compared to net cash used for operating activities of $32.4 million for the three months ended April 30, 2024. The change in cash from operating activities was primarily attributable to changes in inventory and a changing mix in floorplan financing, which was partially offset by a decrease in net income for the first three months of fiscal 2026 compared to the prior year period.
Additional Management Commentary
Mr. Knutson continued, “We are reiterating our full year diluted adjusted earnings per share guidance, as our consolidated performance is tracking within our expected range. Internationally, we are updating our segment revenue assumptions for both Europe and Australia given local dynamics, but we believe that absent unique variables, the broader agriculture sector remains challenged in the near-term given broad-based weakness in commodity prices, which is consistent with our base expectations. Looking ahead, the progression of our inventory reduction efforts remains core to our operating strategy to stabilize equipment margins and restore the business’s earnings power.”
Titan Machinery is on the Farm Equipment Dealer 100™, a ranking of the top 100 North American farm equipment dealers — by number of locations, which provides information on total and ag stores, brands, geographies served, employees, history, executives and ownership/company profile information.
