Terex Corporation

07/30/2026 | Press release | Distributed by Public on 07/30/2026 11:34

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS DESCRIPTION
Terex is a global industrial equipment manufacturer of materials processing machinery, waste and recycling solutions, customized vehicle solutions, mobile elevating work platforms (MEWPs), equipment for the electric utility industry, commercial and custom fire and ambulance vehicles, and recreational vehicles. We design, build, and support products used in maintenance, manufacturing, energy, waste and recycling, minerals and materials management, construction, the entertainment industry, emergency response, and the recreational vehicles market. We provide lifecycle support to our customers through our global parts and services organization, and offer complementary digital solutions, designed to help our customers maximize their return on their investment. Certain Terex products and solutions enable customers to reduce their impact on the environment including electric and hybrid offerings that deliver quiet and emission-free performance, products that support renewable energy, and products that aid in the recovery of useful materials from various types of waste. Our products are manufactured in North America, Europe, and Asia Pacific and sold worldwide. We engage with customers through all stages of the product life cycle, from initial specification to parts and service support. We report our business in the following segments: (i) Environmental Solutions ("ES"), (ii) Materials Processing ("MP"), (iii) Specialty Vehicles ("SV") and (iv) Aerials.
Overview
During the second quarter of 2026, the Company remained focused on executing its operating plan, integrating the legacy Terex and REV organizations, and deploying the Terex Operating System ("TOS") across the enterprise to improve operational execution, reduce fixed costs, and drive productivity improvements. The REV Transaction, which closed in the first quarter of 2026, significantly expanded our portfolio of specialty equipment businesses and strengthened our position in resilient, high-demand markets with attractive long-term growth potential. Our integration work is progressing as planned, and we continue to focus on realizing synergies, improving operational consistency, and leveraging the combined scale of the Company. See Note D - "Acquisitions" in our Notes to Condensed Consolidated Financial Statements for additional information regarding the REV Transaction.
Terex delivered strong second quarter results, with revenue growth in all segments and higher Adjusted operating profit and Adjusted EBITDA as compared with the same period from the prior year. Net sales for the three months ended June 30, 2026 were $2,238 million including sales generated from SV of $650 million, compared to $1,487 million in the same period in the prior year. Adjusted EBITDA for the three months ended June 30, 2026 was $269 million including adjusted EBITDA generated by SV of $94 million, compared to $182 million in the same period in 2025. Additional information regarding segment specific results is provided in the "Results of Operations" section below. The Company's free cash flow for the three months ended June 30, 2026 was $101 million compared to $78 million in the same period in 2025, reflecting better working capital management for the three months ended June 30, 2026. Backlog as of June 30, 2026 was $6.9 billion, providing solid forward visibility.
In the second quarter of 2026, our largest market remained North America. Over the past two years, we deliberately shifted our end market exposure to more U.S.-based, resilient and predictable sectors. Our North American sales represented approximately 83% of our total sales during the second quarter of 2026, as compared to the corresponding period in the prior year, where our North America sales represented 73% of total sales. We continue to execute our capital allocation strategy by driving more operational cash through better net working capital management and by returning value to shareholders through dividends and opportunistic share repurchases. Our net working capital as a percentage of trailing three month annualized net sales was 15.2% as of June 30, 2026 compared to 22.8% from the same period in the prior year. We continue to maintain ample liquidity with approximately $1,097 million available as of June 30, 2026. See "Liquidity and Capital Resources" for a detailed description of liquidity and working capital levels, including the primary factors affecting such levels, as well as a reconciliation of net cash provided by operating activities to free cash flow.
Our key end markets remain resilient with reliable replacement and aftermarket demand. In waste and recycling, long-term demand is supported by fleet replacement, innovation and demographic trends, although certain customers in the short term continue to manage capital spending and digest recently delivered fleet. We expect utility market demand to remain supported by long-term investment in the U.S. electrical grid, including transmission expansion and future data-center-related growth. Demand for fire and emergency vehicles remains stable, tied to municipal budgets and replacement demand. In Aerials and MP, infrastructure activity remains robust, supported by government funding and a growing pipeline of mega projects that we expect to provide a tailwind through at least 2030.
We continue to see opportunities to improve operating performance across the portfolio through the on-going integration process, deploying TOS, investing in technology that enables productivity improvement and leveraging our broader portfolio and scale to better serve customers.
RESULTS OF OPERATIONS
Three Months Ended June 30, 2026 Compared with Three Months Ended June 30, 2025
Consolidated
Three Months Ended June 30,
2026 2025
% of
Sales 		% of
Sales 		% Change In
Reported Amounts
($ amounts in millions)
Net sales $ 2,238 - $ 1,487 - 50.5 %
Gross profit
444 19.8 % 308 20.7 % 44.2 %
Selling, general and administrative expenses
209 9.3 % 162 10.9 % 29.0 %
Amortization of purchased intangibles
48 2.1 % 17 1.1 % 182.4 %
Operating profit 187 8.4 % 129 8.7 % 45.0 %
Interest expense, net of interest income
45 2.0 % 42 2.8 % 7.1 %
Income taxes (29) (1.3) % (17) (1.1) % 70.6 %
Net income 110 4.9 % 72 4.8 % 52.8 %
Adjusted operating profit
245 10.9 % 164 11.0 % 49.4 %
Adjusted EBITDA
269 12.0 % 182 12.2 % 47.8 %
Net Sales
Net sales for the three months ended June 30, 2026 increased $751 million when compared to the same period in 2025, including sales generated from SV of $650 million. Excluding the impact of SV, and $36 million of sales in the prior year period from the Company's tower and rough terrain cranes businesses which were sold on October 31, 2025, the increase in Net sales was primarily due to higher shipments in Aerials, MP and ES in North America and positive effects of foreign exchange rate changes.
Gross Profit
Gross profit for the three months ended June 30, 2026 increased $136 million when compared to the same period in 2025, primarily driven by the gross profit contribution of $139 million from SV. Excluding the impact of SV, the decrease in gross profit of $3 million was primarily due to higher tariff costs within Aerials and unfavorable product mix in ES, partially offset by favorable mix and higher volume absorption in MP, and approximately $8 million of IEEPA tariff refunds received, net of a one-time unfavorable customs-related accrual.
Selling, general, and administrative expense
Selling, general and administrative expenses for the three months ended June 30, 2026 increased $47 million when compared to the same period in 2025, driven by the SG&A contribution of $37 million from SV. Excluding the impact of SV, the increase in selling, general, and administrative expense of $10 million was primarily due to the REV Transaction, including additional compensation expense and severance and retention costs, as well as negative effects of foreign exchange rate changes. These increases were partially offset by lower costs within MP due to the absence of the Company's tower and rough terrain crane businesses, which were sold on October 31, 2025 and are included in the prior-year period results.
Amortization of purchased intangibles
Amortization of purchased intangibles for the three months ended June 30, 2026 increased $31 million when compared to the same period in 2025, primarily due to the additional amortization expense from purchased intangibles resulting from the REV Transaction.
Operating profit
Operating profit for the three months ended June 30, 2026 increased $58 million when compared to the same period in 2025, primarily driven by the operating profit contribution of $73 million from SV. Excluding the impact of SV, operating profit decreased by $15 million, primarily due to higher tariff costs within Aerials, unfavorable product mix within ES, and costs related to the REV Transaction, partially offset by favorable mix and higher volume absorption in MP.
Interest expense, net of interest income
Interest expense, net of interest income, for the three months ended June 30, 2026 and 2025 was $45 million and $42 million, respectively. The increase in expense is primarily due to interest accrued on customer deposits and higher revolver borrowings, partially offset by lower term loan interest rates and higher interest income.
Provision for income taxes
Income tax expense for the three months ended June 30, 2026, was $29 million on pretax income of $139 million, resulting in an effective tax rate of 20.6%, as compared to income tax expense of $17 million on pretax income of $89 million, resulting in an effective tax rate of 18.5%, for the three months ended June 30, 2025. The higher effective tax rate for the three months ended June 30, 2026 when compared with the three months ended June 30, 2025 is primarily due to higher tax related to geographic distribution of income.
Net income
Net income for the three months ended June 30, 2026 was $110 million compared to Net income of $72 million in the same period in 2025. The increase in Net income of $38 million was primarily due to the factors detailed above.
Adjusted operating profit
Adjusted operating profit for the three months ended June 30, 2026 increased $81 million when compared to the same period in 2025, primarily due to the Adjusted operating profit generated by SV of $88 million. Excluding the impact of SV, Adjusted operating profit decreased by $7 million, driven by higher tariff costs within Aerials and unfavorable mix within ES, partially offset by favorable mix and higher volume absorption in MP.
Adjusted EBITDA
Adjusted EBITDA for the three months ended June 30, 2026 increased $87 million when compared to the same period in 2025, primarily due to Adjusted EBITDA generated by SV of $94 million. Excluding the impact of SV, Adjusted EBITDA decreased by $7 million, driven by higher tariff costs within Aerials in the current year period and unfavorable mix within ES, partially offset by favorable mix and higher volume absorption in MP.
Environmental Solutions
Three Months Ended June 30,
2026 2025
% of
Sales 		% of
Sales 		% Change In
Reported Amounts
($ amounts in millions)
Net sales $ 456 - $ 430 - 5.9 %
Adjusted EBITDA
$ 80 17.5 % $ 86 20.0 % (7.0) %
Net sales for the three months ended June 30, 2026 increased $26 million when compared to the same period in 2025, primarily due to increased throughput and shipments of utilities products, partially offset by lower shipments of refuse collection vehicles.
Adjusted EBITDA for the three months ended June 30, 2026 decreased $6 million when compared to the same period in 2025, primarily due to greater contribution from Utilities, inefficiencies related to a production ramp up in Utilities, and under-absorption associated with lower refuse collection vehicle volume within ESG.
Materials Processing
Three Months Ended June 30,
2026 2025
% of
Sales 		% of
Sales 		% Change In
Reported Amounts
($ amounts in millions)
Net sales $ 464 - $ 454 - 2.2 %
Adjusted EBITDA
$ 87 18.8 % $ 62 13.8 % 40.3 %
Net sales for the three months ended June 30, 2026 increased $10 million when compared to the same period in 2025. Excluding the sales impact from the Company's tower and rough terrain crane businesses, which were sold on October 31, 2025 and are included in the prior-year period results, net sales increased $46 million. The improvement was primarily driven by increased shipments, particularly for mobile crushers in the U.S. supported by road construction, infrastructure projects, and select commercial building activities.
Adjusted EBITDA for the three months ended June 30, 2026 increased $25 million when compared to the same period in 2025, primarily due to favorable mix, higher volume absorption, and lower SG&A costs driven by the sale of the Company's tower and rough terrain cranes businesses, partially offset by increased transportation costs. The adjusted EBITDA impact from the Company's tower and rough terrain crane businesses, which were sold on October 31, 2025 and are included in the prior period results, was $2 million.
Specialty Vehicles
Three Months Ended June 30,
2026 2025
% of
Sales 		% of
Sales 		% Change In
Reported Amounts
($ amounts in millions)
Net sales $ 650 - $ - - *
Adjusted EBITDA
$ 94 14.5 % $ - * *
* Not a meaningful percentage
Net sales and Adjusted EBITDA represent the results of operations of REV from the REV Transaction for the three months ended June 30, 2026. See Note D - "Acquisitions" in our Condensed Consolidated Financial Statements for additional information regarding the REV Transaction.
Aerials
Three Months Ended June 30,
2026 2025
% of
Sales 		% of
Sales 		% Change In
Reported Amounts
($ amounts in millions)
Net sales $ 673 - $ 607 - 10.9 %
Adjusted EBITDA
$ 38 5.7 % $ 55 9.1 % (30.9) %
Net sales for the three months ended June 30, 2026 increased $66 million when compared to the same period in 2025, primarily due to increased shipments to national customers for mega projects and positive impacts from exchange rate changes.
Adjusted EBITDA for the three months ended June 30, 2026 decreased $17 million when compared to the same period in 2025, primarily due to higher tariff costs in the current year period and inflationary pressures, partially offset by higher volume, price realization and cost actions.
Corporate and Other / Eliminations
Three Months Ended June 30,
2026 2025
% of
Sales 		% of
Sales 		% Change In
Reported Amounts
($ amounts in millions)
Net sales $ (5) - $ (4) - (25.0) %
Adjusted EBITDA
(30) * $ (21) * (42.9) %
* Not a meaningful percentage
Adjusted EBITDA for the three months ended June 30, 2026 decreased $9 million when compared to the same period in 2025. The decrease is primarily due to additional costs driven by the REV Transaction which includes higher compensation costs and technology expenses.
RESULTS OF OPERATIONS
Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025
Consolidated
Six Months Ended June 30,
2026 2025
% of
Sales 		% of
Sales 		% Change In
Reported Amounts
($ amounts in millions)
Net sales $ 3,972 - 2,716 - 46.2 %
Gross profit 651 16.4 % 556 20.5 % 17.1 %
Selling, general and administrative expenses
451 11.4 % 323 11.9 % 39.6 %
Amortization of purchased intangibles 95 2.4 % 35 1.3 % 171.4 %
Operating profit 105 2.6 % 198 7.3 % (47.0) %
Interest expense, net of interest income 88 2.2 % 83 3.1 % 6.0 %
Benefit from (provision for) income taxes 4 0.1 % (22) (0.8) % *
Net income 21 0.5 % 93 3.4 % (77.4) %
Adjusted operating profit 395 9.9 % 276 10.1 % 43.1 %
Adjusted EBITDA 442 11.1 % 310 11.4 % 42.6 %
* Not a meaningful percentage
Net Sales
Net sales for the six months ended June 30, 2026 increased $1,256 million when compared to the same period in 2025, including sales generated from SV of $1,086 million. Excluding the impact of SV, and $64 million of sales in the prior year period from the Company's tower and rough terrain cranes businesses which were sold on October 31, 2025, the increase in Net sales was primarily due to higher shipments across most product lines and geographies in all other segments and positive effects of foreign exchange rate changes.
Gross Profit
Gross profit for the six months ended June 30, 2026 increased $95 million when compared to the same period in 2025, primarily driven by the gross profit contribution of $105 million from SV. Excluding the impact of SV, the decrease in gross profit of $10 million was primarily due to higher tariff costs within Aerials and unfavorable product mix within ES, partially offset by favorable mix and higher volume absorption in MP, and approximately $8 million of IEEPA tariff refunds received, net of a one-time unfavorable customs-related accrual.
Selling, general, and administrative expense
Selling, general and administrative expenses for the six months ended June 30, 2026 increased $128 million when compared to the same period in 2025, driven by the SG&A contribution of $62 million from SV. Excluding the impact of SV, the increase in selling, general, and administrative expense of $66 million was primarily due to the REV Transaction, including additional compensation expense, severance and retention costs and transaction costs of $18 million, partially offset by lower costs within MP due to the absence of the Company's tower and rough terrain crane businesses, which were sold on October 31, 2025 and are included in the prior-year period results.
Amortization of purchased intangibles
Amortization of purchased intangibles for the six months ended June 30, 2026 increased $60 million when compared to the same period in 2025, primarily due to the additional amortization expense from purchased intangibles resulting from the REV Transaction.
Operating profit
Operating profit for the six months ended June 30, 2026 was $105 million compared to Operating profit of $198 million in the same period in 2025. Excluding the operating loss generated by SV of $15 million, operating profit decreased $78 million, primarily due to higher tariff costs within Aerials and unfavorable mix within Aerials and ES, partially offset by favorable mix and higher volume absorption in MP.
Interest expense, net of interest income
Interest expense, net of interest income, for the six months ended June 30, 2026 and 2025 was $88 million and $83 million, respectively. The increase in expense is primarily due to interest accrued on customer deposits and higher revolver borrowings, partially offset by lower term loan interest rates and higher interest income.
Benefit from (provision for) income taxes
Income tax benefit for the six months ended June 30, 2026, was $4 million on pretax income of $13 million, resulting in an effective tax rate of (37.4)%, as compared to income tax expense of $22 million on pretax income of $115 million, resulting in an effective tax rate of 18.9%, for the six months ended June 30, 2025. The lower effective tax rate for the six months ended June 30, 2026 when compared with the six months ended June 30, 2025 is primarily due to an increase in favorable discrete items.
Net income
Net income for the six months ended June 30, 2026 was $21 million compared to Net income of $93 million in the same period in 2025. The decrease in Net income of $72 million was primarily due to the factors detailed above.
Adjusted operating profit
Adjusted operating profit for the six months ended June 30, 2026 increased $119 million when compared to the same period in 2025, primarily due to the Adjusted operating profit generated by SV of $146 million. Excluding the impact of SV, Adjusted operating profit decreased by $27 million, primarily due to higher tariff costs within Aerials and unfavorable mix within Aerials and ES, partially offset by favorable mix and higher volume absorption in MP.
Adjusted EBITDA
Adjusted EBITDA for the six months ended June 30, 2026 increased $132 million when compared to the same period in 2025, primarily due to Adjusted EBITDA generated by SV of $156 million. Excluding the impact of SV, Adjusted EBITDA decreased by $24 million, primarily due to higher tariff costs within Aerials in the current year period and unfavorable mix within ES and Aerials, partially offset by favorable mix and higher volume absorption in MP.
Environmental Solutions
Six Months Ended June 30,
2026 2025
% of
Sales 		% of
Sales 		% Change In
Reported Amounts
($ amounts in millions)
Net sales $ 867 - $ 829 - 4.6 %
Adjusted EBITDA $ 154 17.7 % $ 167 20.2 % (7.8) %
Net sales for the six months ended June 30, 2026 increased $38 million when compared to the same period in 2025, primarily due to increased throughput and shipments of utilities products, partially offset by lower shipments of refuse collection vehicles.
Adjusted EBITDA for the six months ended June 30, 2026 decreased $13 million when compared to the same period in 2025, primarily due to unfavorable mix, inefficiencies related to a production ramp up in Utilities, and under-absorption associated with lower refuse collection vehicle volume within ESG.
Materials Processing
Six Months Ended June 30,
2026 2025
% of
Sales 		% of
Sales 		% Change In
Reported Amounts
($ amounts in millions)
Net sales $ 883 - $ 836 - 5.6 %
Adjusted EBITDA $ 150 17.0 % $ 105 12.6 % 42.9 %
Net sales for the six months ended June 30, 2026 increased $47 million when compared to the same period in 2025. Excluding the sales impact from the Company's tower and rough terrain crane businesses, which were sold on October 31, 2025 and are included in the prior-year period results, net sales increased $111 million. The increase was primarily driven by increased shipments across most product lines and geographies as well as positive effects of foreign exchange rate changes.
Adjusted EBITDA for the six months ended June 30, 2026 increased $45 million when compared to the same period in 2025, primarily due to higher sales volume, favorable mix, price realization, and lower SG&A costs driven by the sale of the Company's tower and rough terrain cranes businesses, partially offset by inflationary pressures. The adjusted EBITDA impact from the Company's tower and rough terrain crane businesses, which were sold on October 31, 2025 and are included in the prior period results, was $3 million.
Specialty Vehicles
Six Months Ended June 30,
2026 2025
% of
Sales 		% of
Sales 		% Change In
Reported Amounts
($ amounts in millions)
Net sales $ 1,086 - $ - - *
Adjusted EBITDA $ 156 14.4 % $ - * *
* Not a meaningful percentage
Net sales and Adjusted EBITDA represent the results of operations of REV from the REV Transaction since February 2, 2026. See Note D - "Acquisitions" in our Condensed Consolidated Financial Statements for additional information regarding the REV Transaction.
Aerials
Six Months Ended June 30,
2026 2025
% of
Sales 		% of
Sales 		% Change In
Reported Amounts
($ amounts in millions)
Net sales $ 1,142 - $ 1,057 - 8.0 %
Adjusted EBITDA $ 39 3.4 % $ 75 7.1 % (48.0) %
Net sales for the six months ended June 30, 2026 increased $85 million when compared to the same period in 2025, primarily due to higher shipment volumes in North America and Western Europe across most product lines and positive effects of foreign exchange rate changes.
Adjusted EBITDA for the six months ended June 30, 2026 decreased $36 million when compared to the same period in 2025, primarily due to higher tariff costs, unfavorable mix, and inflationary pressures, partially offset by higher sales volume and cost actions.
Corporate and Other / Eliminations
Six Months Ended June 30,
2026 2025
% of
Sales 		% of
Sales 		% Change In
Reported Amounts
($ amounts in millions)
Net sales $ (6) - $ (6) - - %
Adjusted EBITDA (57) * $ (37) * (54.1) %
* Not a meaningful percentage
Adjusted EBITDA for the six months ended June 30, 2026 decreased $20 million when compared to the same period in 2025. The decrease is primarily due to additional costs driven by the REV Transaction which includes higher compensation costs and technology expenses.
Non-GAAP Measures
In this document, we refer to various GAAP (U.S. generally accepted accounting principles) and non-GAAP financial measures. These non-GAAP measures may not be comparable to similarly titled measures being disclosed by other companies. Management believes that presenting these non-GAAP financial measures provide investors with additional analytical tools which are useful in evaluating our operating results and the ongoing performance of our underlying businesses because they (i) provide meaningful supplemental information regarding financial performance by excluding the impact of one-time items and other items affecting comparability between periods, and non-cash items such as depreciation and amortization, (ii) permit investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate our core operating performance across periods, and (iii) otherwise provide supplemental information that may be useful to investors in evaluating our financial results. We do not, nor do we suggest that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
We discuss Adjusted operating profit, which is defined as Operating profit or loss as adjusted for acquisition or divestiture related items, restructuring, purchase price accounting, and other items that we believe are not indicative of our ongoing operating performance.
We also discuss Adjusted EBITDA. To determine Adjusted EBITDA, we adjust net income or net loss for the following items: non-cash depreciation and amortization, interest expense, income taxes, acquisition or divestiture related items, restructuring, purchase price accounting, and other items that we believe are not indicative of our ongoing operating performance.
We calculate a non-GAAP measure of free cash flow. We define free cash flow as Net cash provided by operating activities less Capital expenditures, net of proceeds from sale of capital assets. We believe this measure of free cash flow provides management and investors further useful information on cash generation in our primary operations.
Working capital is calculated using the Condensed Consolidated Balance Sheet amounts for Receivables (net of allowance) plus Inventories, less Trade accounts payable, and short and long-term Customer advances. We view excessive working capital as an inefficient use of resources, and seek to minimize the level of investment without adversely impacting ongoing operations of the business. Trailing three months annualized net sales is calculated using net sales for the most recent quarter end multiplied by four. The ratio calculated by dividing working capital by trailing three months annualized net sales is a non-GAAP measure we believe measures our resource use efficiency.
Non-GAAP measures also include translation effect of foreign currency exchange rate changes on net sales, gross profit, selling, general & administrative expenses and operating profit, as well as net sales, gross profit, and SG&A costs and operating profit excluding the impact of acquisitions and divestitures.
The following table reconciles Net income to Adjusted operating profit for the periods presented:
Three Months Ended June 30,
2026 2025
Net income $ 110 $ 72
Income taxes (29) (17)
Interest income 5 2
Interest expense (50) (44)
Other expense - net (3) 2
Operating profit 187 129
Restructuring and other (a)
7 12
Deal related (b)
12 3
Purchase price accounting (c)
39 20
Adjusted operating profit
$ 245 $ 164
Six Months Ended June 30,
2026 2025
Net income $ 21 $ 93
Income from discontinued operations - net of tax 4 -
Benefit from (provision for) income taxes 4 (22)
Interest income 9 4
Interest expense (97) (87)
Other expense - net (4) -
Operating profit 105 198
Restructuring and other (a)
8 18
Deal related (b)
80 8
Purchase price accounting (c)
205 42
Divestitures (d)
(3) -
Litigation related (e)
- 10
Adjusted operating profit
$ 395 $ 276
The following table reconciles Net income (loss) to Adjusted EBITDA for the periods presented:
Three Months Ended June 30, 2026
ES
MP
SV
Aerials
Corporate and Other / Elims
Total
Net income (loss)(1)
$ 55 $ 79 $ 69 $ 25 $ (118) $ 110
Provision for income taxes - - - - 29 29
Interest income - - - - (5) (5)
Interest expense - 3 4 - 43 50
Other expense
- - - - 3 3
Operating profit (loss)
55 82 73 25 (48) 187
Depreciation(2)
5 4 7 6 4 26
Amortization(2)
20 1 35 - 3 59
Non-cash interest costs
- - - - (2) (2)
EBITDA
80 87 115 31 (43) 270
Restructuring and other (a)
- - - 7 - 7
Deal related (b)
- - - - 12 12
Purchase price accounting (c) - - (21) - 1 (20)
Adjusted EBITDA
$ 80 $ 87 $ 94 $ 38 $ (30) $ 269
(1) Management does not allocate income taxes, interest costs incurred at the Corporate level, and certain other Corporate items to the segments.
(2) These line items include $1 million of depreciation and $55 million of amortization within the ES and SV segments related to purchase price accounting.
Three Months Ended June 30, 2025
ES MP Aerials Corporate and Other / Elims Total
Net income (loss)(1)
$ 61 $ 46 $ 45 $ (80) $ 72
Provision for income taxes - - - 17 17
Interest income - - - (2) (2)
Interest expense - 3 - 41 44
Other expense - - 1 (3) (2)
Operating profit (loss) 61 49 46 (27) 129
Depreciation 4 4 6 3 17
Amortization(2)
20 - - 2 22
Non-cash interest costs - - - (2) (2)
EBITDA 85 53 52 (24) 166
Restructuring and other (a) - 9 3 - 12
Deal related (b) - - - - 3 3
Purchase price accounting (c) 1 - - - 1
Adjusted EBITDA $ 86 $ 62 $ 55 $ (21) $ 182
(1) Management does not allocate income taxes, interest costs incurred at the Corporate level, and certain other Corporate items to the segments.
(2) This line item includes $20 million of amortization within the ES segment related to purchase price accounting.
a.Costs for the three months ended June 30, 2026 are associated with reduction in force and a plant closure in the Aerials segment. Costs for the three months ended June 30, 2025 are associated with restructuring programs across the MP and Aerials segments.
b.Costs for the three months ended June 30, 2026 are primarily related to the REV Transaction, including acceleration of stock-based compensation awards, severance and retention costs, and transaction costs. Costs for the three months ended June 30, 2025 relate to costs incurred as part of the ESG integration.
c.Costs for the three months ended June 30, 2026 primarily relate to the REV Transaction, driven by the impact of adjusting inventory fair value step-ups in connection with purchase accounting related measurement period adjustments. Costs for the three months ended June 30, 2025 primarily relate to ESG, and primarily relate to the amortization of purchased intangibles. Amortization is not included within Purchase price accounting in the reconciliation of Net income (loss) to Adjusted EBITDA, as amortization is a separate line item within the reconciliation.
Six Months Ended June 30, 2026
ES
MP
SV
Aerials
Corporate and Other / Elims
Total
Net income (loss)(1)
$ 104 $ 138 $ (22) $ 17 $ (216) $ 21
Gain on disposition of discontinued operations - net of tax
- - - - (4) (4)
Benefit from income taxes
- - - - (4) (4)
Interest income - - - - (9) (9)
Interest expense - 7 7 - 83 97
Other expense
- - - 1 3 4
Operating profit (loss)
104 145 (15) 18 (147) 105
Depreciation(2)
9 9 11 14 6 49
Amortization(2)
40 1 67 - 5 113
Non-cash interest costs
- - - - (4) (4)
EBITDA
153 155 63 32 (140) 263
Restructuring and other (a)
1 - - 7 - 8
Deal related (b)
- - - - 80 80
Purchase price accounting (c) - - 91 - 3 94
Divestitures (d)
- (5) 2 - - (3)
Adjusted EBITDA
$ 154 $ 150 $ 156 $ 39 $ (57) $ 442
(1) Management does not allocate income taxes, interest costs incurred at the Corporate level, and certain other Corporate items to the segments.
(2) These line items include $1 million of depreciation and $107 million of amortization within the ES and SV segments related to purchase price accounting.
Six Months Ended June 30, 2025
ES MP Aerials
Corporate and Other / Elims
Total
Net income (loss)(1)
$ 117 $ 78 $ 48 $ (150) $ 93
Provision for income taxes
- - - 22 22
Interest income - - - (4) (4)
Interest expense - 7 - 80 87
Other expense
- - 1 (1) -
Operating profit (loss)
117 85 49 (53) 198
Depreciation
8 8 13 4 33
Amortization(2)
40 1 - 4 45
Non-cash interest costs
- - - (4) (4)
EBITDA
165 94 62 (49) 272
Restructuring and other (a)
- 11 3 4 18
Deal related (b)
- - - - 8 8
Purchase price accounting (c)
2 - - - 2
Litigation related (e)
- - 10 - 10
Adjusted EBITDA
$ 167 $ 105 $ 75 $ (37) $ 310
(1) Management does not allocate income taxes, interest costs incurred at the Corporate level, and certain other Corporate items to the segments.
(2) This line item includes $40 million of amortization within the ES segment related to purchase price accounting.
a.Costs for the six months ended June 30, 2026 are associated with reduction in force and a plant closure in the Aerials segment. Costs for the six months ended June 30, 2025 are associated with restructuring programs across MP, Aerials, and Corporate segments.
b.Costs for the six months ended June 30, 2026 are primarily related to the REV Transaction, including acceleration of stock-based compensation awards, severance and retention costs incurred, and transaction costs. Costs for the six months ended June 30, 2025 relate to costs incurred as part of the ESG integration.
c.Costs for the six months ended June 30, 2026 relate to the REV Transaction, and include amortization of the inventory step-up recognized in connection with the REV Transaction, and incremental stock based compensation cost for replacement stock awards. Costs for the six months ended June 30, 2025 primarily relate to ESG, and primarily relate to the amortization of purchased intangibles. Amortization is not included within Purchase price accounting in the reconciliation of Net income (loss) to Adjusted EBITDA, as amortization is a separate line item within the reconciliation.
d.Reflects a gain realized on the previously disposed of Cranes business, offset by the loss on sale of a business within the SV segment.
e.Reflects costs incurred to settle a claim which was outside the normal course of business.
LIQUIDITY AND CAPITAL RESOURCES
We are focused on generating cash and maintaining liquidity (cash and availability under our revolving line of credit) for the efficient operation of our business. At June 30, 2026, we had cash and cash equivalents of $407 million and undrawn availability under our revolving line of credit of $690 million, giving us total liquidity of approximately $1,097 million. During the six months ended June 30, 2026, our liquidity decreased by approximately $475 million from December 31, 2025 primarily due to cash used for the REV Transaction, capital expenditures, dividend payments, and taxes paid on shares withheld in connection with stock vestings, partially offset by cash provided by operating activities and proceeds from the sale of businesses.
Our main sources of funding are cash generated from operations, including cash generated from the sale of receivables, loans from our bank credit facilities and funds raised in capital markets. We have no significant debt maturities until 2029. Our actions to maintain liquidity include disciplined management of costs and working capital. We believe these measures will provide us with adequate liquidity to comply with our financial covenants under our bank credit facility, continue to support internal operating initiatives and meet our operating and debt service requirements for at least the next 12 months from the date of issuance of this quarterly report. See Part I, Item 1A. - "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2025 and Part II Item 1A - "Risk Factors" of this Quarterly Report for a detailed description of the risks resulting from our debt and our ability to generate sufficient cash flow to operate our business.
Our ability to generate cash from operations is subject to numerous factors, including the following:
•The duration and depth of the global economic volatility resulting from tariffs, trade war, geopolitical uncertainty, inflationary pressures, foreign exchange rate volatility and high interest rates.
•As our sales change, the amount of working capital needed to support our business may change.
•Many of our customers fund their purchases through third-party finance companies that extend credit based on the creditworthiness of customers and expected residual value of our equipment. Changes either in customers' credit profile or used equipment values may affect the ability of customers to purchase equipment. There can be no assurance that third-party finance companies will continue to extend credit to our customers as they have in the past.
•Our suppliers extend payment terms to us primarily based on our overall credit rating. Deterioration in our credit rating may influence suppliers' willingness to extend terms and in turn accelerate cash requirements of our business.
•Sales of our products are subject to general economic conditions, tariffs, weather, competition, translation effect of foreign currency exchange rate changes, and other factors that in many cases are outside our direct control. For example, during periods of economic uncertainty, our customers have delayed purchasing decisions, which in turn reduces cash generated from operations.
•Availability and utilization of other sources of liquidity such as trade account receivables sales programs.
Typically, we have invested our cash in a combination of highly rated, liquid money market funds and in short-term bank deposits with large, highly rated banks. Our investment objective is to preserve capital and liquidity while earning a market rate of interest.
We seek to use cash held by our foreign subsidiaries to support our operations and continued growth plans through the funding of capital expenditures, operating expenses or other similar cash needs of worldwide operations. Most of this cash could be used in the U.S., if necessary, without additional tax expense. Incremental cash repatriated to the U.S. would not be expected to result in material foreign income and withholding, U.S. federal or state income tax cost. We will continue to seek opportunities to tax-efficiently mobilize and redeploy funds.
We had free cash flow of $101 million and $44 million for the three and six months ended June 30, 2026, respectively. The following table reconciles net cash provided by operating activities to free cash flow (in millions):
Three Months Ended
6/30/2026
Six Months Ended
6/30/2026
Net cash provided by operating activities $ 128 $ 97
Capital expenditures, net of proceeds from sale of capital assets (27) (53)
Free cash flow $ 101 $ 44
Pursuant to terms of our trade accounts receivable factoring arrangements, during the six months ended June 30, 2026, we sold, without material recourse, approximately $348 million of trade accounts receivable to enhance liquidity.
Working capital as a percentage of trailing three month annualized net sales was 15.2% at June 30, 2026. The following tables show the calculation of our working capital and trailing three months annualized sales as of June 30, 2026 (in millions):
Three Months Ended
June 30, 2026
Net sales, as reported
$ 2,238
x 4
Trailing three month annualized net sales $ 8,952
As of
June 30, 2026
Inventories $ 1,656
Receivables 1,157
Trade accounts payable
(1,022)
Short and long-term customer advances (429)
Working capital
$ 1,362
During the six months ended June 30, 2026, there were no shares of common stock repurchased under our Board authorized share repurchase programs, leaving approximately $183 million available for repurchase under such programs. Our Board declared a dividend of $0.17 per share in the first and second quarters of 2026, which were paid to our stockholders during those periods. In July 2026, our Board declared a dividend of $0.17 per share, which will be paid on September 18, 2026 to our stockholders of record as of August 11, 2026.
Our ability to access capital markets to raise funds, through sale of equity or debt securities, is subject to various factors, some specific to us and others related to general economic and/or financial market conditions. These include results of operations, projected operating results for future periods and debt to equity leverage. Our ability to access capital markets is also subject to our timely filing of periodic reports with the Securities and Exchange Commission. In addition, terms of our bank credit facilities and senior notes contain restrictions on our ability to make further borrowings and to sell substantial portions of our assets.
Cash Flows
Cash provided by operations was $97 million and $81 million for the six months ended June 30, 2026 and 2025, respectively. The increase in cash provided by operations was primarily driven by higher profitability, partially offset by changes in working capital and payments of transaction costs and severance in connection with the REV Transaction.
Cash used in investing activities was $488 million and $38 million for the six months ended June 30, 2026 and 2025, respectively. The increase in cash used in investing activities relates primarily to cash consideration paid in connection with the REV Transaction, partially offset by proceeds from the sale of businesses.
Cash provided by financing activities was $30 million for the six months ended June 30, 2026, compared to cash used in financing activities of $84 million for the prior year period. The increase in cash provided by financing activities was primarily driven by higher net borrowings in the current year period and share repurchases in the prior-year period, partially offset by higher cash payments related to shares withheld for tax payment on Restricted Stock Awards and increased dividend payments.
OFF-BALANCE SHEET ARRANGEMENTS
Guarantees
See Note J - "Litigation and Contingencies" in the Notes to Condensed Consolidated Financial Statements for information regarding our guarantees.
CONTINGENCIES AND UNCERTAINTIES
Foreign Exchange and Interest Rate Risk
Our products are sold in over 100 countries around the world and, accordingly, our revenues are generated in foreign currencies, while costs associated with those revenues are only partly incurred in the same currencies. Primary currencies to which we are exposed are the Euro, British Pound, Chinese Yuan, Australian Dollar, Indian Rupee and Mexican Peso. We purchase hedging instruments to manage variability of future cash flows associated with recognized assets or liabilities due to changing currency exchange rates.
We manage our exposure to interest rate risk by establishing a mix of indebtedness bearing interest at both floating and fixed rates at inception and maintain a ratio of floating and fixed rates on this mix of indebtedness using interest rate derivatives when necessary.
See Item 3 "Quantitative and Qualitative Disclosures About Market Risk" for a discussion of the impact changes in foreign currency exchange rates and interest rates may have on our financial performance.
Other
We are subject to a number of contingencies and uncertainties including, without limitation, product liability claims, workers' compensation liability, intellectual property litigation, self-insurance obligations, tax examinations, guarantees, class action lawsuits and other matters. See Note J - "Litigation and Contingencies" in the Notes to Condensed Consolidated Financial Statements for more information regarding contingencies and uncertainties. We are insured for product liability, general liability, workers' compensation, employer's liability, property damage, intellectual property and other insurable risks required by law or contract with retained liability to us or deductibles. Many of the exposures are unasserted or proceedings are at a preliminary stage, and it is not presently possible to estimate the amount or timing of any liability. However, we do not believe these contingencies and uncertainties will, individually or in aggregate, have a material adverse effect on our operations. For contingencies and uncertainties other than income taxes, when it is probable a loss will be incurred and possible to make reasonable estimates of our liability with respect to such matters, a provision is recorded for the amount of such estimate or for the minimum amount of a range of estimates when it is not possible to estimate the amount within the range that is most likely to occur.
We generate hazardous and non-hazardous wastes in the normal course of our manufacturing operations. As a result, we are subject to a wide range of environmental laws and regulations. All of our employees are required to obey all applicable health, safety and environmental laws and regulations and must observe the proper safety rules and environmental practices in work situations. These laws and regulations govern actions that may have adverse environmental effects, such as discharges to air and water, and require compliance with certain practices when handling and disposing of hazardous and non-hazardous wastes. These laws and regulations would also impose liability for the costs of, and damages resulting from, cleaning up sites, past spills, disposals and other releases of hazardous substances, should any such events occur. We are committed to complying with these standards and monitoring our workplaces to determine if equipment, machinery and facilities meet specified safety standards. Each of our manufacturing facilities is subject to an environmental audit at least once every five years to monitor compliance. Also, no incidents have occurred which required us to pay material amounts to comply with such laws and regulations. We are dedicated to ensuring that safety and health hazards are adequately addressed through appropriate work practices, training and procedures. We are committed to reducing injuries and working towards a world-class level of safety practices in our industry.
RECENT ACCOUNTING STANDARDS
Please refer to Note A - "Basis of Presentation" in the accompanying Condensed Consolidated Financial Statements for a summary of recently issued accounting standards.
Terex Corporation published this content on July 30, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on July 30, 2026 at 17:34 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]